Recently, Congressman Kevin McCarthy (CA-23) and Congressman Paul Cook (CA-08) released the following statements in support of the Bureau of Land Management’s (BLM) proposed rule that will simplify the royalty rate setting process that could reduce royalties on certain non-energy solid leasable minerals, which are used in everyday products such as toothpaste, ink for printing, cosmetics, as well as fertilizers. Those minerals include phosphate, soda ash, sodium, potassium, potash, sulphur, and gilsonite. The proposed rule is expected to save up to $5 million in regulatory costs over the next ten years.
Within the BLM’s multiple-use commission, mineral development is an important land use, which provides economic opportunities and materials essential to maintain a high quality of life. In 2017, BLM contributed $13.4 billion to the economy and subsidized 48,000 jobs with the development of those types of minerals on public land.
In 2003, China’s production of soda ash surpassed the U.S. production, which was once the world’s leading producer.
“It is critical that U.S. royalty rate policies do not put domestic non-energy mineral producers at a competitive disadvantage with their foreign competitors in a global economy,” Congressman McCarthy said in a released statement. “I want to commend President Trump and Secretary Bernhardt for taking this action today. This rule would provide the BLM with the ability to quickly evaluate and respond to market dynamics to ensure that royalty rates on various minerals – including on soda ash of which a major amount is produced in the Mojave Desert – are not hampering responsible resource development and job creation.”
According to the press release by U.S. Department of Interior, “The proposed rule would streamline the process for lessees to seek – and/or for the BLM to provide – relief in the terms for rental fees, royalty rates and/or minimum production requirements associated with these minerals. In addition, the proposed rule would allow the BLM to reduce the rental fee, royalty rate or minimum production requirements on its own initiative if it finds that a reduction is necessary to develop a type of solid mineral on an area or on an industry-wide basis.”
This proposal would promote two important changes which could have an effect on the royalties and rental fees paid by the manufacturers of those types of minerals, other than coal and oil on federal lands. The first change would be to ease the process for manufacturers to apply for a reduction in their royalty rates, rental fees, or minimum production requirements by reducing the information requirements for contractors who apply. This would enable the BLM to ratify cutbacks in the rental fee, minimum and royalty production conditions on a lease-by-lease arrangement in return to an application from a manufacturer, if the company finds that a lease can’t be successfully managed under ongoing conditions in the market.
The press release also mentioned that in addition, the proposed rule would allow the BLM to reduce the rental fee, royalty rate or minimum production requirements on its own initiative if it finds that a reduction is necessary to develop a type of solid mineral on an area or on an industry-wide basis.
“Over the past decade, American soda ash producers have faced significant challenges from foreign, synthetic soda ash producers in China and Turkey. Sodium carbonate production is a $1.8 billion industry which provides hundreds of jobs to my constituents in Trona and thousands more to hard-working Americans across the nation,” Congressman Cook said in the statement. “The previous administration chose to triple the federal royalty rate for soda ash, severely impacting its production. More recently, Trona has been significantly damaged by major earthquakes, causing serious disruptions to local industry. This important rule sets the stage for rapid relief that will protect and expand mining jobs, strengthen our national security, and help local soda ash producers in my district recover from a devastating natural disaster. I thank the BLM and the administration for taking action to support this critical industry.”