For those that are interested this is a very good article that has been written about minerals and mining law by Jeanine Feriancek of Holland and Hart LLD
To many people, the laws governing exploration for minerals on public domain lands and leasing of federal minerals may seem arcane. The principal means of acquiring mining rights on federal lands is location of mining claims under the Mining Law of 1872. That statute, enacted when the West was being settled and federal policy encouraged disposal of public domain lands, still governs the location of metallic minerals such as gold, silver, tin and copper, as well as other minerals including uranium, building stone other than common varieties, and even diamonds. Mining rights relating to fossil fuels such as coal, fertilizer minerals such as phosphate and potash, and chemical minerals such as sodium and sulphur on federal lands are acquired under the Mineral Leasing Act of 1920. This article summarizes some of the significant provisions of those laws, touches upon leasing of minerals on state lands, and discusses private ownership of minerals and obtaining mining rights on private lands. Other topics covered include surface control, mine development, mining agreements and title examination of mining property.
Mining Law of 1872
Location of mining claims under the Mining Law of 1872, 30 U.S.C. §§ 22-42, is a self-initiation system under which a person physically stakes an unpatented mining claim on public land that is open to location, posts a location notice and monuments the boundaries of the claim in compliance with federal laws and regulations and with state location laws, and files notice of that location in the county records and with the Bureau of Land Management (BLM). Mining claims can be located on land as to which the surface was patented into private ownership under the Stockraising Homestead Act of 1916, 43 U.S.C. §299, but the mining claimant cannot injure, damage or destroy the surface owner's permanent improvements and must pay for damage to crops caused by prospecting. Discovery of a valuable mineral deposit, as defined under federal law, is essential to the validity of an unpatented mining claim and is required on each mining claim individually. The location is made as a lode claim for mineral deposits found as veins or rock in place, or as a placer claim for other deposits. While the maximum size and shape of lode claims and placer claims are established by statute, there are no limits on the number of claims one person may locate or own. The Mining Law also contains provision for acquiring five-acre claims of non-mineral land for millsite purposes. A mining operation typically is comprised of many mining claims.
The holder of a valid unpatented mining claim has possessory title to the land covered thereby, which gives the claimant exclusive possession of the surface for mining purposes and the right to mine and remove minerals from the claim. Legal title to land encompassed by an unpatented mining claim remains in the United States, and the government can contest the validity of a mining claim. The Mining Law requires the performance of annual assessment work for each claim, and subsequent to enactment of the Federal Land Policy and Management Act of 1976, 43 U.S.C. §1201 et seq. , mining claims are invalidated if evidence of assessment work is not timely filed with BLM. However, in 1993 Congress enacted a provision requiring payment of $100 per year claim maintenance fee in lieu of performing assessment work, subject to an exception for small miners having less than ten claims. No royalty is paid to the United States with respect to minerals mined and sold from a mining claim.
The Mining Law of 1872 provides a procedure for a qualified claimant to obtain a mineral patent ( i.e., fee simple title to the mining claim) under certain conditions. It has become much more difficult in recent years to obtain a patent. Beginning in 1994, Congress imposed a funding moratorium on the processing of mineral patent applications which had not reached a designated stage in the patent process at the time the moratorium went into effect. Additionally, Congress has considered several bills in recent years to repeal the Mining Law or to amend it to provide for the payment of royalties to the United States and to eliminate or substantially limit the patent provisions of the law.
Mining claims are conveyed by deed, or leased by the claimant to the company seeking to develop the property. Such a deed or lease (or memorandum of it) needs to be recorded in the real property records of the county where the property is located, and evidence of such transfer needs to be filed with BLM. It is not unusual for the grantor or lessor to reserve a royalty, which as to precious metals often is expressed as a percentage of net smelter returns.
Mineral Leasing Act of 1920
Under the Mineral Leasing Act of 1920, as amended, 30 U.S.C. § 181 et seq. , the Bureau of Land Management grants leases for development of deposits of coal, phosphate, potash, sodium, sulphur and other leasable minerals on public domain lands and on lands having federal reserved minerals. The Mineral Leasing Act establishes qualifications for mineral lessees, sets out maximum limits on the number of acres of a particular mineral that can be held by a lessee, and prohibits alien ownership of leases except though stock ownership in a corporation. While all federal mineral leases require the payment of annual rentals and production royalties to the United States, the terms and conditions of the leases vary. For instance, phosphate and potassium leases have indeterminate terms subject to readjustment of the lease terms and conditions at the end of each 20 years, while sodium and sulphur leases have an initial term of 20 years subject to the lessee's preference right to renew the lease at the end of the initial term and every 10 years thereafter. BLM regulations for most types of leases set out minimum rentals and royalties, thus allowing BLM to increase the rentals and royalties periodically for new leases and when existing leases are readjusted or renewed. Assignments and subleases of federal mineral leases must be approved by BLM.
The statutory and regulatory requirements relating to federal coal leases differ somewhat from those relating to other solid minerals. The coal leasing provisions under the Mineral Leasing Act were substantially amended when Congress adopted the Federal Coal Leasing Amendments Act of 1976. The amendments were enacted in response to the small percentage of federal coal leases that were in production at that time and to the widespread speculation in federal coal leases that was occurring as investors waited for their undeveloped leases to increase in value. Federal coal is leased competitively, in infrequent lease sales held by BLM. Prior to a sale, BLM determines the fair market value and maximum economic recovery of the tracts offered for lease. No bids lower than the fair market value are accepted. Coal leases provide for the payment of annual rentals, and of a royalty of not less than 12% of the value of coal removed from a surface mine of 8% of the value of coal removed from an underground mine. The terms of a federal coal lease are subject to readjustment at the end of the first 20-year period of the lease and, if the lease is extended, at the end of each 10-year period thereafter. The 1976 coal lease amendments require lessees to have deposits in production in ten years or forfeit the leases and lose eligibility for additional leases. Coal leases can be combined into "logical mining units" for more efficient development. Coal mining operations (on both federal and private lands) are regulated by the Office of Surface Mining or federally approved state OSM offices under the Surface Mining Control and Reclamation Act of 1977, 30 U.S.C. §1201 et seq.
Leasing of Minerals on State Lands
States follow differing procedures for granting mining leases covering state school lands and other state-owned lands, and for approval of transfer of such leases. Information relating to royalties payable under state mineral leases, assignment forms and fees relating to transfers of interest in state mineral leases can be obtained by review of state regulations and consulting the applicable state agency.
Part 2 Tomorrow
Nick
Labels: blm, bureau of land management, General Services Administration, government, mining claim, New Mexico, nick fleming, tda-6, tesoro del alma