FEDERAL MINING LAW REVISION IN THE 21ST CENTURY
| Jurisdiction | United States |
A Lawyer's Commentary
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The often proposed, but never adopted, "Reform of the General Mining Law" is back on the congressional agenda in 2005. An industry Task Force being formed by Senate Minority Leader Harry Reid (D-NV) and Congressman Jim Gibbons (R-NV) foretells serious review of this recently dormant issue.
Revision of the current federal law, euphemistically called the "1872 Mining Law" to emphasize its antiquity rather than its current context, stems now from two separate sources: (1) a stubborn effort by anti-mining interests to renew the reform attempt that died in the late 1990s when Congress refused to enact new legislation as proposed during the Clinton Administration, and (2) a realization which has grown that now might be the time to update the law that authorizes the location of mining claims on federal "public domain lands" found only in the western United States.
Recognizing that the federal mining law is antequated, there are a number of ideas and considerations that ought to be weighed by lawmakers and decision makers in the mining industry. The issues discussed in this commentary need to be widely considered by all those who would be impacted by intended legislation. The goal should be to craft updated revisions that will allow the federal mining law to function for another 100 years. The following observations, comments and recommendations are the author's alone, based upon fifty years working with that law.
The crucial part of the existing mining law that needs to be preserved at all costs is the "self initiation" aspect of mining claims. Private initiative is important, and except to the extent government may decide to close particular lands to mineral entry for wilderness or other important values prior to a mining claim being located and perfected, bureaucracy should not play any role in deciding where or whether mineral exploration and mining should occur. A valuable mineral deposit found on federal lands at private risk and expense should lead inevitably to its being mined, as soon as it is deemed economically feasible by the claim owner.
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The term "mining law" is a misnomer - the existing federal mining law has virtually nothing to do with "mining" and relates almost exclusively to the search for unknown mineral deposits on open federal lands and prospector-initiated acquisition of title to and possession of discovered valuable mining lands. Mining claims are restricted to the mostly uninhabited and undeveloped "vacant" regions of the western United States (i.e., most of Alaska, the Rocky Mountains and deserts of the Far West), so the impact of federal mining law is strictly regional. A more suitable name would be "Western Mining Claim Law."
Since the 1970s the federal land management agencies that control the vast holdings of vacant federal lands in this western region (the Interior Department's Bureau of Land Management "BLM" and the Agriculture Department's Forest Service "USFS") have relied upon so-called "organic laws" enacted by Congress as a basis to issue regulations to govern exploration and mining operations on unpatented mining claims under the existing mining law, particularly permission to disturb the surface and the need to reclaim all such disturbance. The over-reaching scope of these federal regulations, and certain administrative tribunal interpretations of private rights under the basic mining law, are the main factors behind the mining industry's desire to "update" the existing legislation.
If the federal mining law is to be "updated" in the 21st Century, what issues should be addressed by a revision? Consider the following:
1. Payment of a Production Royalty1 for mining on unpatented mining claims.
This issue, in turn, involves consideration of (a) the rate of a reasonable royalty, considering that a very wide range of minerals are involved in "mining," (b) how the royalty should be paid (e.g., cash or in-kind), and (c) who should receive the royalty.
2. A Diligence Requirement for holding unpatented mining claims, and how many mining claims a person (or company) can hold. Until 1993 a mining claim was held and maintained by on-site "work" (labor or improvements) each year; after 1993 a mining
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claim is held and maintained by an annual cash payment to the BLM (even for mining claims on USFS lands).2
3. Eliminate the confusing and often meaningless distinction between "lode" mining claims and "placer" mining claims, perhaps also the non-mineral millsite claim and the little-used tunnel site claim. Perhaps a new form of one-size-fits-all mining claim, combining the best aspects of former mining claims, should be devised for use henceforth. Query: What size, and how described?
4. Eliminate the current prohibition against patenting mining claims (the "patent moratorium"), and provide that the statutory purchase price for a mineral patent include the appraised "fair market value" (FMV) of the surface estate conveyed by the patent (but not, of course, the discovered and privately developed "mineral value"). If a patent owner has paid FMV for the surface of his patent, why should the government not have to pay FMV to get the reclaimed surface back after mining has exhausted the deposit?
5. Eliminate the prerequisite for a "BLM-approved Mineral Survey" for patenting lode mining claims (the most numerous kind). If a Mineral Survey is indeed deemed needed, it should come after the patent application is filed and accepted. As the current situation stands, it is virtually impossible to obtain a BLM-approved Mineral Survey in less than several years, preventing patent applications even being filed on a current basis.
6. Create a temporary presumption of "discovery" on new mining claims to enable a new claim owner to conduct exploration and mining operations to firmly establish valid rights based on an actual discovery. The legislative presumption of a "discovery" prior to location of a mining claim doesn't work when unknown and buried deposits are involved, as is most often the case in modern times.
7. Assure suitable access across federal lands for exploration purposes, mine development and mining (as contrasted with only limited light duty access). Such access is a sore point that needs to be defined and confirmed.
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8. Overhaul the Interior Department's policy-driven "administrative court" system that interprets and decides rights under the mining law. Under the existing system Interior officials (beholden to the politically appointed Secretary in power) play the multiple roles of policeman, prosecutor, judge, jury and appellate court. As the situation now stands, it takes years for a claim owner to get his case into federal court for an independent review of clear statutory rights. Even after such delay, the case may be decided before federal judges who tend to defer to the lengthy federal administrative processing that precedes judicial review, rather than interpreting the statutory law itself.
9. Re-think whether a national set of environmental standards should be stated in the revised mining law -- a law which applies only to remote federal lands. A revised mining law ought to authorize a national Mining Claim Bonding Pool as a needed solution to the dilemma of furnishing a reclamation bond.
To appreciate these nine issues one must understand the past history of exploration and mining (mining claims) on the vast, but dwindling, federal public lands. In other words, how did we get to where we are today?
BACKGROUND HISTORY OF FEDERAL MINING LAW
The current federal mining law has a reputation of having been set in stone by an ancient Congress, but in reality it has a dynamic and interesting background, ranging from its laissez faire origins in the 19th Century to extremely restrictive interpretation and enforcement in the late 20th Century. There is a need to restore some balance in the 21st Century.
Prior to the Civil War (1861-1865) the federal government followed a policy of selling known valuable mineral lands owned by the government. The later policy of leasing mineral deposits (i.e., temporary "sales" for the limited purpose of extracting the deposit) was an untried concept. The famous lead deposits of Illinois, Iowa and Missouri, the copper deposits of northern Michigan and, ultimately, the iron deposits of Michigan and Minnesota, thus passed into private ownership under this pre-Civil War sales concept.
The famous "1849 Gold Rush" to California, and subsequent rushes to other mineral-bearing parts of the American West, generated a type of appropriation closely reassembling the "Land Claim" of the trans-Appalachian Northwest Territories and Kentucky, appropriately called in
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the Far West the "Mining Claim." This practice traces its historic origins back to medieval Europe, where mineral extraction was a mysterious activity to the general population, akin to alchemy, but in America it clearly grew out of the time-honored practice of "staking your claim" to a valuable piece of land one aspired to own. For approximately 17 years, from 1849 to 1866, there simply was no federal statutory law authorizing "mining claims," and the detailed practices that came into existence during this time were developed at the local "Mining District" level established by the miners themselves. Self-initiated "mining claims" proliferated and personal mining fortunes were based upon extra-legal actions in a region devoid of established government. It is considered an outstanding example of "self government."
In 1866, after Congress could turn its attention to post-Civil War concerns, a lawyer from western Nevada who had prospered from the western Mining Boom and been elected to the Senate, pressed Congress to officially sanction the...
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