This is the accessible text file for GAO report number GAO-08-849R
entitled 'Hardrock Mining: Information on State Royalties and Trends in
Mineral Imports and Exports' which was released on August 20, 2008.
This text file was formatted by the U.S. Government Accountability
Office (GAO) to be accessible to users with visual impairments, as part
of a longer term project to improve GAO products' accessibility. Every
attempt has been made to maintain the structural and data integrity of
the original printed product. Accessibility features, such as text
descriptions of tables, consecutively numbered footnotes placed at the
end of the file, and the text of agency comment letters, are provided
but may not exactly duplicate the presentation or format of the printed
version. The portable document format (PDF) file is an exact electronic
replica of the printed version. We welcome your feedback. Please E-mail
your comments regarding the contents or accessibility features of this
document to Webmaster@gao.gov.
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed
in its entirety without further permission from GAO. Because this work
may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this
material separately.
GAO-08-849R:
United States Government Accountability Office:
Washington, DC 20548:
July 21, 2008:
The Honorable Harry Reid:
Majority Leader:
United States Senate:
The Honorable Jeff Bingaman:
Chairman:
Committee on Energy and Natural Resources:
United States Senate:
The Honorable Nick J. Rahall II:
Chairman:
Committee on Natural Resources:
House of Representatives:
Subject: Hardrock Mining: Information on State Royalties and Trends in
Mineral Imports and Exports:
Since the passage of the General Mining Act of 1872, miners have
extracted billions of dollars worth of gold, silver, copper, and other
hardrock (locatable) minerals from federal lands without having to pay
a royalty.[Footnote 1] Congress is now considering amending the General
Mining Act to, among other things, assess a royalty to ensure that the
public is compensated for hardrock minerals extracted from federal
lands, as more recently enacted laws require for oil, gas, and other
minerals. The vast majority of the federal lands where hardrock mining
operations occur are in 12 western states, including Alaska (hereafter
referred to as the 12 western states).[Footnote 2],[Footnote 3]
These western states have statutes governing hardrock mining operations
on lands in their state. However, unlike the federal government, these
states charge royalties that allow them to share in the proceeds from
hardrock minerals extracted from state-owned lands. In addition, most
of these states charge taxes, such as severance taxes, mine license
taxes, or resource excise taxes, on hardrock mining operations that
occur on private, state, and federal lands.[Footnote 4] For the
purposes of this report, we use the term "functional royalty" to refer
to taxes that function like a royalty in that they permit the state to
share in the value of the mine's production. Although states may use
similar names for functional royalties they assess, there can be wide
variations in their forms and rates. To aid in the understanding of
royalties, including functional royalties, the royalties are grouped as
follows:
* Unit-based is typically assessed as a dollar rate per quantity or
weight of mineral produced or extracted, and does not allow for
deductions of mining costs.
* Gross revenue is typically assessed as a percentage of the value of
the mineral extracted and does not allow for deductions of mining
costs.
* Net smelter returns is assessed as a percentage of the value of the
mineral, but with deductions allowed for costs associated with
transporting and processing the mineral (typically referred to as mill,
smelter, or treatment costs); however, costs associated with extraction
of the mineral are not deductible.
* Net proceeds is assessed as a percentage of the net proceeds (or net
profit) of the sale of the mineral with deductions for a broad set of
mining costs. The particular deductions allowed vary widely from state
to state, but may include extraction costs, processing costs,
transportation costs, and administrative costs, such as for capital,
marketing, and insurance.
Hardrock minerals play an important role in the U.S. economy,
contributing to multiple industries, including transportation, defense,
aerospace, electronics, energy, agriculture, construction, and health
care. For example, copper is used extensively in building construction
(in products like electrical wire, water pipes, and plumbing fixtures)
and in consumer electronic products. The Department of the Interior's
(Interior) U.S. Geological Survey (USGS) annually calculates U.S. "net
import reliance as a percentage of U.S. apparent consumption"
(hereafter referred to as "net import reliance") for nonfuel minerals
using production data from annual USGS mineral industry surveys and
import and export data from other sources.[Footnote 5],[Footnote 6] A
net import reliance of 50 for a particular mineral would indicate that
50 percent of the domestic consumption of that mineral was supplied
through net imports. A net import reliance of less than zero indicates
that the United States was a net exporter of that particular mineral in
that year. According to USGS, in recent years the United States has
relied heavily on foreign sources for raw and processed minerals,
including many hardrock minerals.
In this context, you asked us to provide information on (1) which types
of royalties the 12 western states assess on hardrock mining operations
and (2) trends on imports and exports of hardrock minerals. In
addition, you asked us to provide data on hardrock mining operations on
federal lands that the federal government either does not routinely
collect or consistently maintain. This information is presented in
enclosure IV. In our March 2008 testimony before the Senate Committee
on Energy and Natural Resources, we provided information on federal
expenditures to clean up abandoned hardrock mines, the estimated number
of abandoned mine lands, and the value and coverage of financial
assurances operators use to guarantee reclamation costs on Bureau of
Land Management (BLM) land.[Footnote 7]
To identify the types of royalties, including functional royalties,
that the 12 western states assess on hardrock mining operations, we
reviewed state statutes and regulations pertaining to royalties on
hardrock mining operations. To aid in understanding general patterns in
state royalties, we consulted academic and industry sources and then we
categorized each royalty according to how it is assessed. To identify
import and export trends, we interviewed officials from BLM and the
U.S. Department of Agriculture's Forest Service to identify those
hardrock minerals commonly produced on federal land. We also reviewed
reports on hardrock mining from the Congressional Research Service
(CRS), GAO, and the National Academy of Sciences and identified
additional minerals that are frequently referred to as examples of
hardrock minerals. Through these efforts, we identified the following
15 hardrock minerals for our review: barite, copper, fluorspar, gold,
gypsum, lead, magnesium compounds, magnesium metal, nickel, palladium,
perlite, platinum, silver, tungsten, and zinc. To determine trends in
U.S. imports and exports of these 15 minerals, we analyzed USGS's net
import reliance data for 1975 through 2007. In addition, through
interviews with BLM and Forest Service and the review of relevant
agency documents and reports, we identified information on hardrock
mining operations on federal lands that is not collected or
consistently maintained by the federal government, including data on
the amount of hardrock minerals being produced on federal land and the
amount of hardrock minerals remaining and the total acreage of federal
lands withdrawn from hardrock mining operations.
We conducted this performance audit from November 2007 through July
2008, in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit
to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for
our findings and conclusions based on our audit objectives. Enclosure I
provides more detailed information on our scope and methodology.
In Summary:
The 12 western states assess multiple types of royalties, including
functional royalties, on mining operations, which often differ
depending on land ownership and the mineral being extracted; in
addition, each royalty can be governed by different sets of exclusions,
deductions, and limitations. For example, for private mining operations
conducted on federal, state, or private land, Arizona assesses a net
proceeds functional royalty of 1.25 percent on gold mining operations,
and an additional gross revenue royalty of at least 2 percent for gold
mining operations on state lands. In addition, 9 of the 12 states
assess different types of royalties for different types of minerals.
For example, Wyoming employs three different functional royalties for
all lands: (1) net smelter returns for uranium, (2) a different net
smelter returns for trona--a mineral used in the production of glass,
and (3) gross revenue for all other minerals. Finally, the royalties
the states assess often differ in the allowable exclusions, deductions,
and limitations. For example, in Colorado, a functional royalty on
metallic mining excludes gross incomes below $19 million, whereas in
Montana a functional royalty on metallic mining is applied on all
mining operations after the first $250,000 of revenue. The actual
amount assessed for a particular mine may depend not only on the type
of royalty, its rate, and exclusions, but also on such factors as the
mineral's processing requirements, mineral markets, mine efficiency,
and mine location relative to markets, among other factors. Enclosure
II provides information on royalties, including functional royalties,
that the 12 western states assess.
Based upon USGS data on 15 common hardrock minerals, over the past 32
years, the degree to which the United States has relied on imported
minerals to satisfy its domestic consumption has held relatively
constant for 4 of those minerals (fluorspar, gypsum, palladium, and
platinum); fluctuated for 5 (copper, lead, silver, tungsten, and zinc);
increased for 4 (barite, magnesium compounds, magnesium metal, and
perlite); and decreased for 2 (gold and nickel.) Moreover, in some
years, the United States was a net exporter of some hardrock minerals.
Over the period, for example, the United States has:
* consistently relied on imports to provide between 77 percent and 100
percent of its fluorspar needs--a key ingredient in the manufacture of
aluminum, gasoline, steel, and uranium fuel;
* fluctuated in its reliance on imports to meet its need for copper,
importing copper in most years and providing net exports in 1975 and
1991;
* decreased its reliance on imports of nickel from a high of 80 percent
in 1978 to a estimated low of 17 percent in 2007;
* consistently been a net exporter of gold between 1982 and 2003; and:
* been a net exporter of magnesium metal until 1997, when the United
States began to import magnesium metal.
Enclosure III provides information on trends in U.S. imports and
exports of 15 common hardrock minerals.
Agency Comments:
We provided a draft of this report to the Secretaries of Agriculture
and of the Interior for review and comment. The Department of
Agriculture told us in an e-mail that it had no comments on our report.
The Department of the Interior provided technical comments, which we
incorporated as appropriate.
As agreed with your offices, unless you publicly announce the contents
of this report earlier, we plan no further distribution for 30 days
from the report date. At that time, we will send copies of this report
to interested congressional committees and the Secretaries of
Agriculture and of the Interior, and other interested parties. We will
also make copies available to others upon request. In addition, the
report will be available at no charge on the GAO Web site at
[hyperlink, http://www.gao.gov].
If you or your staffs have any questions about this report, please
contact Robin M. Nazzaro at (202) 512-3841 or nazzaror@gao.gov. Contact
points for our Offices of Congressional Relations and Public Affairs
may be found on the last page of this report. GAO staff who made major
contributions to this report are included in enclosure V.
Signed by:
Robin M. Nazzaro:
Director, Natural Resources and the Environment:
[End of section]
Enclosure I: Objectives, Scope, and Methodology:
This enclosure details the scope of our review and the methods we used
to obtain information on (1) which types of royalties the 12 western
states assess on hardrock mining operations and (2) trends on imports
and exports of hardrock minerals. In addition, we identified data on
hardrock mining operations on federal lands that the federal government
either does not collect or consistently maintain.
To identify the royalties, including functional royalties (taxes that
function like a royalty), that 12 western states (Alaska, Arizona,
California, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, Utah,
Washington, and Wyoming) assess on hardrock mining operations,[Footnote
8] we reviewed state statutes and regulations authorizing royalties on
state, private, and federal lands. States charge royalties on the
hardrock mining operations on state lands and taxes that function like
a royalty, which we refer to as functional royalties, on the hardrock
mining operations on private, state, and federal lands. For each
royalty that we identified, we recorded the type of minerals assessed;
the land ownership on which the royalty applied; the current royalty
rate; the base on which the rate is applied; the deductions,
limitations, and exclusions allowed; and other determinants of how the
royalty is assessed. We contacted state officials responsible for
managing state lands in five states (Colorado, Idaho, Nevada, Utah, and
Washington) when we needed additional information or clarification. We
characterized the royalty rate as (1) uniform, if the rate was the same
for all mines of the same mineral type or size; (2) progressive, if the
rate increased as production or revenue increased; or (3) case by case,
if the rate was determined individually for each lease.
To aid in understanding the types of royalties, including functional
royalties, in western states, we reviewed reports by GAO, the
Congressional Research Service (CRS), the World Bank, and other
experts. Because there are no broadly accepted definitions for the
different types of royalties, we also interviewed private sector
experts knowledgeable about hardrock mining royalties in the western
United States and mineral-producing foreign countries. We then placed
each of these royalties according to how the royalty is assessed and
the allowable deductions, exclusions, and limitations in one of the
following four categories: (1) unit-based royalties are typically
assessed as a dollar rate per quantity or weight of mineral produced or
extracted and do not allow for deductions of mining costs; (2) gross
revenue royalties are typically assessed as a percentage of the value
of the mineral extracted and do not allow for deductions of mining
costs; (3) net smelter returns royalties are also assessed as a
percentage of the value of the mineral, but with deductions allowed for
costs associated with transporting and processing the mineral
(typically referred to as mill, smelter, or treatment costs); and (4)
net proceeds royalties are assessed as a percentage of the net proceeds
(or net profit) of the sale of the mineral with deductions for a broad
set of mining costs. In some cases, a royalty, including a functional
royalty, generally fits into one of these four categories, but with
some difference; we identified these royalties as modified. In
addition, for those royalties that are lease-specific, a state statute
typically delegates to a state board or agency the authority to
determine the royalty rate, the basis for assessing the royalty (base),
deductions, exclusions, and limitations.
To select minerals to identify import and export trends, we interviewed
officials from the Department of the Interior's (Interior) Bureau of
Land Management (BLM) and the U.S. Department of Agriculture's Forest
Service to identify those hardrock minerals commonly produced on
federal land. We also reviewed reports on hardrock mining from CRS,
GAO, and the National Academy of Sciences and identified additional
minerals that are frequently referred to as hardrock minerals. Through
this process, we identified the following 15 hardrock minerals for our
review: barite, copper, fluorspar, gold, gypsum, lead, magnesium
compounds, magnesium metal, nickel, palladium, perlite, platinum,
silver, tungsten, and zinc.
To determine trends in U.S. imports and exports of these 15 hardrock
minerals, we obtained data from U.S. Geological Survey (USGS) on net
import reliance for 1975 through 2007. USGS mineral commodity
specialists calculate net import reliance for a particular mineral as
imports minus exports, with adjustments made for changes in government
and industry stocks. Net import reliance is presented as a percentage
of U.S. apparent consumption--calculated by USGS as production plus
imports minus exports, with adjustments for changes in government and
industry stocks. A net import reliance figure of 50 for a particular
mineral would indicate that 50 percent of the domestic consumption of
that mineral was supplied through net imports. A net import reliance
figure of E represents a negative percentage, which indicates that the
United States was a net exporter of that particular mineral in that
year. We analyzed the USGS data to determine which hardrock minerals
had remained relatively constant, experienced a decrease or increase in
net import reliance, and had fluctuated over time.
In addition, we identified data on hardrock mining operations on
federal lands that is not routinely collected or consistently
maintained by the federal government through interviews with BLM and
Forest Service officials and the review of relevant agency documents
and reports. These data include the amount of hardrock minerals being
produced on federal land and the amount of hardrock minerals remaining
and the total acreage of federal lands withdrawn from hardrock mining
operations.
We conducted this performance audit from November 2007 through July
2008, in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit
to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for
our findings and conclusions based on our audit objectives.
[End of enclosure]
Enclosure II: Types of Royalties Assessed on Hardrock Mining
Operations:
States charge royalties on the hardrock mining operations on state
lands and taxes that function like a royalty, which we refer to as
functional royalties, on the hardrock mining operations on private,
state, and federal lands. Table 1 shows the types and definitions of
royalties, including functional royalties, assessed and table 2 shows
the types of functional royalties the western states assess on all
lands, including federal, state and private lands, as well as the
royalties assessed only on state lands.[Footnote 9] Tables 3 through 14
provide information on the royalties and functional royalties,
including rates, deductions, and limitations in Alaska, Arizona,
California, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, Utah,
Washington, and Wyoming.
Table 1: Types of Royalties, Including Functional Royalties Assessed,
Definition, and Formula Used:
Type of royalty: Unit-based;
Definition: These royalties are typically assessed as a dollar rate per
quantity or weight of mineral produced or extracted, and do not allow
for deductions of mining costs. While this type of royalty is often
applied to minerals used in construction, it is sometimes used for
hardrock minerals, such as those that are homogenous and typically sold
in bulk; certain types of limestone and potash are examples of
homogenous minerals;
Formula: Unit-based royalty payment = royalty rate x quantity or weight
of mineral extracted.
Type of royalty: Gross revenue[A];
Definition: This type of royalty is typically assessed as a percentage
of the value of the mineral extracted. To determine the value of the
mineral, states often use the actual sales price used in a sales
transaction. In other instances, however, a state may calculate the
value of the mineral on the basis of a reference price, such as the
price of the mineral traded in a commodities exchange like the New York
Mercantile Exchange (NYMEX). We refer to these royalties as "gross
revenue royalty with reference price." Generally, gross revenue
royalties do not allow producers to deduct mining costs, although in
some instances, some deductions are allowed for such costs as
transportation from the mine to the point of sale. When the gross
revenue is measured at the mine opening and the mineral must be
processed prior to sale, the gross revenue royalty is similar or
identical to a net smelter returns royalty;
Formula: Gross revenue royalty payment = royalty rate x production
volume x price; (price = sales price or reference price).
Type of royalty: Net smelter returns;
Definition: Like the gross revenue royalty, the net smelter returns
royalty is assessed as a percentage of the value of the mineral, but
with deductions allowed for costs associated with transporting and
processing the mineral (typically referred to as mill, smelter, or
treatment costs); however, costs associated with extraction of the
mineral are not deductible. A common variation of the net smelter
returns royalty provides a standard deduction rate (such as a
percentage of the value of the mineral) intended to represent the
processing costs;
Formula: Net smelter returns royalty payment = royalty rate x
production volume x price - deductible costs (limited to processing and
transportation costs); (price = sales price or reference price).
Type of royalty: Net proceeds;
Definition: Unlike the other royalty types, the net proceeds royalty is
assessed as a percentage of the net proceeds (or net profit) of the
sale of the mineral with deductions for a broad set of mining costs.
The particular deductions allowed vary widely from state to state but
may include extraction costs, processing costs, transportation costs,
and administrative costs, such as for capital, marketing, and
insurance. If a particular mining operation is not profitable (e.g., if
the operation was inefficient or the price of the mineral falls too
low, so that revenues do not cover the deductible costs), there will be
no royalty collected. A common variation of net proceeds royalty
provides a standard deduction rate (such as a percentage of the value
of the mineral) intended to represent the mining costs and any other
allowed deductible costs;
Formula: Net proceeds royalty payment = royalty rate x production
volume x price - deductible costs (including mining and other costs);
(price = sales price or reference price).
Source: GAO analysis of state statutes, regulations, and expert
literature.
[A] Gross revenue royalties are also sometimes referred to as gross
receipts, gross income, or gross value of the products royalties.
[End of table]
Table 2: Types of Royalties, Including Functional Royalties, Assessed
on Hardrock Mining Operations in Western States, by State:
State:
Unit-based:
Gross revenue:
Net smelter returns:
Net proceeds:
State: Alaska; State lands;
Unit-based: [Empty];
Gross revenue: [Empty];
Net smelter returns: [Empty];
Net proceeds: [Check].
State: Alaska; All lands;
Unit-based: [Empty];
Gross revenue: [Empty];
Net smelter returns: [Empty];
Net proceeds: [Check].
State: Arizona; State lands;
Unit-based: [Empty];
Gross revenue: [Check];
Net smelter returns: [Empty];
Net proceeds: [Empty].
State: Arizona; All lands;
Unit-based: [Empty];
Gross revenue: [Check];
Net smelter returns: [Empty];
Net proceeds: [Check].
State: California; State lands;
Unit-based: [Empty];
Gross revenue: [Check];
Net smelter returns: [Empty];
Net proceeds: [Check].
State: California; All lands;
Unit-based: [Check];
Gross revenue: [Empty];
Net smelter returns: [Empty];
Net proceeds: [Empty].
State: Colorado; State lands;
Unit-based: [Empty];
Gross revenue: [Check];
Net smelter returns: [Empty];
Net proceeds: [Check].
State: Colorado; All lands;
Unit-based: [Check];
Gross revenue: [Check];
Net smelter returns: [Empty];
Net proceeds: [Empty].
State: Idaho; State lands;
Unit-based: [Empty];
Gross revenue: [Check];
Net smelter returns: [Check];
Net proceeds: [Empty].
State: Idaho; All lands;
Unit-based: [Empty];
Gross revenue: [Empty];
Net smelter returns: [Empty];
Net proceeds: [Check].
State: Montana; State lands;
Unit-based: [Empty];
Gross revenue: [Check];
Net smelter returns: [Check];
Net proceeds: [Empty].
State: Montana; All lands;
Unit-based: [Check];
Gross revenue: [Empty];
Net smelter returns: [Check];
Net proceeds: [Empty].
State: Nevada; State lands;
Unit-based: [Empty];
Gross revenue: [Empty];
Net smelter returns: [Empty];
Net proceeds: [Empty].
State: Nevada; All lands;
Unit-based: [Empty];
Gross revenue: [Empty];
Net smelter returns: [Empty];
Net proceeds: [Check].
State: New Mexico; State lands;
Unit-based: [Empty];
Gross revenue: [Check];
Net smelter returns: [Check];
Net proceeds: [Empty].
State: New Mexico; All lands;
Unit-based: [Empty];
Gross revenue: [Check];
Net smelter returns: [Check];
Net proceeds: [Check].
State: Oregon; State lands;
Unit-based: [Check];
Gross revenue: [Check];
Net smelter returns: [Empty];
Net proceeds: [Empty].
State: Oregon; All lands;
Unit-based: [Empty];
Gross revenue: [Empty];
Net smelter returns: [Empty];
Net proceeds: [Empty].
State: Utah; State lands;
Unit-based: [Empty];
Gross revenue: [Check];
Net smelter returns: [Empty];
Net proceeds: [Empty].
State: Utah; All lands;
Unit-based: [Empty];
Gross revenue: [Empty];
Net smelter returns: [Empty];
Net proceeds: [Check].
State: Washington; State lands;
Unit-based: [Empty];
Gross revenue: [Check];
Net smelter returns: [Empty];
Net proceeds: [Empty].
State: Washington; All lands;
Unit-based: [Empty];
Gross revenue: [Check];
Net smelter returns: [Empty];
Net proceeds: [Empty].
State: Wyoming; State lands;
Unit-based: [Check];
Gross revenue: [Check];
Net smelter returns: [Empty];
Net proceeds: [Empty].
State: Wyoming; All lands;
Unit-based: [Empty];
Gross revenue: [Check];
Net smelter returns: [Check];
Net proceeds: [Empty].
State: Total; State lands;
Unit-based: 2;
Gross revenue: 10;
Net smelter returns: 3;
Net proceeds: 3.
State: Total; All Lands;
Unit-based: 3;
Gross revenue: 5;
Net smelter returns: 3;
Net proceeds: 6.
Source: GAO analysis of state statutes and regulations.
Note: Sales and use taxes are excluded. Royalties often apply only to
specific minerals.
[End of table]
Table 3: Royalties, Including Functional Royalties, Assessed on
Hardrock Mining Operations in Alaska:
Alaska: State lands; Production royalty[A];
Type of mines/minerals assessed; Minerals locatable under U.S. General
Mining Act (excludes coal, sodium, potassium, oil, and gas) extracted
from mining claims, leaseholds, or leases on state land;
Type of royalty: Modified net proceeds; Rate determination: Statutory;
Royalty rate: Rate type: Uniform; Current rate: 3%; Base: Mine's net
income;
Royalty deductions and limitations: Deductions: Overhead and operating
expenses, development costs properly charged to expense, depreciation,
some taxes, losses sustained, among other things; Limitations: Subject
to exploration incentive credit.
Alaska: All lands; Mining license tax[B];
Type of mines/minerals assessed; Valuable metals, ores, minerals,
asbestos, gypsum, coal, marketable earth, or stone (but not oil and
gas) extracted from all mines (including that on federal, state, and
private lands);
Type of royalty: Modified net proceeds; Rate determination: Statutory;
Royalty rate: Rate type: Progressive; Current rate: 3% to 7%; Base:
Taxpayer's net income from all mines in state, less depletion;
depletion is percentage that varies by mineral;
Royalty deductions and limitations: Deductions: Overhead and operating
expenses, development costs properly charged to expense, depreciation,
some taxes, losses sustained, among other things; Limitations:
Exemption for first 3.5 years of new mine; subject to exploration
incentive credit.
Source: GAO analysis of state statutes and regulations.
[A] Alaska Stat. § 38.05. 185, § 38.05.212, § 27.30, § 43.65; Alaska
Admin. Code tit. 11, § 86, art. 9; Alaska Admin. Code tit. 11, §
86.760.
[B] Alaska Stat. §§ 43.65.010, 43.65.060 (definitions) 27.30.030;
Alaska Admin. Code tit. 15, § 65.
[End of table]
Table 4: Royalties, Including Functional Royalties, Assessed on
Hardrock Mining Operations in Arizona:
Arizona: State lands: Royalty--minerals[A];
Type of mines/minerals assessed: All metallic ore minerals and
industrial minerals other than common variety minerals (e.g., stone,
gravel, clay, sand) extracted from state lands;
Type of royalty: Gross revenue royalty with reference price; Rate
determination: Statute delegates determination to the State Land
Commissioner, subject to statutory standard and minimum;
Royalty rate: Rate type: Case by case; Current rate: Market royalty
rate; at least 2% of gross value; Base: Gross value determined by
quantity and published prices (or, where unavailable, appraisal of fair
market price). Where processing is performed after the mineral is
extracted, the mineral shall be deemed produced and sold when the
concentrate or cathode results from that processing;
Royalty deductions and limitations: Deductions: None specified in law
or regulation; Limitations: None identified in statute or regulation.
Arizona: All lands: Severance tax--metallic minerals[B];
Type of mines/minerals assessed: Metalliferous minerals ("copper, gold,
silver, molybdenum or other metal or any ore or substance containing
such metals including turquoise") extracted from federal, state or
private land;
Type of royalty: Net proceeds royalty; Rate determination: Statutory;
Royalty rate: Rate type: Uniform rate; Current rate: 2.5% on net
severance base (effectively 1.25% of net revenue); Base: Net severance
base is 50% of difference between gross value of production and
production costs. Gross value of production is the sale price (or price
from last period, if no sale) multiplied by the number of recoverable
units of the mineral;
Royalty deductions and limitations: Deductions: Production costs;
generally the costs incurred in mining and processing until the point
of sale (e.g., primary crusher, reduction works, or delivery of leach
liquor to precipitation or solvent extraction facility); includes
depreciation and property taxes; does not include severance tax and
depletion, as well as corporate expenses and income tax (e.g., these
are not deductible); Limitations: None identified in statute or
regulation.
Arizona: All lands: Transaction privilege tax--mining
classification[C];
Type of mines/minerals assessed: Oil, natural gas, limestone, sand,
gravel, or any other nonmetalliferous mineral product extracted from
all lands; applies to persons in the business of mining, quarrying, or
producing for sale, profit, or commercial use any nonmetalliferous
mineral product;
Type of royalty: Modified gross revenue royalty; Rate determination:
Statutory;
Royalty rate: Rate type: Uniform rate; Current rate: 3-1/8% of the tax
base; Base: The tax base is the "gross proceeds of sales or gross
income derived from the business," "the value of the entire product
mined, quarried or produced for sale, profit or commercial use in this
state" [D];
Royalty deductions and limitations: Deductions: Municipal and Indian
sales taxes; Limitations: None identified in statute or regulation.
Source: GAO analysis of state statutes and regulations.
[A] Ariz. Rev. Stat. § 27-231 et seq.
[B] Ariz. Rev. Stat. § 42-5201 to -5204; gross proceeds or income from
retail sales are not subject to the Severance Tax, but are taxed under
the Transaction Privilege Tax.
[C] Ariz. Rev. Stat. §§ 42-5010, 42-5072, 42-5001-02; sales that are
taxed under the retail classification (5 percent) are not subject to
the mining classification tax.
[D] "Gross income" means the gross receipts of a taxpayer derived from
trade, business, commerce, or sales of tangible personal property or
services. "Gross proceeds of sales" means the value proceeding or
accruing from the sale of tangible personal property without any
deduction on account of the cost of property sold, expense of any kind,
or losses. Retail tax does not apply to sale of precious metal bullion
or monetized bullion.
[End of table]
Table 5: Royalties, Including Functional Royalties, Assessed on
Hardrock Mining Operations in California:
California: State lands: Production royalty[A];
Type of mines/minerals assessed: Minerals except oil, gas, and other
hydrocarbons extracted from leases and prospecting permits on state
lands;
Type of royalty: Modified gross revenue royalty or net proceeds
royalty; Rate determination: Statute delegates choice of type and rate
determination, subject to a minimum, to State Land Commission;
Royalty rate: Rate type: Case by case; Current rate: (1) Preferential
lease. At the option of the Commission, either (a) a royalty, in money
or in kind, of not less than 10% of the gross value of all mineral
production from the leased lands, or (b) a percentage, to be determined
by the Commission, of the net profits derived from mineral extraction
operations under the lease. (2) Negotiated leases. At the option of the
Commission, "a royalty in money or in kind or a percentage of the net
profits." (3) Competitively bid leases. Bidding on the basis of "cash
bonus, royalty rate, net profit, or other single biddable factor;"
Base: Gross value or net profits (except for competitively bid leases)
(the terms are not defined in the code or in regulations.)
Royalty deductions and limitations: Deductions: For gross value,
approved charges associated with transporting or processing the state's
share; Limitations: None identified in statute or regulation.
California: All lands: Fee on gold and silver[B];
Type of mines/minerals assessed: Gold and silver extracted from all
lands;
Type of royalty: Unit-based royalty; Rate determination: Statutory;
Royalty rate: Rate type: Uniform rate; Current rate: $5 per ounce gold,
$0.10 per ounce silver; Base: Ounces of gold/silver mined;
Royalty deductions and limitations: Deductions: None identified in
statute or regulation; Limitations: None identified in statute or
regulation.
Source: GAO analysis of state statutes and regulations.
[A] Cal. Pub. Res. Code § 6895-97; Royalties are also assessed on any
minerals extracted under a prospecting permit (prior to a lease). The
permit royalty is 20 percent.
[B] Cal. Pub. Res. Code § 2207(d)(4)(b)(i); Cal. Code Regs. tit. 14, §
3698.
[End of table]
Table 6: Royalties, Including Functional Royalties, Assessed on
Hardrock Mining Operations in Colorado:
Colorado: State lands: Royalty--general; gems, specimens, and placer
minerals[A];
Type of mines/minerals assessed: All minerals; includes construction
materials, natural oil and gas, oil shale, coal, and geothermal
resources;
Type of royalty: Gross revenue royalty; Rate determination: Statute
delegates to Board of Land Commissioners ("such royalty upon the
product as the board may determine");
Royalty rate: Rate type: Case by case; generally uniform for gems
category; Current rate: No general rate; gems, specimens, and placer
minerals, 7%; Base: Gross revenue of mineral at the mine;
Royalty deductions and limitations: Deductions: None identified in
statute or regulation; Limitations: None identified in statute or
regulation.
Colorado: State lands: Royalty--gold and silver[B];
Type of mines/minerals assessed: Gold and silver extracted from state
lands;
Type of royalty: Either gross revenue or net proceeds; Rate
determination: Statute delegates to Board of Land Commissioners ("such
royalty upon the product as the board may determine");
Royalty rate: Rate type: Uniform; Current rate: 5% of gross value or
10% of net value; Base: Either gross value or net value;
Royalty deductions and limitations: Deductions: For gross value, none
identified in statute or regulation; for net value, as specified in
lease; Limitations: None identified in statute or regulation.
Colorado: State lands: Royalty--uranium[C];
Type of mines/minerals assessed: Uranium extracted from state lands;
Type of royalty: Gross revenue royalty; Rate determination: Statute
delegates to Board of Land Commissioners ("such royalty upon the
product as the board may determine");
Royalty rate: Rate type: Progressive; Current rate: 5% to over 12%
depending on the published price per pound of yellowcake (U3O8); rate
increases as price increases; Base: Gross value;
Royalty deductions and limitations: Deductions: None identified in
statute or regulation; Limitations: None identified in statute or
regulation.
Colorado: All lands: Severance tax--metallic minerals[D];
Type of mines/minerals assessed: Metallic minerals; all minerals except
molybdenum, oil, gas, coal, oil shale, rock, sand, gravel, stone
products, earths, limestone, carbon dioxide, dolomite extracted from
all mines/lands;
Type of royalty: Modified gross revenue royalty[F]; Rate determination:
Statutory;
Royalty rate: Rate type: Uniform rate above income exclusion; Current
rate: 2.25%; Base: Gross income above $19M/year Gross income is "the
value of ore immediately after its removal from the mine, and does not
include any value added subsequent to mining by any treatment
processes";
Royalty deductions and limitations: Deductions: Any value added after
mining (e.g., crushing, transportation, etc.); Limitations: Subject to
credit for amount of the royalty, up to 50% of the severance tax.
Colorado: All lands: Severance tax--molybdenum[E];
Type of mines/minerals assessed: Molybdenum ore extracted from all
mines/lands;
Type of royalty: Unit-based royalty; Rate determination: Statutory;
Royalty rate: Rate type: Uniform above exclusion; Current rate: $0.05
per ton above 625,000 tons per quarter; Base: Not applicable; Royalty
deductions and limitations: Deductions: None identified in statute or
regulation; Limitations: None identified in statute or regulation.
Source: GAO analysis of state statutes and regulations.
[A] Colo. Rev. Stat. § 36-1-113 and correspondence, State of Colorado,
Mar. 27, 2008.
[B] Colo. Rev. Stat. § 36-1-113 and correspondence, State of Colorado,
Mar. 27, 2008.
[C] Colo. Rev. Stat. § 36-1-113 and correspondence, State of Colorado,
Mar. 27, 2008.
[D] Colo. Rev. Stat. § 39-29-102, 103.
[E] Colo. Rev. Stat. § 39-29-102, 104.
[F] The gross revenue royalty can function much like a net smelter
returns royalty depending on how the gross revenue is measured and the
deductions allowed.
[End of table]
Table 7: Royalties, Including Functional Royalties, Assessed on
Hardrock Mining Operations in Idaho:
Idaho: State lands: Royalty--general[A];
Type of mines/minerals assessed: Phosphate, sodium, asbestos, gold,
silver, lead, zinc, copper, antimony, geothermal resources, and all
other minerals extracted from state lands;
Type of royalty: Net smelter returns royalty (most minerals); Rate
determination: Statute delegates to Board of Land Commissioners subject
to standard of "fair and in the interest of the state," with a
statutory minimum of 2.5%;
Royalty rate: Rate type: Uniform; Current rate: 5%; Base: Value of
mineral produced and saved; market value or actual price, whichever is
higher; gross receipts earned or received at point of sale of first
marketable minerals;
Royalty deductions and limitations: Deductions: Reasonable
transportation costs to closest feasible point of sale, smelter or
treatment costs for material that requires additional processing to
obtain marketable minerals after being mined and removed from leased
land; Limitations: Rental payments are credited toward the royalties.
Idaho: State lands: Royalty--riverbed mineral leases[B];
Type of mines/minerals assessed: Gold extracted from submerged state
lands;
Type of royalty: Gross revenue royalty; Rate determination: Statute
delegates to Board of Land Commissioners subject to standard of "fair
and in the interest of the state," with a statutory minimum of 2.5%;
Royalty rate: Rate type: Uniform; Current rate: 5%; Base: Value of
mineral produced and saved; market value or actual price, whichever is
higher;
Royalty deductions and limitations: Deductions: None identified in
statute or regulation; Limitations: Rental payments are credited toward
the royalties.
Idaho: All lands: Mining license tax[C];
Type of mines/minerals assessed: Quartz, gold, silver, copper, lead,
zinc, coal, phosphate, limestone, and other metals and minerals
extracted from all mines;
Type of royalty: Net proceeds royalty; Rate determination: Statutory;
Royalty rate: Rate type: Uniform; Current rate: 1%; Base: Net value of
ore; taxpayer may select either of two methods of computation[D];
Royalty deductions and limitations: Deductions: (1) Internal Revenue
Service method - deductions include costs of mining and processing, and
depletion[E]; (2) Interior Method-deductions include costs of mining
and transportation, and depletion; Limitations: None identified in
statute or regulation.
Source: GAO analysis of state statutes and regulations.
[A] Idaho Code § 47-701 et seq; correspondence, State of Idaho Minerals
Program, Mar. 25, 2008; at present, there is no production from
hardrock mineral leases in Idaho.
[B] Idaho Code § 47-701 et seq. Idaho Admin. Code r. 20.03.05.001 et
seq.; State of Idaho Minerals Program, Mar. 25, 2008.
[C] Idaho Code §§ 47-1201, 47-1202, 47-1205; State of Idaho Minerals
Program, Mar. 25, 2008.
[D] Depletion is an accounting method used to reflect the actual
physical reduction of natural resources in asset value; two-thirds of
the tax is placed into an abandoned mine reclamation fund.
[E] Referencing an Internal Revenue Service method and an Interior
method.
[End of table]
Table 8: Royalties, Including Functional Royalties, Assessed on
Hardrock Mining Operations in Montana:
Montana: State Lands: Royalty--Metalliferous Mines[A];
Type of mines/minerals assessed: Metalliferous minerals (including
gold, silver, lead, zinc, copper, platinum, iron, and all other
metallic minerals) or gems (sapphires, rubies, and other stones
commonly known as "precious stones" or "semiprecious stones");
Type of royalty: Gross revenue or net smelter returns; Rate
determination: Statute requires royalty, and delegates to Board of Land
Commissioners subject to standard of "a royalty which shall, together
with other considerations to be paid by the mining lessee, constitute
the full market value of the leasehold interest," and a minimum
percentage;
Royalty rate: Rate type: Case by case, within direction of statute;
Current rate: 5% to 8% of returns, but no less than 5% of the fair
market value; Base: Fair market value is defined as the value of the
minerals or gems in raw crude form as recovered at the mine site;
Returns are defined as the net amount received by the shipper after
deducting reasonable transportation costs to the closest feasible point
of sale, smelting charges and deductions, and other treatment costs;
Royalty deductions and limitations: Deduction: (Note: For returns, any
cost of producing or treating at the mine is not included as a
deduction); Limitation: None identified in statute or regulation.
Montana: State Lands: Royalty--non metallic minerals[B];
Type of mines/minerals assessed: Nonmetallic minerals (not including
coal, oil, or gas);
Type of royalty: Lease-specific; Rate determination: Statute requires
royalty, and delegates to Board of Land Commissioners subject to
certain bases and the standard that the rates shall be as would be
charged by private owners under similar circumstances, or as in the
determination of the board is fair and reasonable;
Royalty rate: Rate type: Case by case, within direction of statute;
Current rate: Not available; Base: Gross value by either weight or
cubic measurement;
Royalty deductions and limitations: Deductions: Not applicable;
Limitations: Not applicable.
Montana: All lands: Mining license tax--metal mine[C];
Type of mines/minerals assessed: Gold, silver, copper, lead, or any
other metal or metals or precious or semiprecious gems or stones of any
kind extracted from all mines on state lands;
Type of royalty: Net smelter returns royalty; Rate determination:
Statutory;
Royalty rate: Rate type: Uniform within each category; Current rate:
Precious and base metal processed concentrates shipped to a refinery--
1.6%; mineral concentrates shipped to smelter, mill, or reduction
works--1.81%; Base: Gross value of product, less first $250,000; Gross
value is the receipts received from the sale of concentrates or metals
extracted from mines or recovered from the smelting, milling,
reduction, or treatment of such ores. Receipts received is defined as
the payment received, less allowable deductions;
Royalty deductions and limitations: Deductions: Treatment and refinery
charges; costs of transportation from the mine or mill to the smelter,
roaster, or other processing facility, quantity, price, impurity and
penalty charges; and interest; Limitations: None identified in statute
or regulation.
Montana: All lands: Mining license tax--micaceous mines[D];
Type of mines/minerals assessed: Vermiculite, perlite, kerrite,
maconite, or any other micaceous minerals extracted from all mines on
state lands;
Type of royalty: Unit-based; Rate determination: Statutory;
Royalty rate: Rate type: Uniform; Current rate: $0.05 per ton; Base:
Not applicable;
Royalty deductions and limitations: Deductions: Not applicable;
Limitations: None identified in statute or regulation.
Montana: All lands: Resource indemnity and groundwater assessment
tax[E];
Type of mines/minerals assessed: Any precious stones or gems, gold,
silver, copper, coal, lead, petroleum, natural gas, oil, uranium, talc,
vermiculite, limestone, or other nonrenewable, merchantable products
extracted from all mines on state lands;
Type of royalty: Metals--net smelter returns royalty; Selected
minerals--revenue royalty with reference price; Rate determination:
Statutory;
Royalty rate: Rate type: Uniform within each category; Current rate:
Default rate: 0.5% of gross value > $5,000; garnets: 1% of gross value
> $2,500; Limestone: 10% of gross value > $250; vermiculite: 2% of
gross value > $1,250; talc: 4% of gross value > $625; Base: Gross
value, defined as the market value of any merchantable mineral
extracted. For several minerals, the gross value is fixed by the
statute, with reference to a price index. For metals and gems, the
gross value is the receipts received (see above under License Tax);
Royalty deductions and limitations: Deductions: Generally, none; metals
and gems--as outlined above under License Tax; Limitations: None
identified in statute or regulation.
Source: GAO analysis of state statutes and regulations.
[A] Mont. Code Ann. § 77-3-101 et seq; Mont. Admin. R. 36.25.601-617.
[B] Mont. Code Ann. § 77-3-201-211.
[C] Mont. Code Ann. §§ 15-37-101 et seq.; Mont. Code Ann. §§ 15-23-801.
[D] Mont. Code Ann. § 15-37-201.
[E] Mont. Code Ann. § 15-38-101-136; persons who have paid the license
tax for metal mines are exempt from this tax.
[End of table]
Table 9: Royalties, Including Functional Royalties, Assessed on
Hardrock Mining Operations in Nevada:
Nevada: State lands: Royalty[A];
Type of mines/minerals assessed: Minerals extracted from state lands;
Type of royalty: Lease-specific; Rate determination: Statute delegates
broad authority for lease of public lands to Administrator of the
Division of State Lands, for such terms and consideration as the
Administrator of the Division of State Lands may determine reasonable
based upon the fair market value;
Royalty rate: Rate type: Case by case; Current rate: Not available;
Base: Not available;
Royalty deductions and limitations: Deductions: None identified in
statute or regulation; Limitations: None identified in statute or
regulation.
Nevada: All lands: Extraction/severance tax[B];
Type of mines/minerals assessed: Ores, coal, oil, gas, or other mineral
substances, but not sand and gravel extracted from all lands;
Type of royalty: Net proceeds royalty; Rate determination: Statutory;
Royalty rate: Rate type: Progressive (tax rate increases as mining
efficiency increases, and maximum rate imposed at threshold proceeds
level); Current rate: 2% to 5%; rate is progressive based on the ratio
of net proceeds to gross proceeds (seven steps between <10% and >50%).
Also: If net proceeds over $4M then at 5%; if below $4M, and the county
tax ad valorem is more than 2%, then that rate shall be the minimum
tax; Base: Net proceeds defined as gross value less deductions. Gross
value of mineral product is defined as the proceeds of the sale of the
product (applies to all minerals including any reduction, beneficiation
or any treatment used by the producer to obtain a commercially
marketable mineral product);
Royalty deductions and limitations: Deductions: Deductions include
extraction costs, processing, refining and sale costs, transportation
from the mine to place of processing and sale, marketing costs,
operating costs, royalties, reclamation costs, and certain
administrative overhead costs; taxes and liability insurance costs are
not deductible; Limitations: None identified in statute or regulation.
Source: GAO analysis of state statutes and regulations.
[A] Nev. Rev. Stat. §§ 322.010-322.075; in practice, there are no
current state lands mineral leases because Nevada owns very little
available land.
[B] Nev. Rev. Stat. Ch. 362; Nev. Admin. Code Ch. 362.
[End of table]
Table 10: Royalties, Including Functional Royalties, Assessed on
Hardrock Mining Operations in New Mexico:
New Mexico: State Lands: Royalty (general)[A];
Type of mines/minerals assessed: Minerals other than common salt, oil
and gas, coal, shale, clay, gravel, building stone and building
materials, potassium, sodium, phosphorus and other minerals of similar
occurrence, and their salts and compounds; and excepting rare earths,
etc., extracted from public lands over which the Commissioner of Public
Lands has jurisdiction[J];
Type of royalty: Net smelter returns royalty; Rate determination:
Delegated to Commissioner of Public Lands with statutory minimum;
Royalty rate: Rate type: Case by case, subject to statutory minimum;
Current rate: As determined by the Commissioner, but not less than 2%;
Base: Gross returns shall be based on the arm's length sales price of
the produced minerals (from the smelter, mill, reduction process, or
other sale) (including all premiums, bonuses, and other consideration
of any kind received by the lessee for the minerals produced);
Royalty deductions and limitations: Deductions: Reasonable
transportation and smelting or reduction charges, up to 50% of gross
returns; Limitations: None identified in statute or regulation.
New Mexico: State Lands: Royalty on selected minerals, such as uranium,
and gems[B];
Type of mines/minerals assessed: Rare earths, precious stones or
semiprecious stones, uranium, thorium, plutonium, and any other mineral
designed by the Atomic Energy Commission to be peculiarly essential to
the production of fissionable materials extracted from all public lands
over which the Commissioner of Public Lands has jurisdiction[J];
Type of royalty: Net smelter returns royalty; Rate determination:
Delegated to Commissioner of Public Lands with statutory minimum of 5%;
Royalty rate: Rate type: Case by case subject to statutory minimum;
Current rate: Not available; no less than 5%; Base: Gross returns shall
be based on the arm's-length sales price of the produced minerals (from
the smelter, mill, reduction process, or other sale) and shall include,
if applicable, all premiums, bonuses, and other consideration of any
kind received by the lessee for the minerals produced;
Royalty deductions and limitations: Deductions: Reasonable
transportation and smelting or reduction charges, up to 50% of gross
returns; Limitations: None identified in statute or regulation.
New Mexico: State Lands: Royalty on selected minerals and salts[C];
Type of mines/minerals assessed: Potassium, sodium, phosphorus, and
other minerals of similar occurrence and their salts and compounds,
including chlorides, sulphates, carbonates, borates, silicates,
nitrates, and any and all other salts and compounds; except sodium
chloride extracted from all public lands over which the Commissioner of
Public Lands has jurisdiction[J];
Type of royalty: Gross revenue royalty; Rate determination: Statute
delegates to Commissioner to grant leases; leases must contain a
royalty, to be established by regulation[K];
Rate type: Case by case, within direction of statute, and for selected
minerals, subject to a minimum; Current rate: Not available; Base:
Gross value of the product after processing;
Royalty deductions and limitations: Deductions: None identified in
statute or regulation; Limitations: None identified in statute or
regulation.
New Mexico: All lands: Severance tax--general provisions[D];
Type of mines/minerals assessed: All metalliferous and nonmetalliferous
minerals extracted from all lands;
Type of royalty: Where posted market price available--Net smelter
returns royalty Default--Gross revenue royalty Where mineral requires
processing before sale--Net smelter returns royalty; Rate
determination: Statutory;
Royalty rate: Rate type: Uniform; Current rate: 0.125% (1/8); Base:
Taxable value is defined as the gross value less rental and royalty
payments to state or federal governments. Gross value is the sales
value of the severed and saved product at the first marketable point;
however, where posted field or market price is available, it shall be
used;
Royalty deductions and limitations: Deductions: Deductions for
calculation of gross value: (1) The default is no deductions; (2) Where
posted field or market price is used, the costs of hoisting, crushing,
and loading necessary to place the severed product in marketable form
and place are deductible, up to 50% of the posted field or market
price; (3) For products that must be processed or beneficiated before
sale, the freight charges from the point of severance to the point of
first sale and the cost of processing or beneficiation may be deducted;
Limitations: None identified in statute or regulation.
New Mexico: All lands: Severance tax--copper, lead, zinc, gold,
silver[E];
Type of mines/minerals assessed: Copper, lead, zinc, gold, and silver
extracted from all lands;
Type of royalty: Net proceeds royalty; Rate determination: Statutory;
Royalty rate: Rate type: Uniform within several categories; Current
rate: Copper 1/2%; gold and silver 1/5%; lead and zinc 1/8%; Base:
Taxable value = gross value less rental or royalty payments to state or
federal governments. Gross value: Copper, lead, and zinc = 66.67% of
sales value from published price data; Gold = sales value from
published price data; Silver = 80% of sales value from published price
data;
Royalty deductions and limitations: Deductions: Deductions for
calculation of gross value: Standard deduction of 50% of sales value
for hoisting, crushing, loading, processing, and beneficiation;
Limitations: None identified in statute or regulation.
New Mexico: All lands: Severance tax--Molybdenum[F];
Type of mines/minerals assessed: Molybdenum extracted from all lands;
Type of royalty: Net proceeds royalty/standard deduction; Rate
determination: Statutory;
Royalty rate: Rate type: Uniform; Current rate: 0.125% (1/8); Base:
Taxable value is the gross value less rental or royalty payments to
State or U.S. Gross value is the value of molybdenum in concentrates
shipped from mine;
Royalty deductions and limitations: Deductions: Deductions for
calculation of gross value: Standard deduction of 50% of the value;
Limitations: None identified in statute or regulation.
New Mexico: All lands: Severance tax--potash[G];
Type of mines/minerals assessed: Potash or potash products extracted
from all lands;
Type of royalty: Net proceeds; Rate determination: Statutory;
Royalty rate: Rate type: Uniform; Current rate: 2.5%; Base: Taxable
value is the gross value less rental or royalty payments to state or
federal governments; gross value: (1) for potash requiring processing
or beneficiation, 33-1/3% of sale proceeds or value (2) otherwise, 40%
of the posted field or market price;
Royalty deductions and limitations: Deductions: Actual cost of
hoisting, crushing, and loading, up to 50% of market price;
Limitations: None identified in statute or regulation.
New Mexico: All lands: Severance tax--uranium[H];
Type of mines/minerals assessed: Uranium extracted from all lands;
Type of royalty: Net proceeds royalty[L]; Rate determination:
Statutory;
Royalty rate: Rate type: Uniform; Current rate: 3.50% on taxable value
(effectively 1.75% on revenue); Base: Taxable value is 50% of sales
price of the content of uranium oxide;
Royalty deductions and limitations: Deductions: None identified in
statute or regulation; Limitations: None identified in statute or
regulation.
New Mexico: All lands: Resources excise tax (severers and
processors)[I];
Type of mines/minerals assessed: Metalliferous and nonmetalliferous
extracted from all lands;
Type of royalty: Modified gross revenue royalty; Rate determination:
Statutory;
Royalty rate: Rate type: Uniform within several categories; Current
rate: Default 0.75% Potash 0.5% (severers) or 0.125% (processors);
Molybdenum 0.125%; Base: Taxable value, which is the value after
severing or processing;
Royalty deductions and limitations: Deductions: Royalties paid to state
or federal governments; proceeds from sales to the State, U.S., tribes,
or nonprofit organizations; Limitations: The Resources Excise Tax
imposes a resources tax on severers and a processors tax on processors;
however, only one of the two taxes is imposed on a given mineral
product. If the mineral is mined and processed in state, only the
processors tax is paid.
Source: GAO analysis of state statutes and regulations.
[A] N.M. Stat. Ann. § 19-8-14, -22; N.M. Admin. Code § 19.2.2; if a
lease is renewed to a fourth term (where minerals have not yet been
discovered), advance royalties are due on a per acre basis.
[B] N.M. Stat. Ann. § 19-8-14, -22; N.M. Admin. Code § 19.2.2.
[C] N.M. Stat. Ann. § 19-8-4, § 19-8-6; N.M. Admin. Code § 19.2.3.2,
19.2.3.12.
[D] N.M Stat. Ann. § 7-26-1 et seq.
[E] N.M Stat. Ann. § 7-26-4, -5.
[F] N.M. Stat. Ann. § 7-26-4, -5.
[G] N.M Stat. Ann. § 7-26-4.
[H] N.M. Stat. Ann. § 7-26-7, § 7-26-4(I).
[I] N.M. Stat. Ann. § 7-25-1-9; there also is a service tax, which
essentially imposes the severer's tax on a nonowner severer where the
product is not otherwise taxed by the resource excise tax.
[J] For example, granted to New Mexico from the United States in the
New Mexico enabling act.
[K] Regulation provides that royalties will be established by the
Commissioner on a negotiated basis. The regulation establishes minimum
royalties for potassium chloride and sulfates, but the Commissioner may
issue a lease at a reduced rate upon a showing of good cause.
[L] Although structured like a gross revenue royalty, the taxable value
discount of 50% makes the royalty function more like a net proceeds
royalty with standard deduction.
[End of table]
Table 11: Royalties, Including Functional Royalties, Assessed on
Hardrock Mining Operations in Oregon:
Oregon: State lands: Royalty--metallics and uranium[A];
Type of mines/minerals assessed: Metallic minerals removed in
quantities greater than 10 yards per year extracted from on-shore state-
owned lands[C];
Type of royalty: Gross revenue royalty; Rate determination: Statute
delegates rules and conditions of leases to the Department of State
Lands; regulations specify rate;
Royalty rate: Rate type: Uniform; Current rate: 5%; Base: Gross value
of minerals at the mine mouth;
Royalty deductions and limitations: Deductions: None specified in
statute or regulation; Limitations: Rent ($1 per acre per year) is
credited against annual royalties.
Oregon: State lands: Royalty--Non-metallics[B];
Type of mines/minerals assessed: Nonmetallic minerals removed in
quantities greater than 10 yards per year extracted from on-shore state-
owned lands;
Type of royalty: Unit-based; Rate determination: Statute delegates
rules and conditions of leases to the Department of State Lands;
regulations do not specify terms for leases of nonmetallic minerals,
and delegate determination of royalty to Director subject to "fair and
reasonable" standard;
Royalty rate: Rate type: Case by case; Current rate: A rate per ton to
be determined by the Director to be fair and reasonable under the
particular lease; Base: Not applicable;
Royalty deductions and limitations: Deductions: Not applicable;
Limitations: Rent ($1 per acre per year) is credited against annual
royalties.
Source: GAO analysis of state statutes and regulations.
[A] OR Rev Statute § 273.775 thru 790; Or. Admin. R. § 141-071-0400 et
seq, -0610, -0620.
[B] OR Rev Statute § 273.775 thru 790; Or. Admin. R. § 141-071-0400 et
seq, -0610.
[C] State statute provides for royalties for use of stream bed
materials, but prohibits leases of submersible and submerged lands for
hardrock mineral mining.
[End of table]
Table 12: Royalties, Including Functional Royalties, Assessed on
Hardrock Mining Operations in Utah:
Utah: State lands: Royalty[A];
Type of mines/minerals assessed: Classified minerals, including
metalliferous, potash, phosphate, gemstone/fossil, gypsum, gilsonite,
and others extracted from mines on lands and mineral estates owned or
held in trust by the state;
Type of royalty: Gross revenue royalty; Rate determination: Statute
requires a royalty on every mineral lease; directs Division of
Forestry, Fire and State Lands to issue rules specifying the basis upon
which the royalty shall be computed;
Royalty rate: Rate type: Uniform within each category; Current rate:
metalliferous metals, fissionable (e.g., uranium)--8%; Metalliferous
metals, non-fissionable--4% potash, phosphate, gypsum -- 5%;
gemstone/fossil--10% (subject to annual minimum of $5 per acre)
gilsonite--10% (additional categories are listed in the regulation);
Base: Actual compensation received (plus value of any services, in-
kind, and other non-monetary compensation);
Royalty deductions and limitations: Deductions: None; Limitations: Rent
paid is credited against royalty.
Utah: All lands: Severance tax on metals and metalliferous minerals[B];
Type of mines/minerals assessed: Ore, metal, or other substance
containing gold, iron, mercury, nickel, uranium, or other of 57 listed
metals; does not include gem stones, potash, sand and gravel, oil, gas,
and coal, and others extracted from all lands;
Type of royalty: Net proceeds royalty/standard deduction; Rate
determination: Statutory;
Royalty rate: Rate type: Uniform; Current rate: 2.6% of the taxable
value; Base: For minerals other than uranium, the taxable value is
defined as the gross proceeds from sale, less exemption of first
$50,000/year/mine, then reduced by standard percentage deduction. For
uranium, the gross proceeds is the amount received for the sale of
yellowcake;
Royalty deductions and limitations: Deductions: Metal, 70% deduction is
applied; ore (raw materials with metals content less than 15%) shipped
or sold out of state, 20% deduction is applied; Limitations: None
identified in statute or regulation.
Utah: All lands: Severance tax--beryllium[C];
Type of mines/minerals assessed: Beryllium;
Type of royalty: Other[D] (cost-based); Rate determination: Statutory;
Royalty rate: Rate type: Uniform within several categories; Current
rate: 2.6% of the taxable value; Base: Taxable value is 125% of the
direct mining costs;
Royalty deductions and limitations: Deductions: Not applicable;
Limitations: None identified in statute or regulation.
Source: GAO analysis of state statutes and regulations.
[A] Utah Code Ann. § 65A-6-1, 2; Utah Admin. R. R652-20-200, 1000,
4000; correspondence, State of Utah SITLA, Mar. 25-26, 2008; royalties
may be readjusted in leases with readjustment clause.
[B] Utah Code Ann. § 59-5-201, 203; Utah Admin. R. R865-16R.
[C] Utah Code Ann. § 59-5-201-203; Utah Admin. R. R865-16R.
[D] We categorized this royalty as other because it does not fit into
the four categories.
[End of table]
Table 13: Royalties, Including Functional Royalties, Assessed on
Hardrock Mining Operations in Washington:
Washington: State lands: Royalty[A];
Type of mines/minerals assessed: Valuable minerals and specified
materials (except rock, gravel, sand, silt, coal, or hydrocarbons)
extracted from mines on lands and mineral estates owned or held in
trust by the state;
Type of royalty: Modified gross revenue royalty; Rate determination:
Statute requires production royalty on all leases (mining contracts);
delegates to Board of Natural Resources;
Royalty rate: Rate type: Uniform; Current rate: 5%; Base: "Gross
receipts" are receipts paid, earned, or received, at the point of sale
of the first marketable valuable mineral(s) produced, subject to
deduction;
Royalty deductions and limitations: Deductions: Limited to
transportation costs which are part of the development plan approved by
the department; Limitations: None identified in statute or regulation.
Washington: All lands: Business tax[B];
Type of mines/minerals assessed: All (coal, oil, natural gas, ore,
stone, sand, gravel, clay, mineral, or other natural resource product)
extracted from all lands;
Type of royalty: Gross revenue royalty; Rate determination: Statutory;
Royalty rate: Rate type: Uniform; Current rate: 0.48%; Base: The value
of products and byproducts extracted for use or sale;
Royalty deductions and limitations: Deductions: None identified in
statute or regulation; Limitations: None identified in statute or
regulation.
Source: GAO analysis of state statutes and regulations.
[A] Wash. Rev. Code §§ 79.14.300 et seq, .410, .420; Wash Admin. Code §
333.16155; the royalty may be revised upon renewal of a mining
contract, by reference to then existing law.
[B] Wash. Rev. Code § 82.04.100, 230; extractors also may be subject to
a retail or wholesaler tax; however, the extracting tax is credited
against any retail/wholesale liability, effectively voiding it based on
current rates.
[End of table]
Table 14: Royalties, Including Functional Royalties, Assessed on
Hardrock Mining Operations in Wyoming:
Wyoming: State lands: Royalty--general[A];
Type of mines/minerals assessed: Metallic and nonmetallic rocks and
minerals extracted from state lands;
Type of royalty: Default gross revenue royalty provided in regulation;
Rate determination: Statute delegates to Board of Land Commissioners to
establish in rules and regulations for mineral leases[H];
Royalty rate: Rate type: Progressive (default rates), case by case;
Current rate: Minimum $0.50/ton. Default rates are 5% to 10%, based on
the sales value per ton; Base: Sales value, which is total
consideration received for state production;
Royalty deductions and limitations: Deductions: None identified in
statute or regulation; Limitations: None identified in statute or
regulation.
Wyoming: State lands: Royalty--trona[B];
Type of mines/minerals assessed: Trona/sodium extracted from state
lands;
Type of royalty: Gross revenue royalty provided in regulation; Rate
determination: Statute delegates to Board of Land Commissioners to
establish in rules and regulations for mineral leases. Regulations
provide the royalty "shall be based on the terms of the particular
lease agreement," but that specified default rates shall apply unless
specifically authorized by the board;
Royalty rate: Rate type: Uniform (default), case by case; Current rate:
6% (default); Base: Gross sales value of the soda ash and sodium
byproducts sold, which is total consideration received for state
production;
Royalty deductions and limitations: Deductions: None identified in
statute or regulation; Limitations: None identified in statute or
regulation.
Wyoming: State lands: Royalty--uranium[C];
Type of mines/minerals assessed: Uranium extracted from state lands;
Type of royalty: Lease-specific, with default gross revenue royalty
provided in regulation; Rate determination: Statute delegates to Board
of Land Commissioners to establish in rules and regulations for mineral
leases Regulations provide the royalty "shall be based on the terms of
the particular lease agreement," but that specified default rates shall
apply unless specifically authorized by the board;
Royalty rate: Rate type: Progressive (default rates), case-by-case;
Current rate: 2.5% to 3%, based on the average price of yellowcake
based on gross yearly sales realization (default); Base: Sales value,
which is total consideration received for state production;
Royalty deductions and limitations: Deductions: None identified in
statute or regulation; Limitations: None identified in statute or
regulation.
Wyoming: State lands: Royalty--zeolite[D];
Type of mines/minerals assessed: Zeolite extracted from state lands;
Type of royalty: Lease-specific, with default unit-based provided in
regulation; Rate determination: Statute delegates to Board of Land
Commissioners to establish in rules and regulations for mineral leases.
Regulations provide the royalty "shall be based on the terms of the
particular lease agreement," but that specified default rates shall
apply unless specifically authorized by the board;
Royalty rate: Rate type: Progressive; (default rates), case by case;
Current rate: $0.55 to $0.60+ per ton, depending on the average sale
price for bulk zeolite products (default); Base: Tons of mineral
production;
Royalty deductions and limitations: Deductions: None identified in
statute or regulation; Limitations: None identified in statute or
regulation.
Wyoming: All lands: Mining severance tax--general[E];
Type of mines/minerals assessed: All "other valuable deposits" (other
than coal, oil and gas, trona, bentonite, uranium, and sand and gravel)
extracted from all lands;
Type of royalty: Gross revenue royalty[I]; Rate determination:
Statutory;
Royalty rate: Rate type: Uniform; Current rate: 2%; Base: Value of the
gross product, which is the fair market value of the minerals at the
mouth of the mine, after extraction;
Royalty deductions and limitations: Deductions: None identified in
statute or regulation; Limitations: None identified in statute or
regulation.
Wyoming: All lands: Mining severance tax--uranium[F];
Type of mines/minerals assessed: Uranium extracted from all lands;
Type of royalty: Modified net smelter returns royalty/standard
deduction; Rate determination: Statutory;
Royalty rate: Rate type: Uniform;; progressive under currently active
provision; Current rate: The statutory tax rate is 4%. However, the tax
is suspended for all uranium production occurring between January 1,
1995, and March 31, 2009, except for uranium production beginning with
the month that follows 6 consecutive months at which the spot market
price per pound of nonenriched uranium concentrate is at least $14.00
(according to specified indices). In such case, the tax is 1% to 4%
depending upon the spot market price; Base: Value of the gross product,
which is the fair market value of the minerals at the mouth of the
mine, after extraction, and not including any processing. Fair market
value is calculated by multiplying the individual producer's sales
value of yellow cake less all royalties, ad valorem production taxes,
and severance taxes; multiplied by the industry factor;
Royalty deductions and limitations: Deductions: The industry factor
provides a standard deduction and is an average of all uranium
producers' ratios of total mining costs to total mining and processing
costs incurred to produce yellow cake; Limitations: None identified in
statute or regulation.
Wyoming: All lands: Mining severance tax--trona[G];
Type of mines/minerals assessed: Trona extracted from all lands;
Type of royalty: Modified net smelter returns royalty/standard
deduction; Rate determination: Statutory;
Royalty rate: Rate type: Uniform; Current rate: 4%; Base: Fair market
value is that at the mouth of the mine, and not including any
processing;
Royalty deductions and limitations: Deductions: The value for tax
purposes is the fair market value of soda ash at the plant (f.o.b.)
multiplied by the industry factor (32.5%) divided by the individual
producer's trona-to-soda ash ratio less exempt royalties (the industry
factor divided by ration represent a percentage deduction);
Limitations: None identified in statute or regulation.
Source: GAO analysis of state statutes and regulations.
[A] Wyo. Stat. § 36-6-101; Wyo. Admin. Code Land LC Ch. 24 § 2, § 7;
under certain circumstances, the board can reduce a royalty after the
mine is operating.
[B] Wyo. Stat. § 36-6-101; Wyo. Admin. Code Land LC Ch. 20 § 2, § 7(a).
[C] Wyo. Stat. § 36-6-101; Wyo. Admin. Code Land LC Ch. 21 § 2, § 7(a).
[D] Wyo. Stat. § 36-6-101; Wyo. Admin. Code Land LC Ch. 23 § 2, § 7(a).
[E] Wyo. Stat. Tit. 39, ch. 14, art. 7; Wyo. Stat. § 39-14-701 et seq.
[F] Wyo. Stat. § 39-14-503.
[G] Wyo. Stat. § 39-14-301 et seq.
[H] Regulations provide the royalty "shall be based on the terms of the
particular lease agreement," but that specified default rates shall
apply unless specifically authorized by the board, and subject to a
minimum.
[I] For minerals requiring processing before sale (i.e., at the mouth
of the mine), the royalty would function similar to a net smelter
returns in which the cost of processing is deducted.
[End of table]
[End of enclosure]
Enclosure III: U.S. Import and Export Trends on Hardrock Minerals:
This enclosure provides information on trends in U.S. imports and
exports of hardrock minerals, as measured by USGS's calculations for
net import reliance. Table 15 shows annual net import reliance for 15
hardrock minerals.
Table 15: U.S. Net Import Reliance for 15 Hardrock Minerals, 1975
through 2007:
Year: 1975;
Barite: 32;
Copper: E;
Fluorspar: 83;
Gold: 52;
Gypsum: 34;
Lead: 11;
Magnesium compounds: 4;
Magnesium metal: E;
Nickel[A]: 72;
Palladium: [C];
Perlite: [B];
Platinum: [C];
Silver: 30;
Tungsten: 46;
Zinc: 61.
Year: 1976;
Barite: 45;
Copper: 12;
Fluorspar: 77;
Gold: 76;
Gypsum: 35;
Lead: 15;
Magnesium compounds: [Empty];
Magnesium metal: E;
Nickel[A]: 72;
Palladium: [C];
Perlite: [B];
Platinum: [C];
Silver: 50;
Tungsten: 53;
Zinc: 58.
Year: 1977;
Barite: 44;
Copper: 13;
Fluorspar: 80;
Gold: 61;
Gypsum: 31;
Lead: 13;
Magnesium compounds: E;
Magnesium metal: E;
Nickel[A]: 75;
Palladium: [C];
Perlite: [B];
Platinum: [C];
Silver: 31;
Tungsten: 52;
Zinc: 57.
Year: 1978;
Barite: 36;
Copper: 20;
Fluorspar: 84;
Gold: 53;
Gypsum: 32;
Lead: 12;
Magnesium compounds: E;
Magnesium metal: E;
Nickel[A]: 80;
Palladium: [C];
Perlite: [B];
Platinum: [C];
Silver: 48;
Tungsten: 56;
Zinc: 66.
Year: 1979;
Barite: 40;
Copper: 13;
Fluorspar: 86;
Gold: 50;
Gypsum: 35;
Lead: 5;
Magnesium compounds: E;
Magnesium metal: E;
Nickel[A]: 75;
Palladium: [C];
Perlite: [B];
Platinum: [C];
Silver: 42;
Tungsten: 58;
Zinc: 63.
Year: 1980;
Barite: 44;
Copper: 16;
Fluorspar: 91;
Gold: 18;
Gypsum: 35;
Lead: E;
Magnesium compounds: E;
Magnesium metal: E;
Nickel[A]: 76;
Palladium: [C];
Perlite: [B];
Platinum: [C];
Silver: [C];
Tungsten: 53;
Zinc: 60.
Year: 1981;
Barite: 40;
Copper: 6;
Fluorspar: 87;
Gold: 15;
Gypsum: 37;
Lead: 1;
Magnesium compounds: 2;
Magnesium metal: E;
Nickel[A]: 75;
Palladium: [C];
Perlite: [B];
Platinum: [C];
Silver: 53;
Tungsten: 50;
Zinc: 65.
Year: 1982;
Barite: 55;
Copper: 1;
Fluorspar: 90;
Gold: E;
Gypsum: 36;
Lead: 11;
Magnesium compounds: 4;
Magnesium metal: E;
Nickel[A]: 76;
Palladium: [C];
Perlite: [B];
Platinum: [C];
Silver: 55;
Tungsten: 42;
Zinc: 58.
Year: 1983;
Barite: 65;
Copper: 19;
Fluorspar: 90;
Gold: E;
Gypsum: 40;
Lead: 20;
Magnesium compounds: 8;
Magnesium metal: E;
Nickel[A]: 75;
Palladium: [C];
Perlite: 4;
Platinum: [C];
Silver: 59;
Tungsten: 52;
Zinc: 65.
Year: 1984;
Barite: 69;
Copper: 23;
Fluorspar: 90;
Gold: E;
Gypsum: 38;
Lead: 20;
Magnesium compounds: 13;
Magnesium metal: E;
Nickel[A]: 69;
Palladium: [C];
Perlite: 5;
Platinum: [C];
Silver: [C];
Tungsten: 70;
Zinc: 68.
Year: 1985;
Barite: 74;
Copper: 27;
Fluorspar: 90;
Gold: E;
Gypsum: 38;
Lead: 12;
Magnesium compounds: 21;
Magnesium metal: E;
Nickel[A]: 71;
Palladium: [C];
Perlite: 6;
Platinum: [C];
Silver: [C];
Tungsten: 68;
Zinc: 70.
Year: 1986;
Barite: 71;
Copper: 27;
Fluorspar: 86;
Gold: E;
Gypsum: 36;
Lead: 20;
Magnesium compounds: 25;
Magnesium metal: E;
Nickel[A]: 73;
Palladium: [C];
Perlite: 6;
Platinum: [C];
Silver: [C];
Tungsten: 70;
Zinc: 73.
Year: 1987;
Barite: 65;
Copper: 26;
Fluorspar: 90;
Gold: E;
Gypsum: 38;
Lead: 17;
Magnesium compounds: 24;
Magnesium metal: E;
Nickel[A]: 79;
Palladium: [C];
Perlite: 5;
Platinum: [C];
Silver: [C];
Tungsten: 79;
Zinc: 71.
Year: 1988;
Barite: 76;
Copper: 13;
Fluorspar: 90;
Gold: E;
Gypsum: 36;
Lead: 13;
Magnesium compounds: 22;
Magnesium metal: E;
Nickel[A]: 74;
Palladium: [C];
Perlite: 4;
Platinum: [C];
Silver: [C];
Tungsten: 86;
Zinc: 69.
Year: 1989;
Barite: 77;
Copper: 7;
Fluorspar: 91;
Gold: E;
Gypsum: 35;
Lead: 8;
Magnesium compounds: 22;
Magnesium metal: E;
Nickel[A]: 71;
Palladium: 84;
Perlite: 2;
Platinum: 94;
Silver: [C];
Tungsten: 84;
Zinc: 61.
Year: 1990;
Barite: 71;
Copper: 3;
Fluorspar: 89;
Gold: E;
Gypsum: 36;
Lead: 3;
Magnesium compounds: 15;
Magnesium metal: E;
Nickel[A]: 64;
Palladium: 81;
Perlite: 5;
Platinum: 92;
Silver: [C];
Tungsten: 81;
Zinc: 41.
Year: 1991;
Barite: 66;
Copper: E;
Fluorspar: 88;
Gold: E;
Gypsum: 31;
Lead: 6;
Magnesium compounds: 18;
Magnesium metal: E;
Nickel[A]: 61;
Palladium: 84;
Perlite: 5;
Platinum: 90;
Silver: [C];
Tungsten: 91;
Zinc: 24.
Year: 1992;
Barite: 52;
Copper: 2;
Fluorspar: 91;
Gold: E;
Gypsum: 31;
Lead: 10;
Magnesium compounds: 24;
Magnesium metal: E;
Nickel[A]: 59;
Palladium: 83;
Perlite: 6;
Platinum: 92;
Silver: [C];
Tungsten: 86;
Zinc: 30.
Year: 1993;
Barite: 72;
Copper: 7;
Fluorspar: 89;
Gold: E;
Gypsum: 31;
Lead: 15;
Magnesium compounds: 35;
Magnesium metal: E;
Nickel[A]: 63;
Palladium: 85;
Perlite: 7;
Platinum: 89;
Silver: [C];
Tungsten: 81;
Zinc: 45.
Year: 1994;
Barite: 64;
Copper: 13;
Fluorspar: 91;
Gold: E;
Gypsum: 31;
Lead: 19;
Magnesium compounds: 41;
Magnesium metal: E;
Nickel[A]: 64;
Palladium: 87;
Perlite: 6;
Platinum: 89;
Silver: [C];
Tungsten: 95;
Zinc: 35.
Year: 1995;
Barite: 65;
Copper: 7;
Fluorspar: 91;
Gold: E;
Gypsum: 30;
Lead: 17;
Magnesium compounds: 43;
Magnesium metal: E;
Nickel[A]: 60;
Palladium: 92;
Perlite: 6;
Platinum: 92;
Silver: [C];
Tungsten: 90;
Zinc: 35.
Year: 1996;
Barite: 70;
Copper: 14;
Fluorspar: 99;
Gold: E;
Gypsum: 29;
Lead: 17;
Magnesium compounds: 31;
Magnesium metal: E;
Nickel[A]: 59;
Palladium: 93;
Perlite: 11;
Platinum: 93;
Silver: [C];
Tungsten: 89;
Zinc: 57.
Year: 1997;
Barite: 76;
Copper: 13;
Fluorspar: 100;
Gold: E;
Gypsum: 28;
Lead: 14;
Magnesium compounds: 34;
Magnesium metal: 16;
Nickel[A]: 56;
Palladium: 90;
Perlite: 12;
Platinum: 91;
Silver: [C];
Tungsten: 84;
Zinc: 59.
Year: 1998;
Barite: 80;
Copper: 14;
Fluorspar: 100;
Gold: E;
Gypsum: 28;
Lead: 18;
Magnesium compounds: 44;
Magnesium metal: 25;
Nickel[A]: 64;
Palladium: 90;
Perlite: 14;
Platinum: 94;
Silver: 43;
Tungsten: 77;
Zinc: 58.
Year: 1999;
Barite: 66;
Copper: 27;
Fluorspar: 100;
Gold: E;
Gypsum: 25;
Lead: 20;
Magnesium compounds: 41;
Magnesium metal: 38;
Nickel[A]: 63;
Palladium: 92;
Perlite: 12;
Platinum: 96;
Silver: 39;
Tungsten: 65;
Zinc: 62.
Year: 2000;
Barite: 84;
Copper: 37;
Fluorspar: 100;
Gold: E;
Gypsum: 27;
Lead: 13;
Magnesium compounds: 48;
Magnesium metal: 43;
Nickel[A]: 55;
Palladium: 84;
Perlite: 17;
Platinum: 78;
Silver: 43;
Tungsten: 66;
Zinc: 60.
Year: 2001;
Barite: 86;
Copper: 22;
Fluorspar: 100;
Gold: E;
Gypsum: 27;
Lead: 8;
Magnesium compounds: 39;
Magnesium metal: 44;
Nickel[A]: 53;
Palladium: 87;
Perlite: 18;
Platinum: 90;
Silver: 49;
Tungsten: 64;
Zinc: 59.
Year: 2002;
Barite: 78;
Copper: 37;
Fluorspar: 100;
Gold: E;
Gypsum: 27;
Lead: E;
Magnesium compounds: 46;
Magnesium metal: 55;
Nickel[A]: 48;
Palladium: 82;
Perlite: 26;
Platinum: 91;
Silver: 60;
Tungsten: 69;
Zinc: 62.
Year: 2003;
Barite: 77;
Copper: 40;
Fluorspar: 100;
Gold: E;
Gypsum: 25;
Lead: E;
Magnesium compounds: 46;
Magnesium metal: 53;
Nickel[A]: 45;
Palladium: 82;
Perlite: 30;
Platinum: 91;
Silver: 65;
Tungsten: 63;
Zinc: 58.
Year: 2004;
Barite: 78;
Copper: 43;
Fluorspar: 100;
Gold: 8;
Gypsum: 28;
Lead: E;
Magnesium compounds: 52;
Magnesium metal: 61;
Nickel[A]: 49;
Palladium: 83;
Perlite: 28;
Platinum: 92;
Silver: 53;
Tungsten: 73;
Zinc: 60.
Year: 2005;
Barite: 84;
Copper: 42;
Fluorspar: 100;
Gold: 4;
Gypsum: 27;
Lead: E;
Magnesium compounds: 54;
Magnesium metal: 60;
Nickel[A]: 48;
Palladium: 84;
Perlite: 24;
Platinum: 93;
Silver: 61;
Tungsten: 68;
Zinc: 55.
Year: 2006;
Barite: 81;
Copper: 38;
Fluorspar: 100;
Gold: E;
Gypsum: 27;
Lead: E;
Magnesium compounds: 57;
Magnesium metal: 53;
Nickel[A]: 49;
Palladium: 75;
Perlite: 32;
Platinum: 90;
Silver: 65;
Tungsten: 68;
Zinc: 64.
Year: 2007[D];
Barite: 83;
Copper: 37;
Fluorspar: 100;
Gold: E;
Gypsum: 26;
Lead: E;
Magnesium compounds: 57;
Magnesium metal: 47;
Nickel[A]: 17;
Palladium: 73;
Perlite: 30;
Platinum: 94;
Silver: 59;
Tungsten: 70;
Zinc: 58.
Source: USGS.
Notes: E = Net exporter. Net import reliance shows the amount of net
imports of a particular mineral as a percentage of U.S. apparent
consumption. USGS calculates apparent consumption as production plus
imports minus exports with adjustments for changes in government and
industry stocks. For example, a net import reliance figure of 50 for a
particular mineral would indicate that 50 percent of the domestic
consumption of that mineral was supplied through net imports. A net
import reliance figure of E represents a negative percentage, which
indicates that the United States was a net exporter of that particular
mineral in that year.
[A] Import reliance figures for 1991 to 2002 were recalculated by USGS
to incorporate more complete data. Data for stainless steel scrap
consumption were included in the net import reliance calculation
beginning in 1980.
[B] No trade reported.
[C] Not available.
[D] Estimated.
[End of table]
[End of enclosure]
Enclosure IV: Hardrock Mining Data That Are Either Not Routinely
Collected or Not Consistently Maintained by Federal Agencies:
During the course of our work, we noted that BLM, the Forest Service,
and USGS either do not routinely collect or do not consistently
maintain data on the amount of hardrock minerals being produced on
federal land and the amount of hardrock minerals remaining and the
total acreage of federal lands withdrawn from hardrock mining
operations.
* According to officials with BLM and the Forest Service, they do not
have the authority to collect information from mine operators on the
amount of hardrock minerals produced on federal land, or the amount
remaining.
* USGS collects extensive data on hardrock mineral production through
its mineral industry surveys and reports these data in monthly,
quarterly, and annual reports. However, mine operators' participation
in these surveys is voluntary, these data do not include the hardrock
mineral uranium because it is also a fuel mineral, and USGS does not
collect land ownership data that would allow it to determine the amount
of hardrock mineral production on federal lands. As a result, it is not
possible to determine hardrock mineral production on federal lands from
the USGS data. In addition, although USGS does publish the total amount
of hardrock mineral production by mineral type, it is prohibited by law
from reporting individual mine production and other company proprietary
data unless the mine operator authorizes release of that information.
In some cases, mine operators that respond to these surveys report
consolidated data that covers production from several mines. Therefore,
information on hardrock mineral production for every mine is not
available to the public.
Some hardrock mineral production data are available from state sources
and through financial reports filed with the Securities and Exchange
Commission. However, these data may not always provide the level of
detail necessary to determine the amount of mineral production on
federal lands. BLM also does not centrally maintain data on the amount
of land withdrawn from hardrock mining operations. BLM documents lands
withdrawn from hardrock mining operations on its master title plats--
detailed paper maps maintained at BLM's state offices.[Footnote 10]
These maps contain land survey information on federal lands, including
ownership information, land use descriptions, and land status
descriptions. BLM's annual publication, Public Land Statistics, does
report the total number of acres withdrawn each year, but these data do
not account for instances in which multiple withdrawals may have
overlapping boundaries, which can result in double-counting the number
of acres withdrawn. Furthermore, the reason for withdrawing the land is
not always indicated, making it difficult to determine whether it was
withdrawn from mining or from other purposes.
[End of enclosure]
Enclosure V: GAO Contact and Staff Acknowledgments:
GAO Contact:
Robin M. Nazzaro, (202) 512-3841 or nazzaror@gao.gov:
Staff Acknowledgments:
In addition to the individual named above, Andrea Wamstad Brown
(Assistant Director), Elizabeth Beardsley, Casey L. Brown, Charles
Egan, David Martin, Kristen Sullivan Massey, Anne Stevens, Rebecca
Shea, and Carol Herrnstadt Shulman made key contributions to this
report.
[End of enclosure]
Footnotes:
[1] Under U.S. mining laws, minerals are classified as locatable,
leasable, or saleable. Locatable minerals include those minerals that
are not leasable or saleable, for example, copper, lead, zinc,
magnesium, gold, silver, and uranium. Only locatable minerals continue
to be "claimed" under the Mining Act. For the purposes of this report,
we use the term "hardrock minerals" as a synonym for "locatable
minerals." Leasable minerals include, for example, oil, gas, and coal.
The Mineral Leasing Act of 1920, 41 Stat. 437 (codified at 30 U.S.C. §
181) created a leasing system for coal, gas, oil and other fuels, and
chemical minerals. Saleable minerals include, for example, common sand,
stone, and gravel. In 1955, the Multiple Use Mining Act of 1955, 69
Stat. 367 (codified at 30 U.S.C. § 601) removed common varieties of
sand, stone, and gravel from development under the Mining Act.
[2] Mining operations consist of three primary stages--exploration,
mining, and mineral processing.
[3] The 11 other western states are Arizona, California, Colorado,
Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and
Wyoming.
[4] A severance tax is generally a tax or fee that a state imposes on
the extraction of natural resources, including hardrock minerals; a
mine license tax generally is a tax assessed in conjunction with a mine
license for the privilege of mining; and a resources excise tax
generally is a tax a state imposes on the extracting or processing of
natural resources.
[5] Nonfuel minerals generally include all minerals except those that
can be used for fuel, such as coal, oil, and gas. Most hardrock
minerals are also nonfuel minerals.
[6] USGS calculates apparent consumption as production plus imports
minus exports with adjustments for changes in government and industry
stocks.
[7] GAO, Hardrock Mining: Information on Abandoned Mines and Value and
Coverage of Financial Assurances on BLM Land, [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-08-574T] (Washington, D.C.: Mar.
12, 2008).
[8] These states are the principal hardrock mining states and contain
nearly all the land subject to the General Mining Act of 1872.
[9] The actual royalty amount owed for a particular mine may depend not
only on the type of royalty and its rate, but also such factors as the
processing requirements of the mineral, mineral markets, mine
efficiency, mine location relative to markets, and others.
[10] Some of the 12 BLM state offices manage BLM programs in more than
one state. For example, the BLM Montana state office manages BLM
programs in Montana, North Dakota, and South Dakota, and the BLM Oregon
state office manages BLM programs in Oregon and Washington.
[End of section]
GAO's Mission:
The Government Accountability Office, the audit, evaluation and
investigative arm of Congress, exists to support Congress in meeting
its constitutional responsibilities and to help improve the performance
and accountability of the federal government for the American people.
GAO examines the use of public funds; evaluates federal programs and
policies; and provides analyses, recommendations, and other assistance
to help Congress make informed oversight, policy, and funding
decisions. GAO's commitment to good government is reflected in its core
values of accountability, integrity, and reliability.
Obtaining Copies of GAO Reports and Testimony:
The fastest and easiest way to obtain copies of GAO documents at no
cost is through GAO's Web site [hyperlink, http://www.gao.gov]. Each
weekday, GAO posts newly released reports, testimony, and
correspondence on its Web site. To have GAO e-mail you a list of newly
posted products every afternoon, go to [hyperlink, http://www.gao.gov]
and select "E-mail Updates."
Order by Mail or Phone:
The first copy of each printed report is free. Additional copies are $2
each. A check or money order should be made out to the Superintendent
of Documents. GAO also accepts VISA and Mastercard. Orders for 100 or
more copies mailed to a single address are discounted 25 percent.
Orders should be sent to:
U.S. Government Accountability Office:
441 G Street NW, Room LM:
Washington, D.C. 20548:
To order by Phone:
Voice: (202) 512-6000:
TDD: (202) 512-2537:
Fax: (202) 512-6061:
To Report Fraud, Waste, and Abuse in Federal Programs:
Contact:
Web site: [hyperlink, http://www.gao.gov/fraudnet/fraudnet.htm]:
E-mail: fraudnet@gao.gov:
Automated answering system: (800) 424-5454 or (202) 512-7470:
Congressional Relations:
Ralph Dawn, Managing Director, dawnr@gao.gov:
(202) 512-4400:
U.S. Government Accountability Office:
441 G Street NW, Room 7125:
Washington, D.C. 20548:
Public Affairs:
Chuck Young, Managing Director, youngc1@gao.gov:
(202) 512-4800:
U.S. Government Accountability Office:
441 G Street NW, Room 7149:
Washington, D.C. 20548: