Tuesday, February 14, 2012

"Obama moots federal production tax on precious metals"

Over Harry Reid's dead body.
I've mentioned before that folks in southern Nevada have been calling the Senate Majority Leader "Dirty" Harry since his days on the Nevada Gaming Commission.

In the north, among the mining crowd he is known as Hardrock Harry.
He has done more than any living person to maintain the bizarre "no royalties" provisions of the 1872 mining law.

Here's the headline story from The Australian:
THE Obama administration is seeking royalties on the production of gold, silver and copper in the US, looking to overturn a 140-year-old law that currently exempts such companies from paying royalties to the federal government.

The royalty proposal, part of the administration's 2013 budget plan, is one of several measures that aims to raise money from the mining and energy industries. The budget plan also includes billions of dollars of new fees for oil and natural gas companies.

The plan calls on hardrock mining companies, such as those mining for gold and copper, to begin paying annual rents and a royalty payment of no less than 5 per cent of gross proceeds. The administration believes the changes will generate $80 million ($74.5 million) over 10 years.

Environmental watchdogs have long sought to change an 1872 law that allows hardrock mining companies to escape royalty payments. Oil and natural gas companies, by contrast, pay billions of dollars in royalty payments to the US government each year.

The mining industry says gold and copper mining operations in the US are already more expensive than foreign counterparts, in part because wages are higher and environmental rules are stricter, and a royalty payment would only put these companies at a bigger disadvantage....MORE

Here's Treehugger expressing some of the frustration of the eco crowd:
Dear Harry Reid, Please Stop Protecting a Destructive 130-Year-Old Mining Law
The mining Law issue comes up every couple years, here's the Las Vegas Review-Journal from 2007:
Proposed mining royalty criticized
And the New York Times from 2008. If I recall correctly, then-Senator Obama resisted these proposed changes:
The Case for Mining Law Reform
Grab some popcorn and settle back to watch as this one plays out.