Buried inside Democrats’ $3.5 trillion reconciliation spending package is legislation that could destroy the global competitiveness of the U.S. mining industry, increasing our alarming over-reliance on mineral imports, and hammering Colorado’s mining workforce and economy.
The partisan, punitive legislation in question, introduced by Natural Resources Committee Chairman Raul Grijalva of New Mexico, was aptly described by Ranking Member Bruce Westerman of Arkansas as “death by a thousand cuts” for the mining industry. He’s absolutely right.
The provisions outlined in Chairman Grijalva’s legislation would impose sweeping new burdens on an industry that already spends close to half of its operating costs in taxes and fees. These new excessive provisions include an eight percent gross royalty on new mining projects and a four percent gross royalty on existing mine operations on federal lands. It adds an arbitrary seven cents-per-ton tax for every ton of dirt moved during the production process. On top of those new royalties and taxes, substantial mineral withdrawals would further constrict new domestic production.
Colorado’s mining heritage dates back to the mid-1800’s. Today, through modern mining capabilities, the industry contributes over $6.77 billion to our state’s GDP and is supported by a workforce of nearly 42,700 direct and indirect good-paying jobs.
We have been blessed with a wealth of mineral resources that underpin many technologies, including clean energy generation and battery storage, and zero emission transportation.
Minerals and metals are also essential to making everyday life possible. For example, on average there is more than 430 pounds of copper in every single-family home. In short, we need more mining — especially mining in Colorado — not less. That’s just the opposite of what we will get with Chairman Grijalva’s proposal.
Removing federal land opportunities for responsible mining development, and imposing unjustified royalties and fees, will jeopardize the viability of the U.S. mining industry at a time when the metals and minerals we produce domestically are so critical to President Biden’s Made in America plan. With these new measures, the president’s emphasis on securing our domestic mineral supply chains for essential technologies will be unreachable.
This is especially true as we remain 100 percent reliant on imports for 17 key mineral resources and more than 50 percent reliant on imports for another 29 minerals that are essential to these important technologies.
By mandating these provisions through a hastily conceived and entirely partisan process, it eliminates any chance for thoughtful, bipartisan consideration and the opportunity for fair compromise that supports a strong and durable industry.
Colorado is leading the way forward on responsible metals and minerals production — helping produce the materials that are so critically important to our economy and our technology and clean energy goals.
Instead of a punitive, partisan proposal, Congress should work together to find a bipartisan solution, if we are to seize this once-in-a-generation opportunity to secure our mineral supply chains and build an industrial base that supports the jobs and economy of tomorrow.
Stan Dempsey, Jr. is president of the Colorado Mining Association.