Foreigners Control Fifth of Mineral Wealth in American West, Study Shows

By FELICITY BARRINGER

Published: May 12, 2004

WASHINGTON, May 11 - About 20 percent of the mineral wealth of the American West is claimed by foreign companies, most of them Canadian, according to a new analysis and online database released Monday by an environmental organization.

The report, produced by the Environmental Working Group, also shows that of all the uses of federal lands, hard-rock mining returns the least to the federal Treasury: 2.3 percent of sales, compared with 13.2 percent for oil and gas development, 14 percent for grazing and 66 percent for timber sales. Advertisement

"For as little as $0.84 an acre, more than 28,000 companies and individuals have gained control of precious metals and minerals on 5.6 million acres of public land across 12 continental Western states," the report says. "Some of these companies are foreign-owned. None of them will pay anything to the federal government for the value of the minerals they extract from public property."

The report, which was produced at a cost of about $225,000, the group's president said, renews the debate over the 1872 Mining Act, which governs most mining operations on public lands. Rewriting that law has been a goal of both the mining industry and environmental groups, but their visions of what is required are diametrically opposed, and there has been legislative gridlock around the issue.

A proposal from Interior Secretary Gale A. Norton that calls for creating a system of payments based on production and giving states a greater role in regulating mines was denounced by environmental groups and has had no traction in Congress. The new report, based on a year's worth of research into tens of thousands of mining claims and patents loosely catalogued at the Bureau of Land Management, a division of the Interior Department, marshals a wide array of data on its Web site, www.ewg.org. Part neutral database and part polemic, the report renews the arguments for more stringent regulation of the industry and for requiring royalties from gold, silver and other hard-rock minerals.

Ken Cook, the president of the Environmental Working Group, said of the report: "I think it shows an American West that is grossly at odds with the romantic image. You have this image, and it's a valuable image for Western pride and social values, that the early settlers went out there and carved a living out of the landscape through mining, ranching, forestry. Now we have a different reality and the legacy that goes with, particularly the legacy of environmental problems and the boom-and-bust cycles."

Jim Hughes, deputy director of policy and programs at the Bureau of Land Management, said in a telephone interview on Monday that any mining claim or patent must be registered by a United States citizen or corporation; all the major foreign mining companies mentioned in the Environmental Working Group's report, like Rio Tinto, have American subsidiaries, like Borax and Kennecott.

"Our mining industry is on the downslide in this country and we are losing companies overseas for various reasons," Mr. Hughes said. "For numerous reasons they think they can't make money here, though they can make it overseas."

Carol Raulston, a spokeswoman for the National Mining Association, an industry lobbying group, said that no matter what their ownership, mining companies are "significant contributors to the economies where they are located." Ms. Raulston and Laura Skaer, a spokeswoman for the Northwest Mining Association, said that the foreign ownership of what the report estimates is 1.2 million acres of public land was a result of overallindustry consolidation.

In Nevada, a state with rich deposits of gold and silver, foreign companies like Placer Dome Inc. of Vancouver, Rio Tinto of Britain and Australia, and Barrick Gold Corporation of Toronto own the rights to the minerals under one of every three acres of public land.