But the bonding requirements mean more companies are forced to abandon a project, or post cash or a cash equivalent to meet federal requirements, according to the industry.

Environmental groups oppose easing the current rules, saying companies routinely underestimate cleanup costs and that taxpayers should not have to pay for restoration.

Hard-rock mining can pollute water and soil with heavy metals like cadmium, lead and arsenic that are released when minerals are extracted.

Chuck Jeannes, senior vice president with Glamis Gold Ltd, said the lack of bonds is an "absolute impediment" to the mining business. Jeannes was among several industry officials who testified at a House of Representatives Resources subcommittee hearing on the availability of bonds to meet federal mining requirements.

In the past decade, the mining industry has seen a jump in the scope of projects being regulated and the amount posted to satisfy bonding requirements. During the 1990s, underwriters were quick to issue reclamation, or surety bonds, but some have filed for bankruptcy and others have been reluctant to take on the risk with the economy struggling.

Unable to secure funding, companies are left scrambling to cover the expected bonding amount by paying cash upfront or offering assets as collateral.

"This takes cash directly out of the pool of money for exploration and development," said Gerald Schlief, a senior vice president with ATP Oil & Gas Corp. . "In some cases, the net effect has also prohibited operations because of the inability to obtain securities."

The Bush administration last year approved most parts of a Clinton-era rule that tightened hard-rock mining regulations, including a provision requiring mining companies to post bonds for future cleanups.

Environmental groups and some Democrats oppose easing the rules, saying that would shift the costs from mining companies to U.S. taxpayers.

"The stock market has been melting down due to multiple cases of corporate irresponsibility, Enron and Worldcom," said Rep. Jay Inslee, a Washington Democrat.

"Now we are talking about a request to shift responsibilities off corporations that may act irresponsibility onto the shoulders of taxpayers," he added. "To me it's stunning."

The Mineral Policy Center, an environmental group, said the mining industry has its own problems of corporate accountability and public disclosure. The group estimated that the total cost of cleanup in the hard-rock mining industry is under-estimated by as much as $10 billion.

"Is this risk being fully and accurately reported to investors, insurers and regulators?" Jim Kuipers of the Mineral Policy Center demanded of the subcommittee.

The green group opposes an industry proposal to switch from bonds to "corporate guarantees," contending that would make it easier for mining companies to sidestep future costs.

The Surety Association of America, which represents nearly 600 companies that issue bonds, said it is difficult to forecast potential liabilities such as damage to local water supplies 40 years after the project is completed.

The mining industry is responsible for pollution at some 500,000 abandoned sites, including 30 mines the Environmental Protection Agency ranks among the most contaminated Superfund sites in the nation, according to the Mineral Policy Center.

The Interior Department, which oversees surface and ocean resource exploration, has formed a task force to examine the severity of the bonding requirements. The agency said it will submit a recommendation this autumn.