Land Rights Network
American Land Rights Association
PO Box 400 – Battle Ground, WA 98604
Phone: 360-687-3087 – Fax: 360-687-2973
E-mail: [email protected]
Web Address: http://www.landrights.org
Legislative Office: 507 Seward Square SE – Washington, DC 20003
[email protected]

House Vote Shortly On Ghost Town Act of 2009 (HR 699)

"If it can't be grown, it has to be mined"

Media Release: (Op Ed)

Contact:  ALRA Mining Director: Don Fife (714) 356-7200
Fax (714) 356-7200 [email protected]

Gold Near $1,000 an ounce
Draconian Rahall Bill Coming To Vote In House

America's mom and pop small prospectors and miners:
"Don't steal our American Dream"

Battle Ground, WA. “A way of life for hundreds of thousands of citizens and a national asset for America would be destroyed by imprudent changes to the present location system under the existing General Mining Law," said Donald Fife, Chairman of the National Association of Mining Districts and Mining Director for the American Land Rights Association.

HR-699 is a bill designed by U. S. House of Representatives Natural Resource Committee Chairman Nick J. Rahall (D-WV) to gut the General Mining Law.

Enactment of Rahall's bill would cause the loss of hundreds of thousands of jobs and the destruction of the fragile economies of hundreds of communities in the Western States. "HR-699 should really be titled The Ghost Town Act of 2009" said Fife.

"What's missing from the public debate is any recognition of how dependent many American industries, especially high-technology industries, are on mining. The mining industry in turn depends on the exploration and development activities of many thousands of prospectors and small-scale miners.

This is "R and D" for future mineral supplies that must produce some 40,000 lbs. of minerals per capita per year to maintain our American standard of living. By destroying free enterprise and the entrepreneurial incentives contained in the General Mining Law, Rep. Rahall's bill strikes at the roots of America's economic well-being.

Radical opponents of the General Mining Law have bombarded Congress and the public with the most outrageous propaganda.

The biggest myth is the claim that real estate speculators are staking claims and then buying public land for $2.50 an acre, or the price of a hamburger at McDonald 's. Nothing could be further from the truth.

Thousands of mom and pop prospectors are looking for valuable hard rock mineral deposits. Only a very few ever find a deposit valuable enough to patent. A patent gives secure title that a small entrepreneur needs to collateralize (finance) his development to production.

Development of a claim and the Federal patenting process can take decades. The cost of obtaining a patent, according to U.S. Forest Service and Bureau of Land Management sources, can cost from several thousand to more than a hundred thousand dollars per acre. For example, when you add all the exploration costs, such as road building, drilling, sampling, testing, surveying, and lawyers fees the costs skyrocket.

Homestake Mining Company documents that during a 100-year period, only about one mining claim in 5,000 ever became a paying mine. For contrast the U.S. Geological Survey estimates that it takes about 100 petroleum exploration wells to find a new oil or gas discovery in North America

"It can take decades more plus additional huge investments to get all the permits for operation and environmental reclamation that are required before mining can begin. So, when the radical environmentalist claim that people are stealing public land for the price of a Big Mac, what they fail to mention is before you can buy your $2.50 hamburger, you first must pay for and build a McDonald’s franchise," said Fife.

"Recently, George and Ron Burton and their families of Big Bear Lake, California received a patent to their gold claims in the nearby Holcomb Valley Mining District 50 years after their father, Cecil Burton, filed a patent application. All too often, bureaucrats violate prospectors' and miners' civil rights by delaying action until after they have died," said Fife.

George and Ron's parents, who filed the original patent application, died decades ago never realizing the fruit of their American Dream.

Last fall the misinformed U.S. House of Representatives passed the draconian Rahall mining "reform" bill, "Hardrock Mining and Reclamation Act” which is the same as the current HR-699. This bill dictates 4% to 8% gross royalty on minerals produced from mining claims, and among other things, gives regulatory agencies the authority to reject proposed mines and to authorize citizen lawsuits.

If HR 699 passes, patenting a discovery is eliminated making it nearly
impossible for small miners to finance a small mining enterprise. It will
mean the end of mineral discovery in the West. Staking of mill sites are eliminated creating the probability that processing facilities will be built on top of ore reserves.

In the past, royalties on high-risk mineral exploration and mining proved to be a failure. From the early 1800's to the 1840's, the federal government had a 5% royalty on minerals on federal lands held in trust for the states. Favoritism and bureaucracy made it more expensive to collect the royalty than the government received.

Chairman Rahall was recently featured in an Associated Press story September 19, 2008. The title was, “Interior Chief Vows To Stop Ethics Storm.”

According to the AP wire story by Dina Cappiello, from 2002 to 2006 energy companies leasing oil and gas on Federal lands through the Department of Interior’s Denver Office, which “is responsible for marketing billions of dollars worth of oil and natural gas that energy companies barter to the government in lieu of cash royalty payments for drilling, nine of the government employees received thousands of dollars in gifts including meals, ski and golf trips and snow boarding lessons. Two workers accepted gifts on 135 occasions.”

After the Civil War, in 1866, a new placer mining law was proposed with a 5% royalty. It was found that royalties imposed on mines captured and leased by the Union Army during the Civil War were stripped of high-grade ore and abandoned before lower grade minerals could be extracted.

This is the same scenario Rahall's bill will create, leaving millions of tons of lower-grade minerals in the ground. Due to the poor track record of the previous royalty system, Congress passed the 1866 mining law without a royalty provision. The 1866 law was modified in 1870 and 1872 without the royalty provision, and has been modified more than 20 times since. Each of these modifications has been without a royalty provision.

Contrary to the belief of environmentalists and others, a mining claim is not a mine. It only gives citizens the right to look for an economic mineral discovery. Even just "looking" now requires “holding or rental fees,” extensive and expensive bonding and is subject to nearly endless environmental regulations.

Former Attorney General Janet Reno in an official AG Opinion to former Senator Bennett Johnson, then Chairman of the Senate Energy and Natural Resources Committee, declared the “rental or holding fee” illegal. The Supreme Court has ruled that a mining claim with a discovery is the same as private property with an unperfected title until the mineral patent is granted.

Once an economic mineral discovery meets the "prudent man rule" that is, a prudent citizen will expend his time, effort, and capital with the reasonable expectation of development of a valuable mine, only then does the citizen have “discovery” under the General Mining Law.

Most mom and pop prospectors can't qualify for a "bond," so they must come up with cash for a Certificate of Deposit as financial assurance for reclamation. That is a huge and often too large a hurdle for many mom and pop prospectors.

The National Association of Mining Districts represents mainly small "mom and pop" prospectors who still find most of the new discoveries despite all the new satellite and other technologies. “Most discoveries, around 90%, are still found by mom and pop miners,” said Fife.

The General Mining Law is part of the American Dream. During the California gold rush people saw in action the revolutionary idea that an individual could search for gold and with his own labor, discover a valuable mine and actually own it.

This was confirmation of America as land of the free. Before this new American free enterprise way, the King and/or the State owned the minerals. Individuals had to pay a "royalty" to government, if they were lucky enough to receive permission from the King to prospect.

“This may be the last of the truly free enterprise laws on the books,” said Fife.

Some proponents of Rahall’s “Ghost Town Act” claim that the land has been prospected for more than 150 years and everything has been found. This compares to the head of the US Patent Office in the 1890’s when he proposed closing the office, “because everything worthwhile had been invented.”

According to Vincent McKelvey, (Former Director of the US Geological Survey, 1976 to 1978): “Appraising mineral resources is an emerging science. A final once and for all inventory of any mineral resource is nonsense. Mineral reserves and resources are dynamic quantities and must constantly be appraised. As known deposits are exhausted, unknown deposits are discovered, new extractive technologies and new uses are developed and new geologic knowledge indicates new areas and new environments are favorable for mineral exploration.”

“As an example, the space age element Gallium, when combined with Arsenic, creates a Gallium-Arsenide solar cell that increases the production of electricity by 15% to 20% over Silicon solar cells. This new technology recently won the trans-Australian Solar Car Race for the Hughes Corporation,” said Fife.

“Gallium-Arsenide computer chips can reportedly replace silicon chips, by increasing the speed of computers theoretically by more than ten fold. This could make the difference between winning and losing thermo-nuclear war,” said Fife.

In the search for uranium in the 1950’s, it took thousands of mom and pop explorationists were urged to find these rare anomalies of nature that would supply the future demand for this and other strategic elements.

In the late 1940’s explorationists, looking for uranium on the California Nevada border in a place that had been mined for gold and silver numerous times over 200 years since the Spanish in the 1700’s, found Rare Earths.

This discovery led to color television, efficient lighting and a great saving of energy and jet fuel by reducing the weight of electric motors in half and providing many other benefits to society. The only other source of Rare Earths is in China. Rep. Rahall would have considered this area mined out and of no use to society. This ignores the constant upgrades in technology that make minerals really a renewable resource because it is possible to keep going back to mineral sites and finding economic discoveries.

The language of HR-699 is also being considered in the U.S. Senate Energy and Natural Resources Committee, chaired by Senator Jeff Bingaman (D-NM). Reportedly, Senator Harry Reid (D-NV), Senate Majority Leader, from the small mining town of Searchlight, Nevada, has serious reservations about the negative impact on jobs and the economy if HR-699 should become law.

The American Land Rights Association is a non-profit, public interest membership organization dedicated to protecting the rights of individual private property owners, including small Mom and Pop prospectors and miners possessing rights vested under the General Mining Law.

Chuck Cushman
Executive Director
(360)687-3087
[email protected]

Every Congressman may be called at (202) 225-3121. Every Senator may be
called at (202) 224-3121. Every citizen should contact their
Representatives and Senators regarding HR 699.

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