Contact: Stephanie Hanna

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FOR IMMEDIATE RELEASE: September 6, 1995

Secretary Babbitt Forced To Sign Patent Conveying More Than One

The antiquated Mining Law of 1872 has again forced Secretary of the Interior Bruce Babbitt tosign away title to immensely valuable taxpayer-owned mineral deposits worth well over onebillion dollars for a token fee -- about $275.

In this case, public land in Idaho that contains high-quality travertine, used in paper production,will be conveyed to a foreign-owned company, Faxe Kalk, Inc. The company will also pay noroyalties to the taxpayers on production.

"I find this process, where my hands are tied by a law signed by Ulysses S. Grant, increasinglydistasteful," Babbitt said. "Many worthwhile programs and scientific research in my Departmentand government-wide are coming under the budget knife in the name of deficit reduction. Yet,recently the U.S. Senate voted, amazingly, to accelerate such giveaways." The FY 1996 InteriorAppropriations bill approved by the Senate in July would order the Secretary to speed-up patentprocessing while making only token changes in the Law.

Babbitt's action is taken while an industry-sponsored bill to "reform" the Mining Law is pendingbefore the Senate Energy Committee. "That bill's reforms are only cosmetic," Babbitt explained.Among other things, it would pave the way for patents to be issued on many thousands moremining claims without any royalty on the billions of dollars of minerals they contain. On claimsnot qualifying for a total royalty exemption, the bill would levy a very modest 2% royalty on netprofits, a rate far below that charged by private or state mineral owners.

The administration has strongly supported genuine reform of the Mining Law, and stronglyopposes this industry bill, as well as the provisions industry is attempting to attach to theAppropriations bill.

For example, in the Appropriations bill a tagged on so-called reform provision would requiremining companies to pay

fair market value" for the surface of the land to be patented; that is, value without regard to thepotential billions of dollars in mineral wealth it may contain. In this case, that might mean thatFaxe Kalk, Inc. would be required to pay in the neighborhood of $20,000, based on the averagesurface value of land in the vicinity, while the minerals are worth billions. Fair market valueindeed!

Meanwhile, the House Budget Committee's first plan to balance the budget by the year 2002assumed enactment of Mining Law reform that would generate over $100 million in annualrevenues to taxpayers. Although the Budget Committee Chairman promised that "nobody isgetting away" under his budget, the committee, under pressure from industry lobbyists,subsequently dropped the idea of reform. Nevertheless, the House did vote, by a wide margin, toextend the current partial moratorium on new patent issuance. The patent signed by the Secretarytoday had been exempted from that moratorium, which expires October 1, unless Congressextends it.

"Let's call this exactly what it is: corporate welfare," Babbitt continued. "It is an outrage toAmerican taxpayers that they are being asked to subsidize the profits of major mining companieswith public resources of this value. Congress could and should act quickly to end this travesty."

Under the 1872 Mining Law, signed by President Ulysses S. Grant, patents for hardrock mineralson 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.

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

Faxe Kalk, Inc. will receive title to the mineral resources contained on four claims coveringabout 110 acres of public land in Clark County, Idaho. These claims are estimated to contain 14million tons of high-quality travertine, with a gross value of well over one billion dollars. Theproduct is used to whiten paper. Faxe Kalk will pay approximately $275 to taxpayers for title tothe land

U.S. Department of the Interior