General Kinnematics

Nevada Senator pushes mine royalties out of reconciliation bill

November 4, 2021

Nevada Sen. Catherine Cortez Masto (D) said the proposed royalty on hardrock mining will not be included in the massive climate and social spending package being considered by Congress.

Cortez Mastro, a first term senator told E&E News E&E News that she had spoken with Senate Democratic leaders, and Senate Energy and Natural Resources Chair Joe Manchin (D-W.Va.), that the language in the House’s draft reconciliation package imposing hardrock mining royalties needed to be taken out of reconciliation and put through “a separate process.” Manchin has also pledged to block the bill (ME, Oct 15).

Cortez Masto also said she’d received assurances from her party leadership that stripping this language was a done deal. And Rep. Susie Lee, a Nevada Democrat, confirmed to E&E News it was also her “understanding” the hardrock royalties were “going to be taken out.”

The elimination of all royalties is a step beyond even the compromise House Democrats proposed in their draft bill, which scaled back the imposed payments. The current House version would provide $997 million in cleanup money by applying a 4 percent gross royalty on new mines and a 2 percent royalty on existing mines.

With the climate portion of the reconciliation package still under negotiation, congressional and advocacy sources familiar with discussions expect Cortez Masto to get her way just as her likely Republican opponent, former Nevada Attorney General Adam Laxalt, has begun to attack her over the provision by calling it a “mining royalty tax.”

The bipartisan infrastructure deal also authorizes $3 billion for abandoned mine land cleanup, so some funding could get out the door even if the royalties are removed. But without the reconciliation language, taxpayers will be the only ones footing the bill to restore former mines under the program.

Sen. Martin Heinrich (D-N.M.), a leading advocate for overhauling the nation’s hardrock mining laws and regulations, is not giving up on getting the $1 billion and royalty payments into the reconciliation bill.

Unlike oil, gas and coal production, hardrock mines pay no royalties to the federal government for operating on public lands.

It’s been that way since 1872 when Congress authorized prospecting and mining on federal lands after the Gold Rush brought riches to Western states including Nevada. So embedded is mining in the culture of Nevada that state royalties on hardrock mines are in the state’s constitution.
Bidding to protect its status as a mining hub, the state’s Washington delegation has stood in the way of Congress setting hardrock royalties before.

Prior to the arrival of Cortez Masto to the debate, advocates for hardrock mining reform were blocked by former Democratic Majority Leader Harry Reid (D-Nev.), who boasted in 2009, “During my time in Congress, I have fought and defeated many ill-conceived reform efforts that would have hurt rural Nevada.”

So it was no surprise to miners in the state when Cortez Masto, first elected in 2016, staked her ground at a Senate hearing last month and declared she would oppose reconciliation language advancing in the House that would impose a gross royalty on hardrock mines.

To them, she was following in the mold of Reid. “She’s been a supporter of the industry,” Tyre Gray, president of the Nevada Mining Association, told E&E News. “I think she’s followed in Harry Reid’s footsteps in this quite well.”

 

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