Land management bureau rule allows itself to issue mass royalty cuts for mining

Land management bureau rule allows itself to issue mass royalty cuts for mining
© Getty Images

The Trump administration on Monday finalized a rule allowing itself to issue areawide and industrywide reductions on fees that companies pay to the government in exchange for the ability to extract certain minerals from public lands. 

While these royalty rate cuts are typically granted by the Bureau of Land Management on a case-by-case basis when companies apply for them, the agency's new rule codifies its ability to issue reductions “on its own initiative.”

The rule applies to existing leases for mining of materials that are not energy producing minerals such as soda ash, potash, phosphate, sodium, potassium, sulphur and gilsonite on public lands. 


An agency analysis found that if it were to implement a 2 percentage point reduction in royalty rates for soda ash, a mineral that’s used in glass manufacturing and cleaning products, taxpayers could lose about $17.7 million annually.

The administration argues that its changes increase U.S. competitiveness, while opponents characterized it as a giveaway to industry. 

“The Trump Administration has had enough of foreign powers taking aim at our nation’s domestic mineral producers. Foreign competitors have been trying to corner the minerals markets for decades,” Interior Deputy Secretary Kate MacGregor said in a statement. 

“The drafters of the Mineral Leasing Act clearly envisioned the need to adjust royalty rates to ensure the greatest ultimate recovery of the resource," she added. "This rule restores our regulations to this statutory mandate so that we may be more responsive to these changing global market dynamics."

Meanwhile, Rep. Raúl Grijalva (D-Ariz.) argued that the move will help industries that are harmful to the environment at taxpayer expense. 

“This administration and its allies deliver constant lectures about why clean, renewable energy sources should compete without any assistance, and then when it’s time to give hundreds of millions of dollars away to old, destructive industries, it’s suddenly all about jobs,” Grijalva, chairman of the House Natural Resources Committee, said in a statement. 


“Trump and his Cabinet look at the federal treasury as a piggy bank to break open and toss around until someone takes it away from them, and we should expect more of these giveaways until they’re removed from office,” he added. 

The rule also seeks to make the application process for royalty rate cuts easier, with lease holders no longer having to provide information about how much of the mineral it mined in the year before it applied for the reduction. 

The agency argued that such changes would help streamline the application process and said it already gets this information from other documents provided by lessees.