OFFICE OF THE SECRETARY

FOR IMMEDIATE RELEASE Stephanie Hanna (O) 202/208-6416

March 29, 1995 (H) 703/751-8671

SECRETARY BABBITT AGAIN FORCED TO CONVEY MILLIONS OF DOLLARS OF PUBLIC RESOURCES DUE TO HISTORICAL MINING LAW

Secretary of the Interior Bruce Babbitt today signed patents conveying minerals with an estimated recoverable value of more than $266 million dollars. In return, taxpayers will receive less than two thousand dollars.

"The law which forces my hand in signing these patents is a relic from the days of the stove-pipe hat and the quill pen," Secretary Babbitt said. "It is an insult to American taxpayers that they are being asked to subsidize the profits of major mining companies with public resources of this value. Corporate welfare like this is particularly offensive in an atmosphere when Congress is considering cutting back on school lunches for poor kids. Congress must act to end these corporate giveaways under the mining law."

Under the 1872 Mining Law, signed by President Ulysses S. Grant, patent applications for hardrock minerals on public lands convey title to the land for a value assessed on the surface acreage at a cost of $2.50 or $5 per acre.

"This law was already outdated twenty years after it was passed, and that is now more than a century ago," Babbitt said. "Unfortunately, I have no choice but to carry out actions dictated by this historical relic until Congress steps forward to enact meaningful mining reform."

Santa Fe Pacific Gold Company, one of the largest holders of public land mining claims in the United States, will receive title to 21 lode claims on 344 acres of public domain at the Mesquite Mine in Imperial County, California. The land is estimated to contain a gold deposit with a recoverable value of $266 million dollars. Santa Fe Pacific Gold will pay taxpayers about $1,725 dollars and will pay no royalties to the public on the gold produced.

Other resources extracted on public lands, such as natural gas, oil and surface-mined coal, require a 12.5% royalty based upon production. Coal mined underground pays an 8% royalty. Hardrock mining for minerals such as gold, silver and copper is exempted by the 1872 Mining Law, so taxpayers both lose title to the lands and receive no royalty income from valuable minerals extracted.

Both the House and Senate passed mining reform legislation in the last Congress, but conferees failed to reach a final compromise that would have allowed comprehensive mining reform to be signed into law.

"I am committed to securing genuine reform, reform that will bring this 1872 law into line with present-day fiscal, environmental and technological realities," Babbitt said. "I call on Congress to work with me to accomplish these goals. I will not support proposals that only superficially change the mining law, or represent a weakening of current law. Cosmetics sold to the American people as mining reform will not prevent the kind of taxpayer rip-off I am forced into today. Frankly, that approach is worse than no reform at all."