By Ernest Scheyder
(Reuters) -U.S. Senator Joe Manchin has promised to block a proposed royalty for minerals extracted on federal land from advancing in the U.S. Senate's version of the hotly debated reconciliation package, a senate staffer said on Thursday.
Manchin, a West Virginia Democrat and chair of the Senator's Energy and Natural Resources committee, promised U.S. Senator Catherine Cortez Masto, a Nevada Democrat, that the royalty proposal would not be included in the Senate's final reconciliation language, according to Cortez Masto's office.
Manchin's office declined to comment.
The pledge to block the royalty proposal in committee and the full Senate is the latest example of Manchin's newfound role as a legislative powerbroker in the evenly divided chamber.
Last month, the U.S. House of Representative's Natural Resources Committee added language https://www.reuters.com/business/sustainable-business/us-miners-decry-mineral-royalty-plan-floated-congress-2021-09-16/#:~:text=The%20House%20of%20Representatives%20Natural,and%204%25%20on%20new%20ones to the proposed $3.5 trillion reconciliation spending measure to set an 8% gross royalty on existing mines and 4% on new ones. Supporters project that the measure, which would also set a 7-cent fee for every ton of rock moved, would raise about $2 billion over 10 years.
It was designed to be one of the most-substantial changes to the law that has governed U.S. mining since 1872, which did not set royalties in order to encourage development of the western United States.
Not every politician in the region, which has vast stretches of federal lands, was happy that the royalty plan could be blocked. "Every day that goes by without a hard rock royalty in place means more toxic metals in our western watersheds," said Senator Martin Heinrich, a New Mexico Democrat. Royalties would support the cleanup of thousands of abandoned mines, Heinrich said.
Mining companies support only a slight tweak in the law, but environmental groups have long urged charging the industry a fee to extract minerals on taxpayer-owned land.
Nevada produces more gold and silver than any other state and has lithium projects under development from Lithium Americas (NYSE:LAC) Corp, ioneer Ltd and others. Cortez Masto, who is up for re-election in 2022, has been one of few Democrats supporting the mining industry's position.
Tensions are rising in the United States over how best to procure minerals needed to produce renewable energy technologies. President Joe Biden has yet to take a public stance on the issue, though privately he has signaled plans to rely on allies for metals needed in electric vehicles, Reuters reported https://www.reuters.com/article/usa-biden-mining-idCNL2N2NC32W earlier this year.