CHAPTER 3 ACQUISITION OF COAL PROSPECTING PERMITS AND LEASES ON PUBLIC DOMAIN AND ACQUIRED LANDS
| Jurisdiction | United States |
(Mar 1973)
ACQUISITION OF COAL PROSPECTING PERMITS AND LEASES ON PUBLIC DOMAIN AND ACQUIRED LANDS
Arch Mineral Corporation
St. Louis, Missouri
TABLE OF CONTENTS
Introduction
I. Coal Prospecting Permits
A. Lands Subject to Issuance of Permits
B. Permit Applications
1. Contents
2. Qualifications of Applicant
3. Filing and Filing Fees
4. Bond
5. Term
C. Issuance of Permits
D. Rights of Permittee
E. Cancellation
F. Assignments or Transfers
II. Preference Right Leases
A. Persons Entitled To
B. Application for Preference Right Lease
1. Contents
2. Filing and Filing Fees
3. Qualifications of Applicant
4. Term of Lease
5. Acreage Limitations
III. Competitive Leases
A. General
B. Acreage Limitations
C. Application for Lease
D. BLM Offer for Lease
1. Notice to Bidders
2. Public Auction
3. Award of Lease
E. Lease Rental and Royalties
F. Production Royalties
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G. Overriding Royalties
H. Bonds
I. Assignments or Transfers
J. Leasing of Additional Coal Deposits
K. Cancellation of Leases
IV. Cooperative Conservation Provisions
A. General
B. Types of Arrangements
C. Approval
D. Common-carrier Railroads
E. Royalties
F. Acreage Limitations
V. Current Policy Relating to Coal Prospecting Permits and Leases
VI. Acquisition of Water Rights
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INTRODUCTION
The acquisition of coal prospecting permits and leases on public domain and acquired lands is governed by the provisions of the Mineral Leasing Act of February 25, 1920, as amended1 and the Mineral Leasing Act for Acquired Lands of August 7, 1947,2 respectively, together with the regulations promulgated by the Bureau of Land Management, Department of the Interior, pursuant to such acts.3
An excellent discussion of this subject as it pertains to various minerals, including coal, is to be found in separate papers of Casey W. Vlautin and Jerry L. Haggard presented to the 1971 Federal Mineral Leasing Institute of the Rocky Mountain Mineral Law Foundation, pages 3-1 and 5-1, respectively. The instant paper is limited to a discussion of the acquisition of coal prospecting permits and leases with a comment or two at the end concerning the acquisition of water rights.
I. COAL PROSPECTING PERMITS.
A. Lands Subject to Issuance of Permits.
The nature of the lands involved must be unclaimed and undeveloped areas of mineral lands and mineral deposits in public domain and acquired lands or in public domain and acquired lands disposed of with the reservation of deposits to the United States.4
Excepted from lands subject to issuance of permits on the public domain are those located within national parks and monuments, Indian reservations, incorporated towns, cities and villages, naval petroleum and oil shale reserves
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and lands acquired under the Appalachian Forest Reserve Act (16 U.S.C. 513 et seq.).5
The following categories of acquired lands are also not subject to the issuance of prospecting permits: Lands acquired for the development of their mineral deposits, lands acquired by foreclosure or otherwise for resale, lands acquired as surplus under the Surplus Property Act of October 3, 1944 (50 U.S.C. 1611 et seq.), lands in incorporated towns, cities and villages, lands in national parks and monuments and lands set apart for military or naval purposes, including lands within the naval petroleum and oil shale reserves.6
B. Permit Applications.
1. Contents.
In order to obtain a coal prospecting permit, an application must be filed with the Bureau of Land Management ("BLM") on a form approved by the Director of that agency.7
An applicant for a coal prospecting permit must state his proposed plan and method for conducting prospecting or exploratory operations on the land and must state the estimated cost of carrying out these proposed prospecting operations, together with a statement as to the diligence with which these operations will be prosecuted.8
In regard to acquired lands, the applicant must also specify the dominant mineral or minerals for which the permit is sought.9
In addition, the applicant must describe with particularity the lands sought to be covered by the permit.10 An applicant may not include more than 5,120 acres in any permit and, except when special application
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is made and approved, generally he may not have more than 46,080 acres in total holdings in permit applications, permits and leases in any one state.11
2. Qualifications of Applicant.
a. General requirements.
Prospecting permits will only be issued to "qualified applicants".12 The applicant must show that his interest in coal permits, leases and other applications in the state, directly or indirectly, do not exceed in the aggregate the acreage limitation of 46,080 acres, referred to above.13
In addition, the applicant must be a citizen of the United States or an association of citizens organized under the laws of the United States or of any state thereof which are authorized to hold such interest by statute under which organized or by the instrument establishing the association, or a corporation organized under the laws of the United States or of any state thereof (including a company or a corporation operating a common carrier railroad).14
Each applicant must submit a statement to the effect that he will be the sole party in interest of the application or the permit if issued. Or, if he is not the sole party in interest then he must state the names of the other interested parties. Where there is more than one interested party, each party and the applicant must submit a statement of interest or all interested parties may submit a joint statement signed by them and by the applicant in which the nature and extent of the interest of each is stated and the nature of the agreement between them, if oral, is set forth and a copy of the agreement is attached if written.15
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b. Common carrier railroad.
Where a common carrier railroad is an applicant, the railroad must state that it needs the coal for which it seeks a permit for its own use for railroad purposes, that it operates main or branch lines in the state in which the lands involved are located, that the aggregate acreage in permits, leases and applications in which it is interested, directly or indirectly, does not exceed 10,240 acres and that it does not hold more than one permit or lease for each 200 miles of its railroad line served or to be served from such coal deposits exclusive of spurs or switches, and exclusive of branch lines built to connect the leased coal with the railroad, and also exclusive of parts of the railroad operated mainly by power produced otherwise than by steam.16
c. Association or partnership.
An association or partnership must submit a certified copy of its articles of association and a statement showing that it is authorized to hold leases, that a member or partner is authorized to act in behalf of the applicant and the names and addresses of all members owning or controlling more than 10% of the association or partnership. Any person owning or controlling more than 10% of the association or partnership must submit a separate statement setting forth his citizenship and holdings.17
d. Corporation.
A corporate applicant must submit a statement showing its state of incorporation, its authority to hold leases for mineral deposits, the names of its officers authorized to act in such matters in behalf of the corporation, the percentage of the corporate voting stock and all of the stock owned by aliens or those having addresses outside of the United States and the name, address, citizenship and acreage holdings of any stockholder owning or controlling 10% or more of the corporate stock of any class.18
3. Filing and Filing Fees.
Upon completion of the application and the attachment of all necessary statements of qualification,
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the application is filed in the BLM office for the state in which the land is located. Generally, five copies of the application must be filed except in the case of acquired lands in which seven copies must be filed.19
The filing fee is $10.00 for each application.20 Also, the first year's rental is remitted at the time of filing of the application.21 The first year's rental is computed at the rate of 25¢ per acre or fraction, but not less than $20.00 per year.22
4. Bond.
A permit bond must be furnished conditioned upon compliance with all of the terms of the prospecting permit. The amount of the bond is determined by the authorized BLM officer, not less than $1,000.23
5. Term.
Permits are for an initial term of two years.24 They are dated as of the first day of the month after issuance unless the applicant requests that the permit be dated the first day of the month of issuance.25
A permit may be extended by the BLM for a period not to exceed two years.26 However, application must be made for such extension in five copies in the BLM office for the state in which the land is located within 90 days prior to the expiration of the permit. Such application must include reasons why additional time is considered necessary to complete prospecting work and must show that the applicant's failure to perform diligent prospecting work was due to conditions beyond his control.27 Generally, the BLM now requires a certain amount of prospecting work during the initial permit term as a prerequisite to any extension.
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C. Issuance of Permits.
The BLM, upon receipt of an application, may accept it in whole or in part, in which case an executed copy of the permit will be mailed to the applicant at his address of record.28 On the other hand, the BLM may reject an application for any number of reasons, such as improper amount of filing fees submitted, improper signature or less than the required number of copies submitted. Any of such...
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