Note: When I opened my new Word app, it asked me to describe what I’d like to write. “Hardrock mines on federal lands should pay royalties”, I responded. In an instant, it produced a piece below which well reflected my views. An edited version follows:
Across the vast expanse of the American West, from the snow-capped Rockies to the arid Nevada deserts, hardrock mining has long been an economic driver, fueling everything from national defense to technological innovation. Yet beneath the production of copper, silver, gold and other valuable minerals, including rare earths and lithium lies a less-discussed reality: companies extracting these resources from federal public lands generally pay no royalty to the U.S. government. This is no trivial oversight; it is the result of the deeply outdated General Mining Law of 1872—a legal relic that maintains an imbalance between private profit and public good.
A Law Out of Time: The 1872 General Mining Law
The General Mining Law of 1872, signed by President Ulysses S. Grant, was conceived in an era defined by westward expansion. With prospectors clamoring for fortune and the federal government eager to encourage rapid economic development, the law granted individuals and companies the right to stake claims and extract hardrock minerals—such as gold, silver and copper—from federal lands. Unlike oil, gas, and coal industries, which operate under modern leasing systems and pay substantial royalties, hardrock miners still pay little more than modest fees to maintain their claims. There is no federal royalty; the minerals are essentially given away.
Why Royalties Matter
A royalty is more than a financial transaction; it is a payment made to the owner of a resource—here, the American public—for the right to extract and profit from that resource. Royalties ensure that those who benefit most directly from the exploitation of publicly owned minerals return a share of the value to the true owners: the citizens. This principle is not just about economic fairness, but also stewardship and sustainability.
The Economic and Environmental Imbalance
The hardrock mining industry has extracted over $300 billion in valuable minerals from federal lands in recent decades yet has paid virtually nothing for the privilege. In contrast, oil and gas companies pay royalties as high as 18.75%, and coal operators around 12.5%, which generate billions in revenue for taxpayers annually.
According to the Government Accountability Office, the cost of cleaning up abandoned mines in the West could reach tens of billions of dollars. Yet, not a dime from hardrock mining revenues is earmarked for this purpose. The environmental and social costs—contaminated water, toxic waste, disrupted ecosystems—are shouldered by local communities and future generations.
Global Comparisons: The U.S. as an Outlier
It is important to note that the United States is an exception among resource-rich nations. Countries such as Canada, Australia, and Chile all require mining companies to pay significant royalties for the extraction of public minerals. These royalties help fund public infrastructure, education, healthcare, and environmental restoration. The argument that royalties stifle investment is undermined by these countries’ thriving mining sectors, which remain globally competitive and innovative.
Addressing Arguments Against Royalties
Opponents of federal hardrock royalties contend that imposing new fees would deter investment, hurt jobs, or make American mines less competitive. However, evidence from both within and outside the U.S. suggests otherwise. States such as Nevada and Arizona have implemented their own royalties without significant negative impacts on employment or investment. A well-structured federal royalty can be set at a reasonable rate—such as 4% to 8%—that allows for continued profitability while ensuring fairness.
A Call for Reform
Requiring hardrock miners on federal lands to pay a fair royalty is not just common sense—it’s a matter of justice. Modernizing our mining laws would generate substantial public revenue and provide critical funding for environmental restoration. Most importantly, it would reaffirm the principle that America’s natural wealth on public lands should be managed for the benefit of present and future generations.
The choice is clear: we can continue giving away our hardrock mineral riches for free, or we can ensure that those who profit from public resources pay their fair share. The time for reform is long overdue.
