The U.S. Bureau of Land Management’s (BLM) issuance of a final rule to streamline the royalty rate reduction process for such minerals as phosphate, soda ash, potash, sodium, potassium, and sulfur is estimated to save up to $5 million in regulatory costs over the next decade and help American mining and processing companies better compete globally and support U.S. jobs.
BLM spokesman Derrick Henry told Green
Markets that the rule does not reduce royalties for any commodity or
company, but it does streamline the process by which mineral producers may
apply to reduce their royalty rates, rental fees, or minimum production
requirements by lessening information requirements for operators who apply.
“This includes not making operators
waste time by providing required information that the BLM already has on hand,”
Henry said.
The final rule also enables the BLM on
its own initiative to reduce rental fees, royalty rates, or minimum production
requirements if the bureau finds reduction is needed to develop a type of solid
minerals in an area or on an industry-wide basis.
Royalty rates are set at fair market
value for the minerals deposit as specified by the Minerals Leasing Act and
typically are higher than listed minimum rates. The BLM can provide royalty
rates for specific leases. Reduced rates are determined on a case-by-case basis
to ensure greatest economic recovery.
Henry said the final rule applies to operators who may apply for a royalty rate reduction, adding that all calculations are done on a case-by-case basis regardless of whether they pertain to phosphate, soda ash, potash, or sulfur. Each rate is calculated with commodity-specific parameters in mind in accordance with the Mineral Leasing Act of 1920. It does not pertain to coal or oil shale on federal lands.
“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 market for decades,” Interior Deputy Secretary Kate MacGregor said, noting that U.S. phosphate production has decreased from 45.5 million tons to 23 million tons since 1995, while China’s output has escalated from 27 million tons to 110 million tons based on USGS Mineral Commodity Summaries.
“The drafters of the Mineral Leasing Act clearly envisioned the need to adjust royalty rates to ensure the greater ultimate recovery of the resource. This rule restores our regulations to this statutory mandate so we may be more responsive to these changing global market dynamics,” said MacGregor.
Wyoming U.S. Senators John Barrasso and Mike Enzi and Wyoming U.S. Representative Liz Cheney all praised streamlining the royalty rate reduction process. Barrasso said the final rule sets the stage for Interior Secretary David Berhardt to lower the royalty rate on soda ash, “level the playing field against China,” and preserve high-paying soda ash jobs in Wyoming.
“This long-awaited rule brings us one
step closer to giving American soda ash producers the certainty they need to
stay competitive in the global market. For too long American producers have had
to battle unfair trade practices of China and other countries,” he said.
Enzi noted that soda ash is Wyoming’s top export and crucial to the state’s economy. The BLM’s final rule will enable producers to remain competitive while making the U.S. less reliant on countries like China for essential minerals.
Cheney said the Trump administration
has taken important action to reduce soda ash royalty rates so Wyoming and
other trona producers can better compete. “Wyoming has the largest deposit of
trona in the world, and this rule will allow Wyoming producers to expand their
operations and create much-needed jobs in our state,” she said.
