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10 Apr, 24

What are locatable, leasable and saleable minerals?


Written by: Bruno Hegner

The General Mining Law of 1872 allows an individual to locate mining claims on land owned by the Federal government. The interest is “self-initiated”; no act of the Federal government is necessary to establish the right. The locator has a valid interest in such land, as long as

  • the land was open to location;
  • the location is properly made;
  • a discovery of a valuable mineral deposit is made; and
  • the claim is properly maintained through annual filings and/or payments.

Although the Bureau of Land Management may challenge the validity of a mining claim for failure to comply with various statutory requirements, it has no say in whether a claim is located in the first instance. The owner of a valid mining claim thus has the exclusive right to use and possess the property for mining purposes and to develop and sell the mining products from the same free of any royalty to the Federal government. A mining claim can be sold, mortgaged, inherited and otherwise treated like other real property interests.

Locatable Minerals

The minerals that are currently subject to the General Mining Law are commonly referred to as “hard rock minerals,” or “locatable minerals.” The current list of locatable minerals includes metallic minerals (gold, silver, cinnabar, lead, copper, tin, zinc, nickel, uranium, etc.), nonmetallic minerals (fluorspar, mica, certain limestones and gypsum, tantalum, heavy minerals in placer form, and gemstones) and certain “uncommon variety minerals”, which are valuable because of their unique characteristics.

Uncommon variety of minerals that are available for location include block pumice, limestone suitable for the production of cement, metallurgical grade limestone, chemical grade limestone, limestone suitable as a soil additive and gypsum, which have all been excluded from material sales and are instead available for location under the 1872 Law.

Salable Minerals

The Materials Disposals Act of 1947, as amended (the “MDA”), removed common varieties of mineral materials from acquisition by “location” under the General Mining Law. The MDA authorizes the Secretary of the Interior and the Secretary of Agriculture to dispose of “common varieties” of sand, stone, gravel, pumice, pumicite, cinders, and clay on public lands of the United States. Common varieties of minerals subject to materials sales are those that do not possess any specific property giving them a distinct or special value.

The classification of materials available for mineral sales is not absolute because it is dependent upon the characteristics of each individual deposit and use of the materials once extracted. It is not unusual for conflicts to arise over whether a mineral deposit is a common variety and disposable under the MDA or an uncommon variety locatable under the General Mining Law. To resolve these disputes, courts have generally followed a five-part test to determine whether a deposit is a common or uncommon variety:

  1. Comparison of the mineral deposit in question with other deposits of the same mineral generally;
  2. Whether the mineral deposit in question has any unique qualities;
  3. Whether the unique quality gives the deposit a distinct or special value;
  4. Whether the use of the materials is dependent upon the material’s unique qualities; and,
  5. Whether the material commands a higher price due to its unique qualities.

Minerals available for materials sales thus include sand, stone, gravel, pumice, cinders, clay and other widely occurring and available substances that are generally used for construction, agriculture, animal husbandry, abrasion, landscaping and similar uses. Materials sales can cover both minerals and vegetative substances such as moss and peat. Certain materials have specifically been excluded from materials sales, however, through case law and statutory enactments because of their unique characteristics and value. Specifically, block pumice, limestone suitable for the production of cement, metallurgical grade limestone, chemical-grade limestone, limestone suitable as a soil additive and gypsum have all been excluded from material sales and are instead available for location under the General Mining Law.

Leasable Minerals

The Mineral Leasing Act of 1920, as amended (the “MLA”), also removed certain minerals from acquisition by “location” under the 1872 Law. Those minerals included oil and gas, oil shale, coal, geothermal resources, potash, sodium, native asphalt located in certain geographic regions, solid and semisolid bitumen, bituminous rock, phosphate, chlorides, sulfates, carbonates, borates, silicates or nitrates of potassium or sodium and related products, and sulphur on public lands in Louisiana and New Mexico. Those minerals are now commonly referred to as “leasable minerals.” The MLA governs the acquisition of leasable minerals separately and apart from the General Mining Law after the date of the enactment of the MLA.

The MLA differs from the General Mining Law in several significant ways. First, there is no self-initiating “right to mine” leasable minerals. Unlike the 1872 Law, which declares the public lands open to mineral development, the MLA requires potential developers to obtain a lease from the Federal government through a competitive bidding process before prospecting or drilling operations may commence. The government retains the discretion to determine which, if any, bid to accept. The most important distinction between the two statutes is that minerals extracted pursuant to “locations” under the General Mining Law may be mined without payment of a royalty to the U.S., whereas a royalty is required for minerals leased pursuant to the MLA.

Multiple Mineral Development

The modern economy is driving the development of numerous lithium, uranium, potash and specialty metals projects throughout the U.S. An important consideration for the developer on Federal land is whether the target mineral deposit is subject to location under the 1872 Law or is it only available under Federal leasing programs. If the mineral is locatable, does it occur with leasable minerals? Is it possible to locate a claim on lands previously leased under the Mineral Leasing Act of 1920?

It is possible for unpatented mining claims and mineral leases to cover the same land. Congress made certain non-metalliferous minerals exclusively leasable but made no provision for disposing of other minerals that might be discovered on leased land. Conversely, there was no attempt to amend the mining laws to provide that mining claims must contain reservations of the various minerals subject to leasing. It was inevitable that the two systems – location and leasing – would eventually conflict. That the collision did not occur until the early 1950s is in itself remarkable. Uranium exploration was a legacy of World War II. Uranium ores discovered on the Colorado Plateau in the late 1940s were generally found in a type of sedimentary deposit that was also potentially valuable for oil and gas.

An effort to resolve the conflict resulted in the Multiple Mineral Development Act of 1954 (“MMDA”). The statute reflects the contemporary policy of the Federal government to foster a system of multiple use for Federal mining lands.

The MMDA establishes the procedures under which lands that are subject to both the 1872 Law and the Mineral Leasing Act of 1920 will be managed for purposes of mineral development. 43 CFR 3741.5 provides that: Since enactment of the Act on August 13, 1954, and subject to its conditions and provisions, including the reservation of Leasing Act minerals to the United States, mining claims and mill sites may be located under the mining laws of the United States on lands of the United States which at the time of location are:

  • Included in a permit or lease issued under the mineral leasing laws; or,
  • (b) Covered by an application or offer for a permit or lease filed under the mineral leasing laws; or
  • (c) Known to be valuable for minerals subject to disposition under the mineral leasing laws: This is inclusive of lands in petroleum reserves, except Naval petroleum reserves.

The MMDA is based upon the premise of cooperation, much more than is usually present even in active mining districts. A potential developer must anticipate that a higher degree of full-time presence will be required on MMDA lands than on unpatented mining claims staked on the public domain.

As more complex deposits are mined and advances in recovery technology increase the value of the mixed mineral deposits, it becomes more difficult to determine whether minerals should be developed under the 1872 Law or the MLA. These conflicts occur on lands under one of the following three sets of circumstances:

  • Lands containing a mixture of leasable minerals, each subject to separate provisions of the Mineral Lands Leasing Act;
  • Unappropriated lands containing intermingled locatable and leasable minerals, economic development of which depends on simultaneous extraction; and
  • Lands on which a mineral claimant has existing rights under the General Mining law but which also contain leasable minerals.
commodity examples

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