CHAPTER 13 MINERAL EXPLORATION AGREEMENTS ON NATIVE LANDS FROM THE NATIVE CORPORATION VIEWPOINT—HARD MINERALS

• Jurisdiction: United States

Alaska Mineral Development
(Sep 1978)
CHAPTER 13
MINERAL EXPLORATION AGREEMENTS ON NATIVE LANDS FROM THE NATIVE CORPORATION VIEWPOINT—HARD MINERALS
Ted P. Stockmar
Holme Roberts & Owen
Denver, Colorado

INTRODUCTION

The purpose of this paper is to discuss agreements between Native Regional Corporations formed under the Alaska Native Claims Settlement Act of December 18, 1971 (ANCSA),¹ and other parties, covering the exploration and development of the corporation's hard-rock mineral properties.

Such a discussion will necessarily require examination also of the need for a Regional Corporation to have or develop a mineral philosophy, the part its mineral philosophy plays in the land selection process, the extent of the corporation's involvement in activities conducted under its mineral exploration agreements and its relationship with its related Village Corporations and with other Regional Corporations.

In an earlier paper, Mr. Byron I. Mallott, President of the Alaska Federation of Natives will have discussed the organization, function and objectives of both Village and Regional Corporations, land selection rights, revenue sharing, overselection, land trades and status of title transfer. The reader is assumed to have the background provided by that paper.

NATIVE REGIONAL CORPORATION MINERAL PHILOSOPHIES

In one sense, a Native Regional Corporation is no different from any other owner of large land holdings, e.g., Union Pacific Railroad Company, Hudson's Bay Company, Zaire, the State of Nevada or International Paper Company, which slowly or suddenly becomes aware that its mineral potential is of high interest to those whose business it is to explore for and develop energy and materials resources. Such a company can dash or blunder into a pattern of dealing with its lands on an ad hoc basis as opportunities arise or it can make a careful analysis of its assets and corporate objectives and design a mineral philosophy to deal with any situation which may arise. Fortunately, most of them do some of each and, for better or for worse, end up with an approach to dealing with their mineral potential which is somewhere between those extremes.

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In another sense, each Native Regional Corporation is quite different from other large land holders in that its shareholders, directors, officers and much of its personnel, at least until 1992, will be Natives who, under ANCSA, have become part of an alliance of those who more or less speak the same tongue, who have been given large amounts of land and money in common and some of whom have been given an opportunity, through the vehicles of the Village and Regional Corporation, to enter the main stream of Alaskan industry and enterprise by their own efforts.

Because of significant differences in heritage, religious beliefs and societal structures as well as substantial differences in the mineral potential of the lands available to each Regional Corporation, it would be extraordinary indeed if any two Regional Corporations should have or develop identical attitudes and philosophies with respect to the development of their lands for minerals.

Inasmuch as the management of a Regional Corporation is essentially founded on political power and influence, it would be surprising also if its mineral philosophy did not reflect the views and attitudes of the shareholders as an electorate far more directly and effectively than is the case in a conventional corporation.

Identified below are the major specific concerns each Regional Corporation has or may wish to consider in the development of its mineral philosophy and in the negotiation of mineral leases and agreements:

Maintenance of Historical Life Styles

Notwithstanding the practical impossibility of achieving such an end, many Natives prefer to continue their historic life styles and patterns, even at subsistence levels, and would like it very much if all non-Natives would go away and take their encroaching civilization with them. To accommodate to some extent to this preservationist view and to permit its realization by at least some of its shareholders, it was patently necessary for Regional Corporations, in making land selections under ANCSA, to protect and preserve hunting and fishing areas and to select timber lands in those areas where good stands of good timber were scarce and to select other lands having special values to maintenance of historic life patterns.

At the same time, recognition of the value to a Regional Corporation of selecting also lands of potential use for other purposes, including mineral development, has been fundamental to arriving at reasonably balanced land holdings. Obviously, lands where multiple uses are possible have been given great weight in the selection process.

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Concern for the preservation of virgin lands and historic life styles does not end with the land selection process. It carries through and permeates discussions and negotiations of mineral exploration agreements. The mineral explorer who does not achieve and maintain a clear perception of the depth of the Native concern for preservation is in for a rude awakening.

Environmental Protection

Closely allied with the concern for preservation of historic life styles, but quite independent of and different from it, is the Native concern for the protection of the environment. Although the author's experience has been limited to serving one Regional Corporation, there is perceived to exist a regard for the land and its flora and fauna which is partly religious, partly emotional and partly arising from a deep-seated reluctance to interfere with nature or, more particularly, to permit such interference by alien forces such as mining companies.

Whatever the basis, the preservation and protection of the environment is sure to be an important part of any Regional Corporation's mineral philosophy and is sure to be part of mineral exploration and development agreements.

Relationship to Village Corporations

ANCSA provides for the creation of Village Corporations which become the owners of surface rights in lands within the boundaries of and surrounding Native Villages. In most cases the Regional Corporation becomes the owner of the subsurface estate in the Village lands.

At least three elements affect the relationship between Village Corporations and Regional Corporations. First, there exists an intimate relationship between the directors and officers of Regional Corporations and the inhabitants of the Villages. In most cases the officers and directors are from a Village and usually have close family ties in several of them. This close personal relationship ensures that Regional Corporation activities which may affect a Village will be carefully scrutinized. This is true not only with respect to mineral development, but as to the utilization of adjoining surface rights as well. Second, Section 14(f) of ANCSA provides that the right of the Regional Corporation to explore, develop, or remove minerals from the subsurface estate in the lands within the boundaries of any Native Village shall be subject to the consent of the Village Corporation. Third, ANCSA establishes financial relationships between Village and Regional Corporations which, simply because they exist,

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must be...