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CRS Report: IB89130 - Mining of Federal Lands Part 1
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IB89130: Mining on Federal Lands
Marc Humphries and Carol Hardy Vincent
Resources, Science, and Industry Division
May 3, 2001
CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Background
The Claim-Patent System
Major Mining Legislation After the 1872 Mining Law
Analysis
Claim-Patent System: Pros and Cons
Past Amendment Proposals
The Clinton Administration's Call to Eliminate Subsidies
Fair Market Value
Environmental Protection
Federal Land Withdrawals
Legislative Activity
The Mill Site Debate
Surface Impacts of Hardrock Mining on Federal Lands
Patent Moratorium
Reform Proposals
Footnotes
SUMMARY
The General Mining Law of 1872 is one of the major statutes that direct the federal government's land management policy. The law grants free access to individuals and corporations to prospect for minerals in public domain lands, and allows them, upon making a discovery, to stake (or "locate") a claim on that deposit. A claim gives the holder the right to develop the minerals and may be "patented" to convey full title to the claimant. A continuing issue is whether this law should be reformed, and if so, how to balance mineral development with competing land uses.
The right to enter the public domain and freely prospect for and develop minerals is the feature of the claim-patent system that draws the most vigorous support from the mining industry. Critics consider the claim-patent system a giveaway of publicly owned resources because of the small amounts paid to maintain a claim and to obtain a patent.
In addition to the general issue of whether to reform the General Mining Law, two recent issues also have been controversial and might be addressed by the 107th Congress. One involves mining millsites. At issue is whether the General Mining Law limits claimants to one millsite of no more than five acres per mining claim, or whether multiple millsites are allowed. In 1997, the Solicitor of the Department of the Interior ruled that only one millsite of no more than five acres is allowed per claim. The 106th Congress provided a two-year exemption from the Solicitor's opinion for mines with approved plans of operation, operations with plans submitted prior to the Solicitor's opinion, and patent applications grandfathered as part of the 1995 mining patent moratorium (P.L. 106-113).
A second issue involves the Clinton Administration's revisions to the regulations governing hardrock mining operations on federal lands (43 CFR 3809), which took effect January 20, 2001. The new regulations authorize BLM to deny mining operations if they would result in "substantial irreparable harm" to significant resources that cannot be mitigated, and make mining operators more responsible for reclaiming mined land. On March 23, 2001, the Bush Administration proposed suspending the new regulations and reinstating the previous ones, until a review of the new rules is completed and a decision is made regarding them. The suspension is intended to allow BLM to address legal and policy concerns that have been raised before implementing a new regulatory program. The BLM has requested public comment on its proposal through May 7, 2001, and anticipates publishing a final rule in July. The current regulations remain in effect until the Bush Administration publishes a final rule.
The 106th Congress prohibited the Secretary of the Interior from using funds to revise hardrock mining regulations except to make changes "not inconsistent with" law and a report of the National Research Council (P.L. 106-113, P.L. 106-291). The Clinton Administration asserted that the revisions were "not inconsistent" with the report, but that interpretation has been controversial.
The 107th Congress also may consider extending the moratorium on the issuance of mining patents, whereby new mining patents generally will not be issued, but grandfathered applications will be processed. Most recently, Congress retained the mining patent moratorium for one year (P.L. 106-291).
MOST RECENT DEVELOPMENTS
On March 23, 2001, the Bush Administration proposed suspending the regulations governing hardrock mining operations on federal lands (43 CFR 3809) that took effect on January 20, 2001, and reinstating the old rule. The suspension is intended to allow BLM to address legal and policy concerns that have been raised before implementing a new regulatory program. The Bush Administration anticipates publishing a final rule in July.
On March 15, 2001, a bill was introduced (H.R. 1085) to make permanent provisions of law requiring an annual maintenance fee of $100, and a one-time location fee of $25, for each unpatented mining claim, mill or tunnel site located under the general mining laws. The measure also makes permanent provisions of law establishing a moratorium on mining patents (to take title to public lands) for mining or mill site claims except those filed by September 30, 1994, and meeting certain requirements. On January 22, 2001, a bill was reintroduced (S. 115) to disallow the percentage depletion allowance for hardrock mines located on lands covered by the general mining laws or patented under these laws.
Another issue that remains controversial stems from the 1997 ruling by the Department of the Interior's Solicitor limiting each mining claim to one 5-acre millsite. Congress enacted language (P.L. 106-113) to provide a two-year exemption for mines with approved plans of operation, operations with plans submitted prior to the Solicitor's opinion, and patent applications grandfathered as part of the 1995 mining patent moratorium.
BACKGROUND AND ANALYSIS
Background
The purposes of the 1872 Mining Law were to promote mineral exploration and development on federal lands in the western United States, offer an opportunity to obtain a clear title to mines already being worked, and help settle the West. The Mining Law granted free access to individuals and corporations to prospect for minerals on open public domain lands, and allowed them, upon making a discovery, to stake (or "locate") a claim on the deposit. A valid claim entitles the holder to develop the minerals. The 1872 Mining Law originally applied to all minerals except coal.
Public domain lands are those retained under federal ownership since their original acquisition by treaty, cession, or purchase as part of the general territory of the United States, including lands that passed out of but reverted back to federal ownership. "Acquired" lands -- those obtained from a state or a private owner through purchase, gift, or condemnation for particular federal purposes rather than as general territory of the United States -- are not covered by the 1872 Law. Some public lands may be withdrawn or closed to mineral entry.
The 1872 Mining Law was one of the primary forces behind the development of mineral resources in the West, along with the industries and services that supported mineral production. Major hardrock minerals developed in the West include copper, silver, gold, lead, molybdenum, and uranium. During the 19th century, major mining districts for silver and gold were developed under the Mining Law in Colorado, California, and Nevada. Early in the 20th century, there were major developments of porphyry copper in Arizona. Large molybdenum and tungsten deposits in Colorado were also developed. The Mining Law continues to provide the structure for much of the Western mineral development on public domain lands. Western mining, although not as extensive as it once was, is still a major economic activity, and a high percentage of hardrock mining is on public lands.
The Claim-Patent System
After a prospector has conducted exploration work on public domain land, he or she may locate a claim to an area believed to contain a valuable mineral. Under legislation initially enacted by the 102nd Congress (P.L. 102-381), claimants must pay an annual maintenance fee of $100 per claim to hold a claim on public land. This superseded a previous requirement that $100 of annual development work be conducted per claim. Most recently, the Omnibus Consolidated Appropriations Act for FY1999 (P.L. 105-277) extended the maintenance fee through FY2001 at $100 per claim or site. There is also a $25 location fee for first-time locators to locate and record a claim, as initially required by P.L. 103-66 and subsequently extended through FY2001.
For FY2000, the maintenance and location fees generated an estimated $23.9 million in revenue, according to the Bureau of Land Management (BLM). This reflects a significant decrease from $30.7 million for FY1995, the first year that both fees were collected. It is a more sizeable drop from the peak of $35.9 million for FY1997, largely due to a decline in gold and copper prices since that time.
Once a claimed mineral deposit is determined to be economically recoverable, and at least $500 of development work has been performed, the claim holder may file a patent application to obtain title to surface and mineral rights. A patent is not necessary to develop the minerals within a claim. Beginning January 3, 1989, a fee of $250 per application plus $50 per claim within each application has been required. If the application is approved, the claimant may purchase surface and mineral rights at a rate of $2.50 per acre for placer claims and $5 per acre for lode claims. A placer deposit is an alluvial deposit of valuable minerals usually in sand or gravel; a lode or vein deposit is of a valuable mineral consisting of quartz or other rock in place with definite boundaries. (Source: Dictionary of Mining, Mineral and Related Terms, Bureau of Mines, 1968.) A placer claim is usually limited to 20 acres but a lode claim may be slightly greater than 20 acres. While these per-acre fees were substantial when the Mining Law was enacted, claimed land and minerals now far exceeds these amounts in value.
The following provisions currently apply to claims:
There is no limit on the number of claims a person can locate.
There is no requirement that mineral production ever commence. (1)
Mineral production can take place without a patent or revenue payments to the federal government.
Claims can be held indefinitely with or without mineral production, subject to challenge if not developed.
Most of the current mining activity and mineral claims under the Mining Law are in Nevada, Arizona, California, Montana, and Wyoming. Of a total of 235,948 mining claims as of the end of FY2000, approximately 45% were in Nevada alone and another nearly 35% are in those other four states. According to the Bureau of Land Management (BLM), the number of claims declined from about 1.2 million claims in FY1989 to 294,678 for FY1993. Many claims were dropped as a result of provisions of law charging a $100 per-claim annual maintenance fee to hold a claim. The number of claims subsequently rose to 324,651 in FY1997, reflecting the relative strength of the gold and copper industries. The number of claims has fallen to a low of 235,948 for FY2000, reflecting a decline in the gold and copper industries and, according to a BLM representative, changes in public land policy that significantly lengthened the time it takes in practice to get permission to mine.
Only a small percentage of claims are ever patented, totaling about 3.3 million acres from 1867 through 2000. This represents approximately 1.5% of all public lands patented; most public lands have been patented under homestead entries, statehood grants, railroad grants, and other non-mineral public land laws. It is not required to patent a claim to mine a deposit, and a great deal of mining activity is currently taking place on unpatented claims. However, patenting a claim gives the holder legal title to both the surface and the minerals.
IB89130: Mining on Federal Lands
Marc Humphries and Carol Hardy Vincent
Resources, Science, and Industry Division
May 3, 2001
CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Background
The Claim-Patent System
Major Mining Legislation After the 1872 Mining Law
Analysis
Claim-Patent System: Pros and Cons
Past Amendment Proposals
The Clinton Administration's Call to Eliminate Subsidies
Fair Market Value
Environmental Protection
Federal Land Withdrawals
Legislative Activity
The Mill Site Debate
Surface Impacts of Hardrock Mining on Federal Lands
Patent Moratorium
Reform Proposals
Footnotes
SUMMARY
The General Mining Law of 1872 is one of the major statutes that direct the federal government's land management policy. The law grants free access to individuals and corporations to prospect for minerals in public domain lands, and allows them, upon making a discovery, to stake (or "locate") a claim on that deposit. A claim gives the holder the right to develop the minerals and may be "patented" to convey full title to the claimant. A continuing issue is whether this law should be reformed, and if so, how to balance mineral development with competing land uses.
The right to enter the public domain and freely prospect for and develop minerals is the feature of the claim-patent system that draws the most vigorous support from the mining industry. Critics consider the claim-patent system a giveaway of publicly owned resources because of the small amounts paid to maintain a claim and to obtain a patent.
In addition to the general issue of whether to reform the General Mining Law, two recent issues also have been controversial and might be addressed by the 107th Congress. One involves mining millsites. At issue is whether the General Mining Law limits claimants to one millsite of no more than five acres per mining claim, or whether multiple millsites are allowed. In 1997, the Solicitor of the Department of the Interior ruled that only one millsite of no more than five acres is allowed per claim. The 106th Congress provided a two-year exemption from the Solicitor's opinion for mines with approved plans of operation, operations with plans submitted prior to the Solicitor's opinion, and patent applications grandfathered as part of the 1995 mining patent moratorium (P.L. 106-113).
A second issue involves the Clinton Administration's revisions to the regulations governing hardrock mining operations on federal lands (43 CFR 3809), which took effect January 20, 2001. The new regulations authorize BLM to deny mining operations if they would result in "substantial irreparable harm" to significant resources that cannot be mitigated, and make mining operators more responsible for reclaiming mined land. On March 23, 2001, the Bush Administration proposed suspending the new regulations and reinstating the previous ones, until a review of the new rules is completed and a decision is made regarding them. The suspension is intended to allow BLM to address legal and policy concerns that have been raised before implementing a new regulatory program. The BLM has requested public comment on its proposal through May 7, 2001, and anticipates publishing a final rule in July. The current regulations remain in effect until the Bush Administration publishes a final rule.
The 106th Congress prohibited the Secretary of the Interior from using funds to revise hardrock mining regulations except to make changes "not inconsistent with" law and a report of the National Research Council (P.L. 106-113, P.L. 106-291). The Clinton Administration asserted that the revisions were "not inconsistent" with the report, but that interpretation has been controversial.
The 107th Congress also may consider extending the moratorium on the issuance of mining patents, whereby new mining patents generally will not be issued, but grandfathered applications will be processed. Most recently, Congress retained the mining patent moratorium for one year (P.L. 106-291).
MOST RECENT DEVELOPMENTS
On March 23, 2001, the Bush Administration proposed suspending the regulations governing hardrock mining operations on federal lands (43 CFR 3809) that took effect on January 20, 2001, and reinstating the old rule. The suspension is intended to allow BLM to address legal and policy concerns that have been raised before implementing a new regulatory program. The Bush Administration anticipates publishing a final rule in July.
On March 15, 2001, a bill was introduced (H.R. 1085) to make permanent provisions of law requiring an annual maintenance fee of $100, and a one-time location fee of $25, for each unpatented mining claim, mill or tunnel site located under the general mining laws. The measure also makes permanent provisions of law establishing a moratorium on mining patents (to take title to public lands) for mining or mill site claims except those filed by September 30, 1994, and meeting certain requirements. On January 22, 2001, a bill was reintroduced (S. 115) to disallow the percentage depletion allowance for hardrock mines located on lands covered by the general mining laws or patented under these laws.
Another issue that remains controversial stems from the 1997 ruling by the Department of the Interior's Solicitor limiting each mining claim to one 5-acre millsite. Congress enacted language (P.L. 106-113) to provide a two-year exemption for mines with approved plans of operation, operations with plans submitted prior to the Solicitor's opinion, and patent applications grandfathered as part of the 1995 mining patent moratorium.
BACKGROUND AND ANALYSIS
Background
The purposes of the 1872 Mining Law were to promote mineral exploration and development on federal lands in the western United States, offer an opportunity to obtain a clear title to mines already being worked, and help settle the West. The Mining Law granted free access to individuals and corporations to prospect for minerals on open public domain lands, and allowed them, upon making a discovery, to stake (or "locate") a claim on the deposit. A valid claim entitles the holder to develop the minerals. The 1872 Mining Law originally applied to all minerals except coal.
Public domain lands are those retained under federal ownership since their original acquisition by treaty, cession, or purchase as part of the general territory of the United States, including lands that passed out of but reverted back to federal ownership. "Acquired" lands -- those obtained from a state or a private owner through purchase, gift, or condemnation for particular federal purposes rather than as general territory of the United States -- are not covered by the 1872 Law. Some public lands may be withdrawn or closed to mineral entry.
The 1872 Mining Law was one of the primary forces behind the development of mineral resources in the West, along with the industries and services that supported mineral production. Major hardrock minerals developed in the West include copper, silver, gold, lead, molybdenum, and uranium. During the 19th century, major mining districts for silver and gold were developed under the Mining Law in Colorado, California, and Nevada. Early in the 20th century, there were major developments of porphyry copper in Arizona. Large molybdenum and tungsten deposits in Colorado were also developed. The Mining Law continues to provide the structure for much of the Western mineral development on public domain lands. Western mining, although not as extensive as it once was, is still a major economic activity, and a high percentage of hardrock mining is on public lands.
The Claim-Patent System
After a prospector has conducted exploration work on public domain land, he or she may locate a claim to an area believed to contain a valuable mineral. Under legislation initially enacted by the 102nd Congress (P.L. 102-381), claimants must pay an annual maintenance fee of $100 per claim to hold a claim on public land. This superseded a previous requirement that $100 of annual development work be conducted per claim. Most recently, the Omnibus Consolidated Appropriations Act for FY1999 (P.L. 105-277) extended the maintenance fee through FY2001 at $100 per claim or site. There is also a $25 location fee for first-time locators to locate and record a claim, as initially required by P.L. 103-66 and subsequently extended through FY2001.
For FY2000, the maintenance and location fees generated an estimated $23.9 million in revenue, according to the Bureau of Land Management (BLM). This reflects a significant decrease from $30.7 million for FY1995, the first year that both fees were collected. It is a more sizeable drop from the peak of $35.9 million for FY1997, largely due to a decline in gold and copper prices since that time.
Once a claimed mineral deposit is determined to be economically recoverable, and at least $500 of development work has been performed, the claim holder may file a patent application to obtain title to surface and mineral rights. A patent is not necessary to develop the minerals within a claim. Beginning January 3, 1989, a fee of $250 per application plus $50 per claim within each application has been required. If the application is approved, the claimant may purchase surface and mineral rights at a rate of $2.50 per acre for placer claims and $5 per acre for lode claims. A placer deposit is an alluvial deposit of valuable minerals usually in sand or gravel; a lode or vein deposit is of a valuable mineral consisting of quartz or other rock in place with definite boundaries. (Source: Dictionary of Mining, Mineral and Related Terms, Bureau of Mines, 1968.) A placer claim is usually limited to 20 acres but a lode claim may be slightly greater than 20 acres. While these per-acre fees were substantial when the Mining Law was enacted, claimed land and minerals now far exceeds these amounts in value.
The following provisions currently apply to claims:
There is no limit on the number of claims a person can locate.
There is no requirement that mineral production ever commence. (1)
Mineral production can take place without a patent or revenue payments to the federal government.
Claims can be held indefinitely with or without mineral production, subject to challenge if not developed.
Most of the current mining activity and mineral claims under the Mining Law are in Nevada, Arizona, California, Montana, and Wyoming. Of a total of 235,948 mining claims as of the end of FY2000, approximately 45% were in Nevada alone and another nearly 35% are in those other four states. According to the Bureau of Land Management (BLM), the number of claims declined from about 1.2 million claims in FY1989 to 294,678 for FY1993. Many claims were dropped as a result of provisions of law charging a $100 per-claim annual maintenance fee to hold a claim. The number of claims subsequently rose to 324,651 in FY1997, reflecting the relative strength of the gold and copper industries. The number of claims has fallen to a low of 235,948 for FY2000, reflecting a decline in the gold and copper industries and, according to a BLM representative, changes in public land policy that significantly lengthened the time it takes in practice to get permission to mine.
Only a small percentage of claims are ever patented, totaling about 3.3 million acres from 1867 through 2000. This represents approximately 1.5% of all public lands patented; most public lands have been patented under homestead entries, statehood grants, railroad grants, and other non-mineral public land laws. It is not required to patent a claim to mine a deposit, and a great deal of mining activity is currently taking place on unpatented claims. However, patenting a claim gives the holder legal title to both the surface and the minerals.
Labels: blm, bureau of land management, gold, government, mining claim, New Mexico, nick fleming, tda-6, tesoro del alma, treasure
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9:37 AM
