Danish Firm's Cheap Land Deal Could Reap $1 Billion
H. JOSEF HEBERT
Sep. 07, 1995
WASHINGTON (AP) _ A Danish company now owns 110 acres of land in Idaho for which it paid the government only $275. And the good deal could get much better because of an estimated $1 billion in minerals beneath the surface.
Interior Secretary Bruce Babbitt transferred title to the land at a news conference Wednesday, denouncing the sale but saying ``my hands are tied'' by the 124-year-old mining law that allowed the transaction.
The land was conveyed to Faxe Kalk Inc. of Denmark under an 1872 law whose original purpose was to help open the West. It requires the Interior Department to sell mining rights on federal land for as little as $2.50 to $5 an acre.
The law allows the new owner to take whatever hard-rock minerals are found without paying royalties to the government.
Some members of Congress have fought for more than a dozen years to require royalties and a fairer price for such land. But mining interests have lobbied vigorously against anything but modest changes, arguing that it would force mining companies to other countries, depriving the mining areas in the West of jobs.
Babbitt used the mandated transfer of the 110 acres in Clark County, Idaho, to Faxe Kalk to criticize the Republican-led Congress for refusing to pass mining reform.
``I find this process where my hands are tied by a law signed by Ulysses S. Grant increasingly distasteful,'' he declared with Grant's picture as a backdrop.
An estimated 14 million tons of high-quality travertine, a mineral used to whiten paper, worth $1 billion lies beneath the surface of the 110 acres, Interior officials said.
Jack Gerard, a spokesman for the Mineral Resources Alliance, a mining industry trade group, called Babbitt's news conference ``a publicity stunt'' that ignores efforts to reform the ancient mining law. Companies often invest tens of millions of dollars in mining claims and in finding and developing the minerals, the industry argues.
But Babbitt called the industry-supported mining reform bill ``cosmetic'' and criticized a Senate proposal that would require the Interior Department to speed up approval of mining claims already in the pipeline.
The Senate bill would require a 2 percent royalty on net profits on minerals taken under the 1872 law and pay market prices for the surface land. Babbitt said the 2 percent royalty is far below what private landowners charge for mineral rights.
Congress put a moratorium on issuing mining patents, or purchasing agreements, this fiscal year, but a number of applications that already were in the pipeline _ including the Faxe Kalk applications _ were exempted.