WASHINGTON, D.C. – Wyoming U.S. Sen. John Barrasso invited president and CEO of Wyo-Ben, Inc., David Brown, to testify to the Senate Committee on Energy and Natural Resources last week to examine and consider updates to the Mining Law of 1872.
The Mining Law of 1872 regulated mining of certain mineral resources on federal public domain lands. Specifically, it permits individuals and corporations to prospect on public domain lands and to stake claims on mineral discoveries they make. This law has applied since before Wyoming became a state and many believe it is outdated when compared to the massive commercial drilling done in modern society. Environmentalists, fiscal hawks and some in Congress have often sought to add a royalty rate for miners of hard-rock minerals on federal lands, which the original law neglected to implement.
In Brown’s written testimony, he highlighted the exceptional quality of Wyoming’s sodium bentonite.
“It’s important for me to note that around 90 percent of the bentonite we use for our products is obtained from mining claims on federal lands administered by the Bureau of Land Management,” Brown said. “As a small company that operates in an industry segment with inherently low profit margins, and that relies heavily on mineral resources from federal lands, our ability to compete in the domestic and international marketplace is dependent on our ability to access and economically mine these resources.”
The Congressional Budget Office estimated last year that it loses up to $7 billion every year in royalties, most from gold, by companies not being subjected to paying. Sen. Joe Manchin, chair of the Senate Energy and Natural Resources Committee, said he wanted to avoid “undue burdens” on the industry but often argued it unfair for hard-rock mining companies to avoid paying royalties while coal mining companies do.
Brown said the mining law is complex and requires thoughtful discussion. He testified that a “one size fits all” approach to mining reform would perhaps threaten viability of his company to operate and offer good-paying employment.
“Further, the negative impact of the proposed mining law changes on the nation’s supply chain as well as on our local communities would be severe,” Brown wrote. “For all these reasons, I respectfully request the committee to recommend to the full Senate that the Hardock Mining Section be removed from the final Reconciliation Bill before it is sent to the president. I appreciate this committee taking the first step toward considering Mining Law reforms through regular order with this hearing and look forward to continuing to engage with you on this important issue.”
Brown’s company, Wyo-Ben, has produced Wyoming bentonite clay products since 1951. It harvests bentonite from reserves in the Big Horn Basin. Its name derives from Wyoming bentonite – although it is headquartered in Billings, Montana.
Wyoming largely depends on federal lands for its mining operations. Brown said about 90 percent of the bentonite his company uses comes from mine claims on federal lands.
The House Natural Resources Committee added a provision in the Reconciliation Bill that would impose an 8-percent royalty rate on new mines and a 4-percent rate on existing operations. The provision would also create a 7-cents-per-ton fee on material displaced during mining operations. Barrasso, as well as Senate Republicans, saw that as a “dirt tax.”
Barrasso eventually called for an overhaul of the permit system for hard-rock mining after royalty rates split a number of Congressmen. He said he was open to supporting adding federal royalties as long as it was accompanied by permitting reforms outside of the reconciliation process.