On September 12, 2023, the U.S. Department of the Interior (DOI) led Interagency Working Group on Mining Laws, Regulations, and Permitting (IWG) released its Final Report on “Recommendations to Improve Mining on Public Lands.” The Final Report was issued in response to the increasing demand for domestically-sourced strategic, industrial and critical minerals, and under the direction of President Biden’s E.O. 14017, on securing American’s supply chains, and the Bipartisan Infrastructure Law (Public Law 117-58) (BIL). The BIL required DOI to submit a report identifying legislative and regulatory recommendations to increase the timeliness of permitting activities for exploration and development of domestic critical minerals. Few of the recommendations in the Final Report, however, address this objective and, in fact, most will further complicate the permitting process and make domestic mining more expensive.

The IWG started from the assumption that “efforts to address mineral supply chain challenges are complicated by the General Mining Law of 1872.” The General Mining Law of 1872 (the Mining Law) has historically allowed entrepreneurial Americans to explore and develop mining projects on federal public lands through the location of mining claims. The Final Report, if fulfilled by Congress, would upend the Mining Law by converting the claim system to a leasing system, much like that currently used for other (albeit different) mineral types (i.e., oil and gas). The IWG notes that any transition to a leasing system must be “thoughtfully managed” and include a “fair process … for the conversion of claims to leases.”

The IWG additionally believes that the Mining Law “fails to provide the American taxpayer with any direct financial compensation for the value of hardrock minerals extracted.” Presently, claimants are required to pay annual claim maintenance fees to hold their claims. However, the Final Report recommends a “menu” of revenue-raising mechanisms. Chiefly, the Final Report recommends imposing a four to eight percent royalty on the net proceeds of minerals from mining operations on federal public lands, because “no U.S. state or major mineral producing nation grants free access to minerals located on public lands.” Royalty rates would be tailored to specific commodities and fund permitting programs, the Abandoned Hardrock Mine Reclamation Program established in the BIL and “community impact” funds for the communities most impacted by mining. The Final Report also recommends other “administratively simple” alternatives to the proposed royalty, like increasing maintenance fees or assessing a reclamation fee on displaced material on a per ton basis.

Other recommendations are markedly skewed toward enhancing environmental and Tribal interests.

While the Final Report acknowledges that modern mining is regulated by a comprehensive overlay of environmental laws and regulations, it seeks to steer exploration and mining away from “sensitive” resources by enlarging agency authority to issue conditional permits. The Final Report likewise encourages agencies and operators to give Tribal interests a consent veto to project authorizations.

Significant recommendations include legislative (L), regulatory (R) and policy (P) changes:

(1)   Replacing the current mining claim location system with a leasing system (L)

(2)   Implementing a leasing system by classifying lands across the 11 contiguous Western states and Alaska in a programmatic EIS as either presumptively appropriate for hardrock mining or presumptively inappropriate because of the presence of significant environmental or cultural features (L)

(3)   Protecting “sensitive lands” from mining by empowering federal land managers to administratively withdraw those lands from mineral development unless applicants commit to specified measures to avoid, minimize and mitigate adverse impacts (L)

(4)   Enacting new legislation to require meaningful, robust and early consultation with Tribes and to incentivize operators to obtain Tribal consent and to protect sacred sites before undertaking mining activities (L, R)

(5)   Expanding agency enforcement authority for non-compliance with existing environmental standards (L)

(6)   Requiring adherence to the Global Industry Standard on Tailings Management (GISTM) (R)

(7)   Fast-tracking approvals for projects that maximize “best environmental and social practices,” such as compliance with voluntary frameworks created by NGOs (L, R, P)

(8)   Improving the mineral exploration and development permitting process by adopting the model currently used by the Nevada State Office of the Bureau of Land Management (BLM) nationwide (P)

(9)   Standardizing what information what must be included in exploration plans, mine plans and related permit applications across federal agencies (R, P)

(10) Strengthening the capacity of agencies to process applications and conduct environmental reviews (L)

(11) Reforming bankruptcy laws to prevent creditors from receiving reclamation assurances during bankruptcy proceedings (L)

(12) Expanding notice level review time and notification requirements from 15 to 30 days (R, P)

(13) Banning mine operations that would require perpetual water treatment during reclamation (L)

(14) Enacting a federal “Good Samaritan” law to encourage cleanup of legacy mining sites (L)

The IWG notably declined to recommend specific legislative or regulatory changes regarding ancillary uses or mill sites and defers to Congress “to resolve the longstanding controversies on these issues.” The Final Report also repeats several of the proposed revisions to the Council on Environmental Quality’s (CEQ) NEPA implementing regulations.

The IWG’s recommendations would mark a dramatic shift in the way mining is conducted on federal public lands in the United States, much like legislation introduced by Rep. Grijalva and Sen. Heinrich. Yet, no legislative changes can be made unless Congress acts. This Report is yet another milestone in the long debate over the future of the American mining industry. Mine operators, suppliers and mining dependent communities should continue to closely monitor legislative and regulatory developments.

Jake Ward-Herzik is a member of the firm’s Environmental, Energy & Natural Resources team. His practice focuses on a range of complex issues and serves mining, industrial and renewable energy clients. To contact Jake, call 775.323.1601 or send an email to jward-herzik@parsonsbehle.com.