$2.9 Billion in Mining Rights Sold by Government for $1,745

Decrying “billion-dollar rip-offs,” Interior Secretary Bruce Babbitt reluctantly turned over to a private company an estimated $2.9 billion worth of mining rights for $1,745.

The sale was required by a mining law enacted 123 years ago to promote development of the West.

“This process has gone from distasteful to obscene,” Babbitt declared Friday at a news conference where he dramatized his outrage by rolling onto the stage a large Christmas-wrapped box with “$2.9 billion” stamped on the side.

“In the spirit of the Christmas season, I’m delivering a gift to the mining industry,” Babbitt said before renewing his attack on the 1872 Mining Act, which requires the sale of federal land for mining for as little as $2.50 an acre.

An agreement signed Friday transferred ownership of 347 acres in the Coronado National Forest near Tucson to Asarco Inc. in exchange for $1,745, he said, or about $5 an acre.

Under the law, the company will be free to mine extensive reserves of copper and silver believed to be in the region. The law requires no royalty payment to the government on minerals that are extracted.

Dale Dixon, manager for development at Asarco Inc. said the purchase is not the deal Babbitt portrays. He said the company already has spent $15 million in exploratory drilling and may spend as much as $500 million for a full-fledged mining facility. If the mine is worth as much as is anticipated, operating costs would be more than $1 billion for the life of the mine, he said.

Nevertheless, Dixon said it is anticipated that a substantial amount of minerals, primarily copper, are beneath the 347 acres.