Changes to mine law may shake state

In the 1890s, when prospectors came from across the nation to Cripple Creek with gold nuggets in their eyes, the government sold them land for $5 an acre, and often less.

A century later, when a mining company wanted land in Crested Butte — a resort town where new homes go for $1 million — it got the same bargain.

That’s because the law governing mineral mining on federal land hasn’t changed significantly in 135 years.

The General Mining Law of 1872, meant to help settle the West, still says miners can stake claims and buy public land at a price capped at $5 an acre, with no royalties, little environmental regulation and few options for federal agencies to deny their applications.

This year, the Democrat-controlled Congress is taking aim at the law, an effort that has pitted lawmakers against the Bush administration and environmentalists against the mining industry.

The mining law played a major role in shaping Colorado.

With 20,300 active mineral claims on federal land here — not to mention 2,600 abandoned mines, many of them sources of pollution — and mining companies taking a new interest in Colorado’s uranium deposits, a rewrite of the law could have a wide-ranging im- pact here.

Bob Womack couldn’t have known what he was starting.

When the prospector struck gold in a ditch he called Poverty Gulch on the west side of Pikes Peak in 1890, it began the last great gold rush in Colorado, drawing tens of thousands of miners and prospectors.

The law was on their side.

For a small fee they could stake a claim on federal property without paying a royalty. The process was known as “patenting.”

According to a report by the Environmental Working Group, which analyzed Bureau of Land Management records, there were 118,690 acres in Teller County sold that way. That’s an area the size of Colorado Springs today. In Colorado, only Garfield County had more federal land patented.

Prospectors went after more land than they needed, and often in multiple plots, to encourage East Coast investors the venture was valid, said Ed Hunter, a Victor resident and local history expert.

“If you’re going to put $10,000 or whatever into some miserable mining claim out there in the West, you would want some sense of order,” Hunter said.

Womack died penniless, having sold his claims for $500 and a bottle of liquor. But to date, more gold has been pulled from Cripple Creek than any other location in the state.

Many of the miners who came to strike it rich wound up working for larger mines, and the claims and patented lands were consolidated over the years. Much of it is now owned by the Cripple Creek and Victor Gold Mining Company.

The mining industry, meanwhile, has consistently resisted efforts by environmental groups to change the law. According to the Environmental Working Group report, the industry acquired 1.2 million acres of land in Colorado through patenting, and there are still thousands of active claims to minerals on 123,000 acres of federal land in the state.

The only major mine still operating in the Pikes Peak region is the Cripple Creek and Victor Gold Mining Company. Changes to the law would have little impact on the 320-employee operation.

While the company owns six claims on Bureau of Land Management property in the area, they are small, unmined areas on the periphery of the active mines, said Pete O’Connor, spokesman for one of the mine’s parent companies. The claims total 35 acres — a fraction of the 5,857 acres the company mines on private land.

While the mining law encouraged the mining boom in Cripple Creek and continues to shape land ownership there today, some believe it would’ve happened even without the law.

“They would’ve found a way,” said Jan MacKell, director of the Cripple Creek District Museum. “When there’s gold in them there hills, they would’ve found a way.”

Congress has banned the patenting of federal land since 1994, but applications filed before then are grandfathered in.

The Bush administration has made it a priority to approve the 400 that were grandfathered in — including Mount Emmons near Crested Butte.

A 12,329-foot mountain outside the upscale ski resort town, it is rich in molybdenum, an alloy that strengthens and prevents corrosion of steel. Several companies have sought to mine the mountain for more than three decades.

Though the area has a rich mining history, most residents and local officials were aghast when, in 2004, the federal government sold 155 acres of U.S. Forest Service property on the mountain to a mining company for $875.

In Crested Butte, even small homes sell for $1 million.

“Crested Butte, and the Gunnison Valley, in the last 30 years, we’ve become more of a tourist area,” said Wendy Mc-Dermott, executive director of the High Country Citizens Alliance. “To have the threat of a pretty massive mine, with huge associated water quality issues, is pretty alarming to a lot of people.”

Opponents, though, have had to battle the rock-hard limitations of the mining law. They sued to block the sale, lost in lower courts, which ruled third parties can’t challenge patents, and earlier this year the U.S. Supreme Court declined to hear the case.

Said McDermott, “The citizens and local governments were not even given a chance to be heard in court, mainly because of the 1872 law.”

Canadian mining firm Kobex Resources Ltd., which has an agreement with U.S. Energy Corp. to operate the mine, has announced plans to begin mining in 2010, though McDermott said opponents will fight the plan it will submit to the Forest Service.

Mining law critics say the Mount Emmons sale is just one of many cases of mining companies profiting off cheap public land.

“Every other resource — coal, oil and gas — all have a royalty to return back to the taxpayers,” said Jeff Parsons, an attorney with the Western Mining Action Project in Lyons. “It’s about time, I think, the mining companies stop getting such special treatment.”

Rep. Nick Rahall, D-W.Va., who leads the House Natural Resources Committee, has introduced a bill to comprehensively rewrite the 1872 law and is holding hearings.

It would eliminate patents and impose an 8 percent royalty on hard-rock mines on federal land, impose environmental requirements covered in a hodgepodge of different laws, limit mining permits to 10 years, establish a reclamation fund, create a public participation process for new mines, and allow citizens to bring lawsuits.

The greatest impact in Colorado would be on the burgeoning uranium industry, said Stuart Sanderson, president of the Colorado Mining Association.

“There are potentially thousands of claims that are at risk here, probably in uranium claim activity,” Sanderson said.

According to the Colorado Division of Reclamation, Mining and Safety, there are 35 active uranium mining permits, though none are producing, and 28 more prospecting permits, including sites on the Front Range, the closest of them in Fremont County. Much of the uranium is located under federal land.

Too steep a royalty could stymie that exploration, Sanderson said.

“Mining companies, they invest literally thousands and millions of dollars in the development of a mining claim,” Sanderson said.

The National Mining Association supports revisions, though without patents, the industry wants more guarantees of long-term mining rights and a royalty payment proposal that includes new mining claims only.

Said Sanderson, “We have supported the prospect of a royalty in the past, and we have also supported fair market value for surface purchases.”

A rewrite of the law could bring a benefit to Colorado. Lawmakers want to use royalties for a fund to clean up abandoned mines.

Many of the ones on federal land in Colorado have dangerous openings and runoff that pollutes waterways.

CONTACT THE WRITER: 476-1605 or scott.rappold@gazette.com