Taxpayer Ripoffs

Two Kinds of Taxpayer Ripoffs

1. Giveaways: The 1872 Mining Law encouraged the development and settlement of the western United States by bribing people with essentially free public lands and minerals. 
2. Private profits, public environmental liabilities: Because the Mining Law is substantially unchanged, it contains no environmental provisions.  Mining is a messy business.  Now taxpayers are on the hook for cleaning up much of that mess.

Giveaway #1: Minerals for Free -- the lack of a royalty
Unlike all other extractive industries, the hardrock/metal mining industry pays no royalty for minerals taken from public lands under the Mining Law.  Taxpayers lose approximately $100 million per year as a result.

Read more about the 1872 Mining Law's lack of royalty.

Giveaway #2:  Land for the Price of a Hamburger -- patenting
In addition to effectively free minerals, the Mining Law also requires the federal government to sell mineral-bearing public land for no more than $5 per acre  should someone want to buy it.  

Privatizing public land through this process is called patenting.  Under the 1872 Mining Law, mining interests have patented an area roughly equivalent in size to the state of Connecticut containing mineral values exceeding $245 billion.

Fortunately, every year since 1994 Congress has passed a moratorium on new mineral patents.  But that is only a temporary solution -- and vulnerable to political shifts on Capitol Hill.

Taxpayer Liability #1: Abandoned mines
Because the 1872 Mining Law contains no environmental provisions, and left the mining industry largely unregulated until 1980, nothing forced mine operators to clean up their mines after the mine played out.

The result is approximately 500,000 abandoned mines across the country that will cost taxpayers $32 - 72 billion to clean up.

Taxpayer Liability #2: Cleanup of Operating Mines
The Interior Department now requires mining companies post bonds to cover the cost of mine clean ups should the mine operator go bankrupt.  However, these bonding requirements were relatively recently enacted, and they don't clearly define what "clean up" is. 

The result, chronic underbonding that leaves taxpayer potentially liable for $12 billion in mine clean up costs.

For More Information

Learn more about royalties (and the lack of them).

Read about the 1872 Mining Law's abandoned mine legacy.

Read Putting a Price on Pollution, and learn more about the metal mine cleanup shortfall.