By Ernest Scheyder

(Reuters) – U.S. mining companies are blasting proposals in Congress that would set royalties for , lithium and other minerals extracted from federal land, with executives saying the measures would hurt domestic production of the building blocks for solar panels, electric vehicles and other green technologies.

Last week, language was added to the $3.5 trillion reconciliation spending bill by the House of Representatives Natural Resources Committee. It would establish an 8% gross royalty for existing mines and 4 % on new mines. For every ton, there would also be 7c per rock.

The change would represent one of most significant changes to U.S. mining law since 1872. This could bring in about $2B over 10 years to federal coffers.

While the full House may reverse the decision of the committee, the U.S. Senate will likely decide the fate of the legislation.

Rich Nolan of the National Mining Association (an industry trade association) stated that “The race to electrify the economy and electric cars requires metals and mining and that must be incentivized and not stalled.”

Tensions in America are increasing over the best way to obtain the minerals necessary to help green their economy. Reuters earlier reported that while President Joe Biden has not yet made a public statement about the matter, he indicated privately plans to rely heavily on allies in order to procure EV-metals.

In 1872, there was no provision for royalty payments to promote development on more than 350,000,000 acres of land in the west United States. It should be left as it is, according to miners. Or modified only slightly. Since long, environmentalists insist that the law be changed to mandate the extracting of mineral on public land.

Biden’s aim to produce 35% U.S. solar electricity by 2030, up from the current 3%, would not be possible without new mines. Photovoltaic cells are made from silver.

Phil Baker is the chief executive at Hecla Mining Co., America’s largest silver producer. Baker stated that he would close any mines that are approved by the proposal.

According to miners, they pay high sales, income and other taxes. The miners warned against the proposal of a royalty on gross profits, which would deter investment in times when commodities prices rise or shorten the life span of mines when they fall.

NMA members were not able to agree on a percentage royalty. The NMA stated that it prefers a net royalty to gross profit.

Todd Malan, Talon Metals Corp’s Minnesota-based developer of Tamareck Nickel Deposit said that new taxes at the beginning of the supply chain would “undermine the EV batteries goals that have been established by the president and Congress” and make U.S. policies look confused. For EV batteries, nickel is used.

The proposed new royalty rates would affect so-called hard rock mining, but are part of a series of other proposed fee hikes on oil, coal and extraction. Rio Tinto Ltd (NYSE:) Ltd would be prevented from building the Resolution copper mine in Arizona, according to language approved by the committee.

NMA indicated that they support the idea of creating a $3B reclamation fund for abandoned mines.

Lithium Americas Corp. (NYSE:) Corp., the company that is building Thacker Pass on Nevada federal land, stated it would work with Congress in order to establish a “reasonable royalties for operating on public lands”. Lithium, a crucial component in EV batteries, is also important.

Tim Crowley from Lithium Americas stated that “the current proposal will impair U.S. competitionness when demand for lithium has soared and domestic production is just beginning to respond,”.