Kerry’s Proposed Increase in Mining Fees Alienates Nevadans

Published October 1, 2004

Mining is the second largest industry in Nevada, and voters there are carefully studying the mining policies and proposals of presidential candidates George W. Bush (R) and John Kerry (D). In the week of August 9, both candidates focused on their mining positions in attempts to win undecided voters in this swing state.

Kerry Proposes Higher Mining Fees

On August 9, Kerry championed revisions to the federal 1872 Mining Law that would increase the fees paid by mining companies. He also proposed that mining companies pay a new 8 percent royalty on precious metals recovered from federal lands.

According to the August 10 Greenwire, Kerry justified the changes in the law and the imposition of new fees as a means to raise more money for federal spending, including national park funding. According to Greenwire, Kerry predicted his proposal would raise an additional $120 million per year for the next five years.

In a state Bush narrowly carried in the 2000 presidential election, Kerry appears to be fighting an uphill battle on mining fees. His first obstacle will be finding common ground with one of his strongest allies in the state, Nevada Sen. Harry Reid (D), who criticized the Bush administration’s recently proposed, less costly, mining fees as too expensive.

Reid Criticized Smaller Fee Hike

“I’m sure you will agree that Sen. Kerry’s proposal could have severe negative impacts on mining jobs and production in Nevada and throughout the West,” wrote Interior Department Assistant Secretary Rebecca Watson in a letter to Reid. According to the August 12 Las Vegas Review-Journal, Watson then asked Reid why he would oppose the Bush administration’s program as being too costly, yet support the more expensive and far-reaching Kerry plan.

Interior Secretary Gale Norton noted on August 10 that the Bush mining fees are “modest” in comparison to the Kerry proposal.

As reported by the Review-Journal, Norton said, “Senator Reid has expressed this [the Bush plan] would cause a loss of jobs in the industry, but our proposal would be about $2.3 million a year compared to Senator Kerry’s $600 million [per year].”

On August 10, Reid had said he supported the Kerry fees over the Bush fees because, as the August 12 Review-Journal article stated, “they would be part of a comprehensive mining reform plan that would contain benefits for mining companies.”

The Review-Journal attempted to reach Reid on August 11 to allow the senator to specify what the alleged mining company benefits would be and to explain the apparent contradictions in his criticism of the relatively inexpensive Bush plan while supporting the far more expensive Kerry plan. The Review-Journal reported Reid could not be reached for comment but had issued the following statement: “President Bush has already advocated raising mining fees by millions of dollars annually, and I’m working to avoid the harm it could cause Nevada’s mining industry.”

Higher Fees Would Jeopardize Jobs

The National Mining Association (NMA), which has opposed the more moderate Bush mining fees, predictably expressed strong displeasure with the Kerry plan. Jack Gerard, president of the National Mining Association, said the Kerry plan would cost between 18,000 and 44,000 jobs “and result in a net loss to the federal treasury of $400 million to $500 million based on an independent analysis,” the Las Vegas Sun reported on August 12.

“Sen. Kerry obviously has not done his math,” the Sun article quoted Gerard as saying. “He would destroy the highest paying jobs in Nevada, Arizona, and New Mexico … to pay for entry-level service industry jobs[,] and [would] devastate mining communities throughout the West in the bargain,” Gerard added.

Reported the Sun, “John Kerry’s proposal to increase mineral royalties to raise money for national parks has drawn strong opposition from officials and mining interests in Nevada, which produces 81 percent of the nation’s gold.”

Need for New Funding Questioned

According to the August 10 Greenwire, Interior Secretary Norton reported the National Park Service under Bush “has more funds per employee, per acre, and per visitor than at any time in its history, and [all of this] is 20 percent higher than 2001.”

“John Kerry’s proposal to levy taxes and fees on our mining industries will turn thriving Nevada mining towns into ghost towns,” said Sen. John Ensign (R-Nevada) in a written statement, according to the Sun.

“John Kerry wants to pay for his many expensive proposals on the backs of our miners and rural residents, but he needs to reassess his promises if he thinks destroying Nevada jobs is the ticket to the White House,” Ensign said.

James M. Taylor ([email protected]) is managing editor of Environment & Climate News.