The lease is awarded to the highest qualified bidder, on a bonus basis, subject to the right of the authorized officer to reject any and all bids. Approved, standardized forms for the leasing of phosphate, potassium, sodium, and sulfur deposits have been developed and are attached as an appendix to this section. Except for coal, competitive leases, like preference right leases, are issued for a term of 20 years and so long there after as the lessee complies with the terms of the lease, subject to readjustment at the end of each twenty-year period. By terms of the Leasing Act, sodium leases, both competitive and preference right, are issued with the preferential right to renew the lease for successive periods of 10 years; sulfur leases, by regulation, contain the preferential right to renew the lease for successive 20-year periods. The rentals and royalties payable under such leases are set out in Table 3. The annual, per acre rental for sodium and potassium leases is fixed at 25 cents the first year, 50 cents the second through fifth years, and $1 for each succeeding year. For phosphate leases the minimum annual rental per acre is 25 cents the first year, 50 cents the second and third years, and $1 for each succeeding year. The annual rental for sulfur leases is 50 cents per acre. Rentals are payable in advance, and are credited against royalties. TABLE 3.-RENTALS AND ROYALTIES FOR LEASABLE NONFUEL MINERALS Phosphate 25 cents per acre for 1st calendar year; 50 cents Not less than 5 percent of the gross value. Sodium... Potassium. per acre for 2d and 3d years; $1 per acre for 25 cents per acre for 1st calendar year; 50 cents do.. 50 cents per acre per year. Hardrock. By regulation, 25 cent to $1 per acre per year... Not less than 2 percent of the quantity or gross value of the output of the mineral compound and other related products at the point of shipment to market. Do. 5 percent of the quantity or gross value of the out- Each of the approved lease forms leaves blank the specific royalty amount to be charged. Under both the 1920 Leasing Act and the 1947 Acquired Lands Act there is a statutory royalty which establishes the minimum amount to be charged. For phosphate or phosphate rock and associated or related minerals, the royalty must be not less than 5% of the gross value of the output; in the case of sodium and potassium the royalty is to be not less than 2% of the quantity or gross value of the output of the mineral compounds and other related products at the point of shipment to market; the sulfur royalty under a preference right lease is fixed at 5% of the quantity or gross value of the output at the point of shipment to market but may be increased in competitive leases. The lease forms require the commencement of production within a prescribed time except when operations are interrupted by strikes, the elements, or casualties not attributable to the lessee. The time set in the sodium, potassium, and sulfur leases is the beginning of the sixth year; in phosphate leases it is the beginning of the fourth year. Failure to begin production within the prescribed period makes the lessee liable for payment of what is termed a "minimum royalty." This is established in the phosphate, sodium, and potassium leases as $1 per acre. The amount is left blank in the sulfur leases. Since rentals are credited against royalties, and since the rental requirements in phosphate, sodium, and potassium leases reach $1 per acre in the same year that the production requirement commences, the minimum royalty is effectively meaningless. There are two types of relief available to the lessee in the discretion of the Secretary of the Interior: (1) the waiver, suspension, or reduction of the rental, or minimum royalty, or the reduction of the royalty, when it is determined to be necessary to promote development or when it is determined that the lease cannot be successfully operated under the existing terms, and (2) the authorization or direction of the suspension of operations and production in the interest of conservation. ACREAGE LIMITATIONS There are two kinds of acreage limitations under the mineral leasing laws which should be distinguished: (1) a limitation on the acreage that may be in a permit or lease, and (2) a limitation on the total amount of acreage a person may hold either in the entire United States or in any one state. The existing limitations for the minerals considered in this section are shown in Table 4. Since acreage holdings under the 1920 Leasing Act are not chargeable against holdings under the 1947 Acquired Land Act, the amounts listed may possibly be doubled. Minerals Phosphate... Potassium...... Sulfur 2,560 No more than 20,480 acres in the United States. 2, 560 No more than 5,120 acres in any State except that the Secretary is authorized to lease up to 15,360 acres where necessary for economic mining. 2,560 No statutory limitations but by regulations. No more than 51,200 acres in permits in any 1 State. No more than 25,600 acres under lease in any 1 or more mining units except that an additional 2,500 acres may be held under certain conditions. 640 No more than 3 permits or leases in any 1 State. 2,560 By regulation, no more than 20,480 acres under permit or lease in the United States, of which not more than 10,240 acres may be held under lease, except that the Secretary is authorized to lease an additional 10,240 acres under certain conditions. The acreage limitations have been changed numerous times since the original passage of the 1920 Act. Originally, permits and leases for sodium and potassium and leases for phosphate could not exceed 2,560 acres. In the case of sodium and phosphate, no more than one permit or lease per state could be held. The potassium section, which was added to the Mineral Leasing Act in 1927, contained no limit on the number of such permits or leases which can be held. When leasing was extended to sulfur lands in Louisiana in 1926 the maximum permit and lease size was set at 640 acres and the number of leases or permits which could be held by any one person was limited to three per state. The current maximum sodium holdings per state by any person is 5,120 acres except that the Secretary is given the discretionary authority to allow an increase of such holdings up to 15,360 acres where necessary "to secure the economic mining" of leasable sodium compounds. Phosphate holdings in the entire United States are limited to 20.480 acres. Sulfur holdings are still limited to no more than three permits or leases per state. Maximum potassium holdings have been limited by regulation to no more than 51,200 acres per state. PHOSPHATE AND SODIUM USE PERMITS The holder of a phosphate permit or lease has the right, by statute, to use so much of the surface of unappropriated and unentered public lands not a part of the permit or lease and not on national forests land, not exceeding 80 acres in area, as may be determined by the Secretary to be necessary for extraction, removal, and treatment of the mineral deposits. The holder of a sodium permit or lease may be granted by the Secretary at his discretion the right to use up to 40 acres of unoccupied nonmineral public land for camp sites, refining works, and "other purposes connected with and necessary to the proper development and use of the deposits covered by the permit or lease." HARDROCK MINERAL LEASING ON CERTAIN ACQUIRED LANDS Acquired lands of the United States are not subject to location under the 1872 Mining Law. Beginning with the Weeks Act in 1911, a series of laws were passed which provided for the purchase of forest lands, lands connected with the rural rehabilitation program, and lands to be retired as submarginal. The Department of Agriculture was given jurisdiction over these lands including authority to issue mineral leases. Reorganization Plan No. 3 of 1946 transferred this leasing authority to the Department of the Interior subject to the right of the Department of Agriculture to impose limitations where necessary to protect the surface uses for which the lands were primarily acquired. By regulation, hardrock minerals on these lands are subject to the prospecting permit-preference right lease system and the competitive lease system. Prospecting permits and competitive leases are limited to a maximum size of 2,560 acres. Total holdings of hardrock permits and leases may not exceed 20,480 acres of which not more than 10,240 acres may be held under lease. Provision is made whereby the Secretary may authorize the holding of an additional 10,240 acres upon a satisfactory showing that such additional acreage is "necessary to promote the orderly development of mineral resources and does not result in undue control of the mineral to be mined." In no event is a lessee to hold more than 10,240 acres of leased land for the mining of any "dominant single mineral," nor may any person hold more than 20,480 acres under permit and lease in any one state. Prospecting permits are issued for a term of two years which may be extended, in the Secretary's discretion, for an additional two years if certain conditions are met. The dominant mineral or minerals for which the permit is sought must be specified. A permittee who discovers any valuable deposits of (hardrock) minerals shall be entitled to a preference right lease for the mineral covering all or any part of the lands covered by the permit. Annual rental for preference right leases is 25¢ to $1 per acre. A minimum rental of $20 must accompany the application for a preference right lease. Lands containing valuable mineral deposits may be leased competitively under a general statutory provision. The lease term is to be for a period not to exceed 20 years. There is a right of renewal for successive periods, not exceeding 10 years each, under such reasonable terms and conditions as the Secretary of the Interior may prescribe, including the revision of or imposition of stipulations for the protection of the surface of the land as may be required by the agency having jurisdiction. Other terms and conditions of the lease, including royalties, are to be established on an individual case basis. There is an ambiguous section which provides that "if minerals other than that specified in the issued lease should be discovered and mined by the lessee, an applicable royalty rate will be established by the lessor for such mineral." Although no operating or producing requirements are established for hardrock leases by the regulations, there is a special provision whereby the lessee may be granted a suspension of such requirements upon a showing of such "need". A rental in lieu of royalty of not less than $1 per acre is to be paid annually during the period of suspension. In addition, the Secretary is authorized to suspend all operating and producing requirements and waive, suspend, or reduce the rental or minimum royalty payments "in the interest of conservation." Finally, two places in the regulations authorize the Secretary to approve operating or development contracts or processing or milling arrangements. In one case it refers to such contracts and arrangements "made by one or more lessees with one or more persons, associations, or corporations, to justify operations in a large scale for the discovery, development, production or transportation of ores" and in the other case it authorizes approval of such contracts or arrangements "for the conservation of natural products or whenever in his discretion, the public convenience or necessity may require it or the interests of the United States may be best served thereby." SPECIAL LEASING LEGISLATION Special laws have been passed from time to time which established mineral leasing systems. Generally these laws are designed to handle a rather narrow problem-often dealing only with certain specified minerals on particular lands. For example, the Act of June 8, 1926 authorizes the Secretary of the Interior to lease gold, silver, or quick-silver deposits on lands embraced within any land claim confirmed at that time or subsequently by the decree of the Court of Private Land Claims, which claim did not convey the mineral rights to the grantee by the terms of the grant. The Act of October 8, 1964 authorizes the Secretary of the Interior to provide for mineral leasing in the Lake Mead National Recreation Area. A list of the special Acts can be found at 43 C.F.R. 3500.0-3 (c). Regulations under these acts are in Part 3560 of 43 C.F.R. Sec. 21. 21a. 22 23. 24. 25. 26. 27. 28. UNITED STATES CODE TITLE 30.-MINERAL LANDS AND MINING Chapter 2.-MINERAL LANDS AND REGULATIONS IN GENERAL Mineral lands reserved. National mining and minerals policy; definition of minerals; execution of policy under other authorized programs; report to Congress. Lands open to purchase by citizens. Length of claims on veins or lodes. Proof of citizenship. Affidavit of citizenship. Locators' rights of possession and enjoyment. Mining tunnels; right to possession of veins on line with; abandonment of right. Mining district regulations by miners; location, recordation, and amount of work; marking of location on ground; records; annual labor or improvements on claims pending issue of patent; coowner's succession in interest upon delinquency in contributing proportion of expenditures; tunnel as lode expenditure. 28-1. Inclusion of certain surveys in labor requirements of mining claims; conditions and restrictions. 28-2. Same; definitions. 28a. 28b. Annual assessment work on mining claims; suspension of requirement. Annual assessment work on mining claims; temporary deferment; conditions. 28c. Same; length and termination of deferment. 28d. Same; performance of deferred work. 28e. 29. 30. 31.. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. Same; recordation of deferment. Patents; procurement procedure; filing: application under oath, plat and field notes, Existing rights. Description of vein claims on surveyed and unsurveyed lands; monuments on ground to govern conflicting calls. Placer claims; entry and proceedings for patent under provisions applicable to vein or lode claims; conforming entry to legal subdivisions and surveys; limitation of claims; homestead entry of segregated agricultural land. Same; subdivisions of 10-acre tracts; maximum of placer locations; homestead claims of agricultural lands; sale of improvements. Same; proceedings for patent where boundaries contain vein or lode; application; statement including vein or lode; issuance of patent acreage payments for vein or lode and placer claim; costs of proceedings; knowledge affecting construction of application and scope of patent. Evidence of possession and work to establish right to patent. Surveyors of mining claims. Verification of affidavits. Intersecting or crossing veins. Patents for nonmineral lands: application, survey, notice, acreage limitation, pay- (a) Vein or lode and mill site owners eligible. Conditions of sale by local legislature. 44,45. Omitted. 46. Additional land districts and officers. 47. 48. 49. 49a. 49b. 49c. 49d. 49e. 49f. 50. Impairment of rights or interests in certain mining property. Lands in Michigan, Wisconsin, and Minnesota; sale and disposal as public lands. Mining laws of United States extended to Alaska; exploration and mining for Mining laws relating to placer claims extended to Alaska. Recording notices of location of Alaskan mining claims. Miners' regulations for recording notices in Alaska; certain records legalized. Fees of recorders in Alaska for filing proofs of work and improvements. |