Order Code IB89130
CRS Issue Brief for Congress
Received through the CRS Web
Mining on Federal Lands
Updated February 28, 2005
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
The Claim-Patent System
Major Mining Legislation After the 1872 Mining Law
Claim-Patent System: Pros and Cons
Past Amendment Proposals
Proposals to Eliminate Subsidies
Fair Market Value
Federal Land Withdrawals
The Mill Site Debate
Surface Impacts of Hardrock Mining on Federal Lands
Claim Maintenance and Location Fees
CONGRESSIONAL HEARINGS, REPORTS, AND DOCUMENTS
FOR ADDITIONAL READING
Mining on Federal Lands
The General Mining Law of 1872 is one
of the major statutes that direct the federal
government’s land management policy. The
law grants free access to individuals and
corporations to prospect for minerals in public
domain lands, and allows them, upon making
a discovery, to stake (or “locate”) a claim on
that deposit. A claim gives the holder the
right to develop the minerals and may be
“patented” to convey full title to the claimant.
A continuing issue is whether this law should
be reformed, and if so, how to balance mineral
development with competing land uses.
The right to enter the public domain and
freely prospect for and develop minerals is the
feature of the claim-patent system that draws
the most vigorous support from the mining
industry. Critics consider the claim-patent
system a giveaway of publicly owned resources because of the small amounts paid to
maintain a claim and to obtain a patent.
Congress has imposed a moratorium on mining claim patents since FY1995.
In addition to the overall issue of whether
to reform the General Mining Law, two issues
also have been controversial. One involves
mining millsites. At issue is whether the
General Mining Law limits claimants to one
millsite of no more than five acres per mining
claim, or whether multiple millsites are allowed. In 1997, the Solicitor of the Department of the Interior ruled that only one
millsite of no more than five acres was allowed per claim. The 106th Congress provided a two-year exemption from the Solicitor’s opinion for mines with approved plans of
operation, operations with plans submitted
prior to the Solicitor’s opinion, and patent
applications grandfathered as part of the 1995
mining patent moratorium (P.L. 106-113).
Congressional Research Service
However, a 2003 opinion by the Bush Administration overturned the 1997 ruling and allows multiple millsites per mining claim, if
A second issue involves the Clinton
Administration’s revisions to the regulations
governing hardrock mining operations on
federal lands (43 CFR 3809), which took
effect January 20, 2001. The revised regulations authorized BLM to deny mining operations if they would result in “substantial irreparable harm” to significant resources that
cannot be mitigated. On October 30, 2001 (66
Fed. Reg. 54834), BLM issued a final rule that
removed many of the controversial aspects of
the Clinton regulations. A November 18,
2003, federal district court decision supported
the Bush Administration’s revision of the
rules (66 Fed. Reg 54834).
Three bills pertaining to hardrock mining
were introduced in the 108th Congress, but
there was no House or Senate action: the
Elimination of Double Subsidies for the Hardrock Mining Industry Act of 2003 (S. 44), the
Abandoned Hardrock Mines Reclamation Act
of 2003 (H.R. 504), and the Mineral Exploration and Development Act of 2003 (H.R.
2141). H.R. 504 would have established a
Reclamation Fund financed by reclamation
fees imposed on hardrock mineral producers.
H.R. 2141 would have imposed an 8% net
smelter royalty, allowed for an unsuitability
review by the Secretary of the Interior or
Agriculture, and established a reclamation
bond or financial guarantee and a reclamation
fund. Also in both sessions of the 108th Congress, the Interior and Related Agencies appropriations bills included a provision to
retain a patent moratorium that has been
imposed annually since 1995.
˜ The Library of Congress
MOST RECENT DEVELOPMENTS
Proposals to reform the General Mining Law of 1872 were reintroduced early in the
108 Congress. The Elimination of Double Subsidies for the Hardrock Mining Industry Act
of 2003 (S. 44) was introduced in the Senate on January 7, 2003. A second bill, the
Abandoned Hardrock Mines Reclamation Act (H.R. 504), was introduced in the House on
January 29, 2003. A broad-based third bill, the Mineral Exploration and Development Act
of 2003 (H.R. 2141) was introduced on May 15, 2003, to overhaul the General Mining Law
of 1872. No action was taken on those measures. But because there is some bipartisan
interest in reforming the law, it is likely that similar bills will be introduced and hearings will
be scheduled on mining issues in the 109th Congress.
Also in both sessions of the 108th Congress, the Interior and Related Agencies
appropriations bill supported the retention of the patent moratorium, which does not allow
the issuance of new patents on mining claims. New maintenance and location fees were
established at $126 and $32 per claim, respectively, beginning September 1, 2004. The
amount of the increase was determined by the Consumer Price Index (43 CFR 3833.1-5).
Two controversial mineral issues were resolved during the 108th Congress. One
involved the regulations that govern surface management of hardrock mining operations (43
C.F.R. 3809). A November 18, 2003, federal district court decision supported the Bush
Administration’s revision of the rules (66 Fed. Reg. 54834) that removed some of the
controversial changes made by the Clinton Administration.
The second issue involved mining millsites. A legal opinion on millsites released by
the Bush Administration on October 7, 2003, allowed for multiple millsites per mining claim
if necessary. This decision overturned a Clinton Administration decision that allowed only
one millsite per claim.
BACKGROUND AND ANALYSIS
The purposes of the 1872 Mining Law were to promote mineral exploration and
development on federal lands in the western United States, offer an opportunity to obtain a
clear title to mines already being worked, and help settle the West. The Mining Law granted
free access to individuals and corporations to prospect for minerals on open public domain
lands, and allowed them, upon making a discovery, to stake (or “locate”) a claim on the
deposit. A valid claim entitles the holder to develop the minerals. The 1872 Mining Law
originally applied to all valuable mineral deposits except coal (17 Stat. 91, 1872, as
Public domain lands are those retained under federal ownership since their original
acquisition by treaty, cession, or purchase as part of the general territory of the United States,
including lands that passed out of but reverted back to federal ownership. “Acquired” lands
— those obtained from a state or a private owner through purchase, gift, or condemnation
for particular federal purposes rather than as general territory of the United States — are
subject to leasing only and are not covered by the 1872 Law. Some public lands may be
“withdrawn” or closed to mineral entry.
The 1872 Mining Law was one of the primary forces behind the development of mineral
resources in the West, along with the industries and services that supported mineral
production. Major hardrock minerals developed in the West include copper, silver, gold,
lead, zinc, molybdenum, and uranium. During the 19th century, major mining districts for
silver and gold were developed under the Mining Law in Colorado, California, Idaho, and
Nevada. Early in the 20th century, there were major developments of porphyry copper in
Arizona. Large molybdenum and tungsten deposits in Colorado were also developed. The
Mining Law continues to provide the structure for much of the Western mineral development
on public domain lands. Western mining, although not as extensive as it once was, is still
a major economic activity, and a high percentage of hardrock mining is on public lands.
The Claim-Patent System
After a prospector has conducted exploration work on public domain land, he or she
may locate a claim to an area believed to contain a valuable mineral. Under legislation
initially enacted by the 102nd Congress (P.L. 102-381), claimants must pay an annual
maintenance fee of $100 to hold a claim on public land. The annual maintenance fee rose
to $126 per claim beginning September 1, 2004. This superseded a previous requirement
that $100 of annual development work be conducted per claim. The Omnibus Consolidated
Appropriations Act for FY1999 (P.L.105-277) extended the maintenance fee through
FY2001 at $100 per claim or site. In FY2002 the maintenance fee was extended for an
additional two years (P.L. 107-63), and it will be adjusted every five years according to 43
CFR 3833.1-5. There is also a $25 fee for a first-time claimant to locate and record a claim,
as initially required by P.L. 103-66 and subsequently extended through FY2008. An increase
in the location fee to $32 per claim began September 1, 2004.
For FY2004, the maintenance and location fees generated an estimated $24.6 million
in revenue, according to the Bureau of Land Management (BLM). This reflects a significant
decrease from $30.7 million for FY1995, the first year that both fees were collected. Fees
peaked in FY1997 at $35.9 million.
Once a claimed mineral deposit is determined to be economically recoverable, and at
least $500 of development work has been performed, the claim holder may file a patent
application to obtain title to surface and mineral rights. Beginning January 3, 1989, a fee of
$250 per patent application plus $50 per claim within each application has been required.
If the patent application is approved, the claimant may purchase surface and mineral rights
at a rate of $2.50 per acre for placer claims and $5 per acre for lode claims. A placer deposit
is an alluvial deposit of valuable minerals usually in sand or gravel; a lode or vein deposit
is of a valuable mineral consisting of quartz or other rock in place with definite boundaries.
(Source: Dictionary of Mining, Mineral and Related Terms, Bureau of Mines, 1968.) A
placer claim is usually limited to 20 acres but a lode claim may be slightly greater than 20
acres. These per-acre fees were substantial when the Mining Law was enacted — claimed
land and minerals now far exceed these amounts in value.
The following provisions currently apply to claims:
There is no limit on the number of claims a person can locate.
There is no requirement that mineral production ever commence.1
Mineral production can take place without a patent or royalty payments to
the federal government.
Claims can be held indefinitely with or without mineral production, subject
to challenge if not developed.
Most of the current mining activity and mineral claims under the Mining Law are in
Nevada, Arizona, California, Montana, and Wyoming. As of the end of FY2003,
approximately 45% of mining claims were in Nevada alone and another nearly 35% were in
the other four states. According to the Bureau of Land Management (BLM), the number of
active claims declined from about 1.2 million claims in FY1989 to 294,678 for FY1993.
Many claims were dropped as a result of provisions of law charging a $100-per-claim annual
maintenance fee. The number of active claims subsequently rose to 324,651 in FY1997,
reflecting the relative strength of the gold and copper industries. The number of active
claims fell to a low of 207,757 for FY2001, reflecting a decline in the gold and copper
industries and, according to a BLM official, changes in public land policy that significantly
lengthened the time necessary to get permission to mine. Active claims stood at 219,526 in
Only a small percentage of claims are ever patented, totaling about 3.3 million acres
from 1867 through 2000. This represents approximately 1.5% of all public lands patented;
most public lands have been patented under homestead entries, statehood grants, railroad
grants, and other non-mineral public land laws. It is not required to patent a claim to mine
a deposit, and a great deal of mining activity is currently taking place on unpatented claims.
However, patenting a claim gives the holder legal title to both the surface and the minerals,
and relieves the holder of having to pay the annual fees.
Major Mining Legislation After the 1872 Mining Law
In 1920, the Mineral Leasing Act removed oil, gas, oil shale, phosphates, sodium, and
certain other minerals on federal public domain lands from the claim-patent system of the
1872 Mining Law and set up a system of leasing in which the federal government retains
ownership of the leased lands. Coal, which previously had its own claim-patent law (the
1873 Coal Act), was also included in the 1920 Leasing Act. After 1955, common variety
minerals such as sand, stone, gravel, cinders, and pumice were sold under the Materials Act
of 1947, as amended. A strong push for an all-leasing system developed during the 1930s
and 1940s, but no such legislation was enacted.
As mentioned, acquired federal lands were never subject to the General Mining Law.
The Mineral Leasing Act for Acquired Lands of 1947 authorized the leasing of leasable
minerals in some acquired federal lands. The Reorganization Plan of 1946 (no.3) and earlier
acts authorized the leasing of hardrock minerals on acquired forest lands.
However, before the enactment of P.L. 102-381, claimants were required to conduct at least $100
of development work per year.
During the 1960s and 1970s, the Multiple Use Sustained Yield Act, Wilderness Act,
National Forest Management Act, National Environmental Policy Act (NEPA), and Federal
Land Policy Management Act (FLPMA) addressed environmental protection, multiple use,
and management of federal land generally. By imposing new requirements on agency
actions, and by withdrawing some federal lands from development, these acts have affected
mineral development under both the leasing system and the Mining Law claim-patent system.
The Mining Law contains no direct environmental controls, but mining claims are subject
to all general environmental laws as a precondition for development. The mining industry
must comply with applicable requirements of the Clean Water and Clean Air Acts, state
reclamation standards where they exist, and federal and state statutes relating to the handling
and disposal of certain toxic wastes, among other laws.
The evolving leasing system and later withdrawals of lands from hardrock exploration
and development diminished the amount of lands under the Mining Law authority. For those
hardrock minerals that remain under the Mining Law, however, the claim-patent system is
essentially the same as it was when the law was enacted.
Critics argue that the West is now developed and that the 1872 Mining Law is obsolete
and inconsistent with other federal natural resource policies. Supporters maintain that the
combination of leasing for some resources and a claim-patent system for others works well
and should be maintained. The National Mining Association (NMA) states that the “existing
law more than adequately meets the four criteria essential to any mineral tenure law”: free
and open access to explore for minerals on unappropriated public lands, exclusive
exploration rights, the right to develop the valuable minerals discovered, and security of
When oil shale was transferred from the 1872 claim-patent system to the leasing system
in the 1920 Mineral Leasing Act, a large number of existing unpatented oil shale claims were
continued under the terms of the 1872 Mining Law. In a 1986 court case, the U.S. district
court of Colorado reached a controversial finding that these claims were valid and could be
patented if claimants had made $500 worth of improvements on the land, even if the
statutory $100 annual work requirement had not always been fulfilled.
Legislation to resolve oil shale issues was enacted as part of the Energy Policy Act of
1992 (P.L. 102-486). This law offers general and limited patents based on the status of the
application at the time of enactment. Limited patent holders receive title to the oil shale only
and are required to post a reclamation bond or financial guarantee. Patent fees remain $2.50
Beginning in FY1995, Congress has enacted (in the Interior appropriations laws) a
series of one-year moratoria on the issuance of mineral patents. For FY2000, the
Consolidated Appropriations Act (P.L. 106-113, §312) essentially retained the mineral
patent moratorium contained in previous appropriations laws. The Interior and Related
Agencies Appropriations Act for FY2002 (P.L. 107-63) also contained a one-year extension
of the moratorium on mining patents. Another one-year patent moratorium is pending in the
FY2003 Interior bill.
Claim-Patent System: Pros and Cons
The right to enter the public domain lands and prospect for and develop minerals is the
feature of the claim-patent system that draws the most vigorous support from the mining
industry. Modern hardrock mineral exploration requires a continuous effort using vast tracts
of land and sophisticated and expensive technology. Industry officials argue that being able
to obtain full and clear title to the land enhances a company’s ability to bring an economic
deposit into production; financing the project, for example, may be more feasible. They
contend that restrictions on free access and security of tenure would curtail exploration
efforts among large and small mining firms. In their view, the incentive to develop would
be lost, long-run costs would increase, and the industry and the country would suffer.
Mining Law critics consider the claim-patent system a giveaway of publicly owned
resources because of the absence of royalties and the small charges associated with keeping
a claim active and obtaining a patent. They maintain that although such generous terms may
have been effective ways to help settle the West and develop minerals, there is no solid
evidence that under a different system minerals would not be developed today. They also
believe the current system, by conveying title and allowing other uses of patented lands,
creates difficult land management problems through the creation of private inholdings on
public land, and that current law does not provide for adequate protection of the
In the claim-patent system, mineral claims may be held indefinitely without any mineral
production. In some instances, claimed or patented land has been used for purposes other
than mineral development. Once lands are patented to convey full title to the claimant, the
owner can use the lands for a variety of purposes, including non-mineral ones. However,
using land under an unpatented mining claim for anything but mineral and associated
purposes violates the Mining Law. Critics believe that many claims are held for speculative
purposes. However, industry officials argue that a claim may lie idle until market conditions
make it profitable to develop the mineral deposit.
Another issue surrounds “discovery” and “prediscovery” protection. The law requires
that “no location of a mining claim shall be made until the discovery of the mineral within
the limits of the claim.” If a discovery is made and a valid location established, the claimant
has a valid possessory right against all other parties. One purpose of the discovery
requirement was to help reduce speculation. However, demonstrating discovery of a
valuable mineral deposit may require considerable time and effort on the part of a prospector.
The prospector may find indications of a deposit, but demonstrating its value may involve
exploration over a large area and drilling and analyses of core samples to define the quality
and extent of the mineral. The Supreme Court has ruled that all claims located are deemed
valid until proven otherwise. Typically, in practice, the federal government has allowed
claims based on general indications that a mineral deposit exists, and required proof of
discovery only upon application for a patent unless circumstances warrant full proof sooner,
for example, mineral claims in sensitive areas.
The industry has indicated it wishes to avoid major challenges to the principle of free
access and the right to obtain a patent. The industry generally opposes placing hardrock
minerals under a leasing system because this would give the federal government
discretionary control over development, impose royalty payments, and retain government
ownership of surface and/or mineral rights.
Past Amendment Proposals
Proposals to amend the 1872 Mining Law have fallen under the following broad
Modify the claim-patent system to retain the patent feature, but require
payment of fair market value for all or part of the value of the land. The
Government also would collect some percent of the value of mineral
production as royalties.
Convert the claim-patent system to a permitting system, and prohibit further
patenting. Advocates of this proposal argue that a permitting system would
be effective in achieving a fair market value return to the federal Treasury
for public lands. This system would collect royalties and add new
environmental standards to mining operations. Mineral industry supporters,
on the other hand, contend that the Department of the Interior is already
overburdened with the current leasing system and that comprehensive
hardrock mining reform would only add to its inefficiency and ultimately
increase costs through royalty and rents.
Continue the current claim-patent system, but with some amendments.
Proposed changes have included eliminating the distinction between lode
and placer claims, imposing a time limit within which claims must be
developed, expanding the size of a claim, providing better prediscovery
protection, and opening more public lands to mineral exploration.
Proposals to Eliminate Subsidies
The Mining Law currently allows a claimant to produce minerals without a patent and
without paying royalties or rents to the federal Treasury. This is considered a subsidy by
many because the miner does not pay for a factor of production (i.e., land and mineral
resources). By contrast, royalties are paid to the federal government for oil and gas leasing
on federal lands, and non-federal land owners (e.g., private and state owners) typically
receive a royalty from those who produce minerals on their lands. Also, if the claimant
patents the surface and mineral estate for the $2.50 or $5.00 per acre, this too can be
considered a subsidy because the claimant is paying less than fair market value for the
surface and mineral estates. Various tax incentives, such as the percentage depletion
allowance (a tax deduction for the depletion of a mineral resource) and “expensing” (writing
off in the year of expenditure) the costs of exploration and development, have been
characterized as subsidies to the industry as well.
Eliminating some of the natural resource subsidies, in the Clinton Administration’s
view, would have been one way to increase revenues to the Treasury and help ensure a fair
return to the taxpayer for the development of public lands. In its FY2001 budget request, the
Clinton Administration proposed charging mining companies a 5% fee on net smelter
production from hardrock mining on federal lands. The Bush Administration did not make
a similar proposal any of its budget requests.
As has been previously noted, the original intention of the Mining Law was to develop
the nation’s minerals and to develop the West. Proponents of retaining the current system
contend that an incentive still is necessary for those who take substantial financial risk to
develop a mineral deposit. Mining is a capital-intensive process that often takes years of
development before minerals are produced.
Imposing royalties, increasing holding fees, and repealing the percentage depletion
allowance would have some impact on domestic hardrock mineral production, but the level
of any production decline attributable solely to new fees is difficult to estimate. The mining
industry generally has opposed legislation to repeal the percentage depletion allowance. The
elimination of some incentives to the industry would come at a time when the West is
already developed (an original goal of the law) and mineral/metal demand is relatively good.
However, prices are fluctuating, and the mining industry is looking outside the United States
for lower-cost deposits. Also, several mineral-producing nations are rewriting their mining
laws to attract more U.S. and western investment. Some U.S. deposits are becoming much
less competitive with foreign deposits. Any new cost increases in one area, without cost
reductions in others, may make U.S. mineral deposits less competitive or uneconomic.
Fair Market Value
Many believe that the federal government does not receive fair market value for land
and resources transfers under the Mining Law. It receives no royalties or rents from mining
activities conducted under the law. In addition, the $2.50 and $5.00 per-acre price for clear
title to the surface and mineral rights has not changed since the law was enacted. The
per-acre price appears to be based on the value of Western farmland and grazing land before
the enactment of the law in 1872.
Determination of fair market value of mineral-bearing lands is complex because many
geologic, engineering, and economic factors must be considered, and fair market value
determinations typically are controversial. According to a 1989 report by the General
Accounting Office (GAO), the fair market value of mineral-bearing lands is substantially
more than the $2.50 and $5.00 per acre that a claimant pays for patenting a claim. GAO
estimated that, for 20 patents it reviewed, the federal government had received less than
$4,500 since 1970 for lands valued between $13.8 million and $47.9 million.2
The GAO appraisal method, however, was criticized by the Bureau of Land
Management (BLM) in a May 1989 Report to the Secretary of the Interior. The GAO report
obtained information on land values from BLM, Forest Service officials, and local real estate
brokers. GAO’s estimates were based on recent sales of comparable land, not the value of
the land at the time claims were patented; much of the land may have had very little value
The Mining Law of 1872 Needs Revision, United States General Accounting Office, GAO/RCED89-72, March 1989, p. 24.
at the time it was claimed or patented. BLM argues that sales of adjacent tracts that either
have no mineral development potential or are sold for mineral rights alone cannot be used
to establish fair market value of the surface of patented mining claims and that data on
comparable sales are rare.
The Department of the Interior (DOI) estimates the value of hardrock mineral
production on federal land at $1.0 billion for FY2000, a decrease from an estimated $1.8
billion in FY1993. The decline can be attributed in part to a reduction in the value of mineral
production from the federal lands because of acreage conveyed out of federal ownership
through patenting, according to a BLM official.
The lack of direct statutory authority for environmental protection under the Mining
Law of 1872 is another major issue that has spurred reform proposals. Many Mining Law
supporters contend that other current laws, as noted above, provide adequate environmental
protection. Critics, however, argue that these general environmental requirements are not
adequate to assure reclamation of mined areas and that the only effective approach to
protecting lands from the adverse impacts of mining under the current system is to withdraw
them from development under the Mining Law. Further, critics charge that federal land
managers lack regulatory authority over patented mining claims and that clear legal authority
to assure adequate reclamation of mining sites is needed.
Federal Land Withdrawals
BLM is responsible for approximately 700 million acres of federal subsurface minerals,
and supervises the mineral operations on about 56 million acres of Indian trust lands. Some
of these lands have been withdrawn from mineral development; a withdrawal is an action
that restricts the use or disposition of public land. In some cases land is reserved for a
specific use that may preclude locating mining claims and granting leases.
A BLM study determined that of the approximately 700 million acres of federal
subsurface minerals under the agency’s jurisdiction, approximately 165 million acres have
been withdrawn from mineral entry, leasing, and sale, subject to valid existing rights. Lands
in the National Park System (except National Recreation Areas), the Wilderness Preservation
System, and the Arctic National Wildlife Refuge (ANWR) are among those that are
statutorily withdrawn. Also, of the 700 million acres, mineral development on another 182
million acres is subject to the approval of the surface management agency, and must not be
in conflict with land designations and plans, according to a BLM official. Wildlife refuges
(except ANWR), wilderness study areas, and roadless areas, among others, are in this
FLPMA mandated review of public land withdrawals in 11 Western states to determine
whether, and for how long, existing withdrawals should be continued. BLM continues to
review approximately 70 million withdrawn acres, giving priority to about 26 million acres
Public Lands, On-Shore Federal and Indian Minerals in Lands of the U.S., Bureau of Land
Management, U.S. Department of the Interior, December 1, 2000.
that are expected to be returned by another agency to BLM, or, in the case of BLM
withdrawals, made available for one or more uses. Currently, the BLM has completed
reviewing over 7 million withdrawn acres, mostly BLM and Bureau of Reclamation land; the
withdrawals on more than 6 million of these acres have been revoked. According to the
BLM Manual, retention of a withdrawal requires a compelling show of need, and an agency
manager “recommending that lands not be opened to multiple use, particularly mining and
mineral leasing, must convince the BLM Director, Secretary, and watchful segments of the
public, that there is no reasonable alternative to continued withdrawal or classification.” The
review process is likely to continue over the next several years, in part because the
withdrawals must be considered in BLM’s planning process and be supported by
documentation under NEPA.
Mineral industry representatives maintain that federal withdrawals inhibit mineral
exploration and limit the reserve base even when conditions are favorable for production.
Mineral reserves are not renewable. Thus, they argue that whether minerals are in the public
or private sector, without new reserves or technological advancements, mineral production
costs may rise. As a result, according to the industry, exploration on foreign soil may
increase, raising the risk to investors and boosting import dependence. In this view,
governmental policies that increase costs to the mineral industry may result in increased costs
to society. Mining industry supporters also assert that too much land has been unnecessarily
withdrawn from mining, through administrative actions, to pursue preservation goals.
Critics of the Mining Law believe that in many cases there is no way to protect other
land values and uses short of withdrawal of lands from development under the law. They
point to unreclaimed areas that have been mined for hardrock minerals in the past, Superfund
sites related to past mining and smelting, and instances where development of resources
could spoil scenic, historic, cultural, and other resources on public land.
In addition to the General Mining Law, two other mining issues also have been
controversial and the subject of oversight or legislation in the 107th Congress. One relates
to mining millsites, while the other relates to hardrock mining on federal lands. The 107th
Congress extended the moratorium on the issuance of mining patents and extended the claim
maintenance and location fees. These issues are addressed below.
The Mill Site Debate
One of the most controversial issues in the 106th Congress related to a November 7,
1997, legal opinion of the Solicitor of the Department of the Interior that each mining claim
can use no more than 5 acres for activities associated with mining (“millsites”). The decision
affected modern mining operations, such as heap-leach mines for gold and other hardrock
minerals, which typically require large tracts of land beyond that of the mining claim for
mining-related purposes, including disposal of waste rock. Critics of the decision charged
that it constituted a new interpretation of the relevant provisions of the 1872 Mining Law (30
U.S.C. 42), was inconsistent with the practice of the Department of the Interior in granting
operating plans for mining without regard to acreage limitations or the ratio of millsite
locations to mining claims, and was an indirect way of reforming the 1872 Mining Law. The
Department of the Interior has rebutted these criticisms, asserting that its opinion was based
both in law and practice.
Based on the Solicitor’s 1997 opinion, on March 26, 1999, the Solicitor ruled against
the Battle Mountain Gold Company’s plan of operation for a gold mine (the Crown Jewel
Mine in Washington state) based on noncompliance with the General Mining Law of 1872.
However, the denial of the plan of operations for the Crown Jewel Mine was overturned in
the 1999 Emergency Supplemental Appropriations Act (P.L. 106-31). This law directed that
the number or acreage of millsites for the Crown Jewel mining operation not be limited, and
that its plan of operation be approved. It further directed that other patent applications and
plans of operation submitted prior to the law be given permits.
The issue again became contentious during consideration of the FY2000 Interior
appropriations bill, with the House and Senate passing opposing language on the subject.
The House agreed to support, and the Senate to overturn, the 1997 opinion of the Solicitor.
During initial floor consideration, the House had agreed to language barring funds
“appropriated by this act” from being used to process applications for approvals of patents,
plans of operations, or amendments to plans that conflict with the opinion of the Solicitor.
By contrast, the Senate-passed language would have prohibited the Departments of the
Interior and Agriculture, “in any fiscal year,” from limiting the number or acreage of millsites
based on the ratio between the number or acreage of millsites and the number or acreage of
mining claims. The Senate millsite language sought a permanent prohibition on limiting
acreage or millsites based on the number of mining claims, using the BLM Handbook for
Mineral Examiners (H-3890-1, 1989) and the BLM Manual (Section 3864.1.B, 1991) as its
basis. It apparently would have reversed the Solicitor’s opinion permanently and
comprehensively as well as prospectively. On the floor, the Senate rejected an amendment
to remove the millsite language from the bill, so as to allow the Solicitor’s opinion to stand.
A related amendment, essentially designed to protect ongoing mining operations from the
Solicitor’s opinion, was withdrawn.
The 106th Congress ultimately enacted (P.L. 106-113, §337) a two-year exemption from
the Solicitor’s millsite opinion for: (1) patent applications grandfathered as part of the 1995
mining patent moratorium; (2) any mining operation with an approved plan of operation; and
(3) any operation with a plan of operation submitted to the BLM or the Forest Service before
November 7, 1997 — the date of the Solicitor’s opinion. (An earlier conference report had
excluded plans of operation submitted prior to May 21, 1999, but this was opposed by the
Clinton Administration). The explanatory language accompanying the conference agreement
expressed the view that it would be “inequitable” to apply the opinion “retrospectively” in
these instances. Specifically, the exemption was for FY2000 and FY2001. (For further
information, see CRS Report RL30310, The Mining Law Millsite Debate.)
As the two-year exemption was set to expire, the Interior Department under the Bush
Administration decided on September 28, 2001, not to apply the Millsite Opinion to those
plans of operations submitted before November 7, 1997, or plans approved before November
29, 1999, as well as the grandfathered patent applications. The Millsite Opinion was placed
under review but was recently resolved by the Department of the Interior. On October 7,
2003, the Interior Department’s Solicitor reached a decision that allows for multiple millsites
per mining claim if necessary for the successful development of mineral resources (68 Fed.
Both industry and the Department of the Interior acknowledged that a 5-acre per claim
millsite limit is outdated and cannot accommodate the modern mining industry. Rather than
increase the number or acreage of millsites, the Clinton Administration favored other options
such as the use of land exchanges (Section 206) or permits and leases (Section 302(b)) under
the Federal Land Policy and Management Act. Recent practice has included the use of more
than 5 acres per mining claim and the use of land exchanges. One of the major policy
questions is whether the millsite debate will open the door for broader Mining Law reform.
Surface Impacts of Hardrock Mining on Federal Lands
A second issue involves the Department of the Interior’s revisions to the regulations
governing the surface impacts of hardrock mining operations on federal lands (43 CFR
3809). The Clinton Administration published a final rule on November 21, 2000, with an
effective date of January 20, 2001. On March 23, 2001, the Bush Administration proposed
suspending the new 3809 regulations and reinstating the ones that existed on January 19,
2001, until a review of the new regulations could be completed and a decision is made
regarding them. The Clinton Administration regulations were in effect until the Bush
Administration published its final rule October 30, 2001. The Clinton Administration
regulations authorized the Bureau of Land Management (BLM) to disapprove a plan of
operations for mining if the mining would result in “substantial irreparable harm” to
significant resources that cannot be effectively mitigated. However, this provision was
removed from the Bush Administration’s new final rule revisions.4 The authority to deny
mining operations was the most controversial aspect of the regulations, referred to by some
in the mining industry as an unnecessary “mine veto” power. Other changes in the
regulations make mining operators more responsible for reclaiming mined lands. New
bonding requirements (retained in the Bush final rule revision) provide for miners to post
bonds to ensure that they will clean up sites when the mines close, and a reclamation bond
must be equal to 100% of the estimated cleanup cost.
In June 2001, the BLM announced that it expected to retain the provisions on bonding
requirements with a modification to extend the deadline for mining operators to meet them.
For mining operations which already have provided a financial guarantee, the deadline for
complying with the requirements would be extended by four months (from July 19, 2001 to
November 20, 2001). Operators who had not provided a financial guarantee would receive
an additional two months (until September 13, 2001). Under the old rules, mines disturbing
5 acres or less per year did not require a cleanup bond and companies could pledge assets
The ability to obtain bonding has been problematic for some mining firms. Among the
many reasons presented at an oversight hearing (Subcommittee On Energy and Mineral
Resources, July 23, 2002), the major cause for concern, according to the Alaska Mining
Association, is the high risk the surety bonding companies face when complying with the
current or proposed 3809 surface management rule. The major risk factors cited were the
Federal Register, 66 FR 54834, October 30, 2001.
“uncertainty of amount, uncertainty of duration and uncertainty regarding bond release
criteria.” On the other hand, testimony from the Center for Science in Public Participation
describes the high risk facing surety bonding firms as that normally associated with the
capital intensive mining industry, and not necessarily linked directly to the surface
Proponents of the earlier Clinton version (43 U.S.C. 1732) asserted they enhance the
BLM’s authority under law to prevent “unnecessary or undue degradation” of public land
resources from mining operations (43 U.S.C. 1732). However, the mining industry asserted
that the regulations were unlawful, impeded mining operations, and in some ways duplicated
existing federal and state laws.
On October 30, 2001 (66 Fed. Reg. 54834), BLM issued a final rule (effective
December 31, 2001) that removed many of the more controversial aspects of the Clinton
regulations. On the same day (66 Fed. Reg. 54863), BLM proposed making the same
changes. Proposing the changes that were already finalized was intended to allow BLM to
receive additional comments on legal, economic, and environmental issues that were raised
concerning the new regulations. Some of the concerns were expressed in lawsuits
challenging the Clinton Administration’s rules. In some suits, industry plaintiffs and the
State of Nevada assert that BLM improperly issued the rules and violated numerous statutes.
In one such suit, the National Mining Association sought a preliminary injunction on the
grounds that the regulations were unlawful in several respects, but this injunction was denied.
By contrast, environmental plaintiffs charged that the new rules were weak, improperly
allowing mining operations on lands without valid mining claims or mill sites. In a
November 18, 2003 decision by District Judge Henry H. Kennedy, the courts ruled that it had
no authority to bar the Interior Department from carrying out its new regulations because the
regulations were not illegal. However, the Judge recognized that some of the new regulations
may be “unwise and unsustainable” land use policy, a claim that environmental opponents
of the rule continue to make.
During debate on the FY2002 Interior and Related Agencies Appropriations Bill (H.R.
2217), the House agreed to a floor amendment (216-194) that would bar the use of funds in
the bill from being used to suspend or revise the Clinton Administration hard rock mining
regulations that took effect on January 20, 2001. The amendment was advocated as
maintaining necessary environmental protections, but opposed as precluding the Bush
Administration from reviewing regulations that were amended perhaps too extensively by
the Clinton Administration. The bill as reported by the Senate Committee on Appropriations
did not contain language on this subject. The House language was not included in the
conference report (H.Rept. 107-258).
Another significant difference between the Bush and the Clinton rules was on civil
penalties. Instead of BLM discretionary penalties of $5,000 per day and suspensions of
operations for noncompliance, the final rule sticks with language in the 1980 rule that allows
for operators to be subject to enforcement if they do not comply with specified reclamation
The Clinton Administration regulations that took effect on January 20, 2001, were the
culmination of a decade-long review of hardrock mining regulations. They replaced earlier
regulations that, for the most part, were issued in 1980. Congress had directed BLM as to
what provisions could be included in the revised rules. In particular, the 106th Congress
enacted provisions in the FY2000 and FY2001 appropriations laws to prohibit the Secretary
of the Interior during the Clinton Administration from using funds to revise the hardrock
mining regulations except to make changes “not inconsistent” with law and the
recommendations contained in a National Research Council (NRC) report entitled “Hardrock
Mining on Federal Lands”5 (P.L. 106-113, §357; and P.L. 106-291, §156). In issuing the
revised regulations, the Department of the Interior, under the Clinton Administration,
interpreted this as allowing the regulations to address subjects other than those included in
the specific recommendations of the NRC report, provided these recommendations were not
directly contradicted. This interpretation has been controversial in Congress.
The FY2005 Interior and Related Agencies spending bill (contained in P.L. 108-447
(H.R. 4818), the Consolidated Appropriations Act of 2005) continues the moratorium on the
issuance of mining patents. The House and Senate-passed versions (included in the
conference report) contained identical language continuing the moratorium on accepting and
processing applications for patents for mining and mill site claims on federal lands. However,
applications meeting certain requirements that were filed on or before September 30, 1994,
would be allowed to proceed, and third-party contractors would be authorized to process the
mineral examinations on those applications.
The annual one-year moratorium on patenting continues the uncertainty over whether
the federal government will continue to try to reform the 1872 Mining Law. The mining
industry would like to end the uncertainty to facilitate its long-term business planning.
Environmentalists, who were hoping for new environmental protection language in a major
mining law reform bill, argue that the patent moratorium does not protect the environment
from current mining practices.
As of January 2001, there were 425 mineral patent applications pending, of which 237
are grandfathered and proceeding forward and 191 are subject to the moratorium and thus
will not be processed. The patent moratorium will not stop the production of valuable
mineral resources from the public lands, but will prevent the further transfer of ownership
of public lands to the private sector (with the exception of the 237 patent applications already
in the pipeline).
Claim Maintenance and Location Fees
To hold a claim on public land, claimants must pay an annual maintenance fee of $100
per claim. There also is a $25 fee for first-time locators to locate and record a claim. These
provisions of law, effective through FY2001, were extended for two years by the FY2002
Interior and Related Agencies Appropriations bill (P.L.107-63). Beginning in September
2004, the annual maintenance fee was increased by $26 (to $126), and the one-time location
fee rose by $7 (to $32).
Hardrock Mining on Federal Lands, Committee on Hardrock Mining on Federal Lands, National
Mining reform legislation did not move forward in the 107th or 108th Congresses, even
though the Bush Administration acknowledged interest in the issue. It is likely that similar
bills will be reintroduced in the 109th Congress.
On January 29, 2003, the Abandoned Hardrock Mines Reclamation Act (H.R. 504) was
introduced in the House as a measure to help finance the cleanup of inactive and abandoned
mine sites in certain eligible states. The proposal would have established an interest-bearing
Abandoned Minerals Mine Reclamation Fund. Its revenues would have come from a
reclamation fee imposed on producers of hardrock minerals that received a claim or patent
under the General Mining Law of 1872. The fee would be a percentage of the net proceeds
from the mine.
A second bill, the Elimination of Double Subsidies for Hardrock Mining Industry Act
of 2003 (S. 44), introduced in the Senate on January 7, 2003, would have disallowed the
percentage depletion allowance for hardrock mines located on lands covered by the general
mining laws or patented under these laws. The measure also would have established an
Abandoned Mine Reclamation Trust Fund in the Treasury for reclamation and restoration
of land and water adversely affected by mining.
A broad-based bill, the Mineral Exploration and Development Act of 2003 (H.R. 2141)
would have established a permanent $100 per claim annual maintenance fee and $25 per
claim location fee. The bill would have limited the issuance of patents to claimants whose
patent applications were filed with the Secretary of the Interior on or before September 30,
1994, and met appropriate statutory requirements by that date. The bill included an
abandoned locatable minerals mine reclamation fund and an 8% royalty on “net smelter
returns.” Lands located under the General Mining Law of 1872 would be subject to an
unsuitability review by the Secretary of the Interior or the Secretary of Agriculture to
determine whether they were unsuitable for mineral activity. A reclamation plan and
reclamation bond or other financial guarantee would be required before exploration and
operation permits are approved. A provision in the bill allowed for civil suits to be filed in
U.S. District Courts should a person feel adversely affected. The bill was introduced on May
CONGRESSIONAL HEARINGS, REPORTS, AND DOCUMENTS
U.S. Congress. Majority Staff Report of the Subcommittee on Oversight and Investigations
of the Committee on Natural Resources of the U.S. House of Representatives, Taking
From the Taxpayer: Public Subsidies For Natural Resource Development, 103rd
Congress, Committee Print No. 8, August 1994.
U.S. Congress. Testimony to the Subcommittee on Mineral Resources, Committee on
Resources, U.S. House of Representatives, 107th Congress, July 23, 2002. Hearing on
Availability of Bonds to Meet Federal Requirements for Mining, Oil, and Gas Projects.
FOR ADDITIONAL READING
Gerard, David. 1872 Mining Law: Digging A Little Deeper, PERC Policy Series, PS-11
Bozeman, MT. December 1997.
Gordon, Richard , VanDorn, Peter. Two Cheers for The 1872 Mining Law, CATO Institute,
Washington D.C. April 1998.
Leshy, John D. The Mining Law: A Study in Perpetual Motion, Resources For The Future,
Washington D.C. 1987.
National Research Council. Hardrock Mining on Federal Lands, Committee on Hardrock
Mining on Federal Lands, National Academy Press, Washington D.C. 1999.
U.S. General Accounting Office. The Mining Law of 1872 Needs Revision,RCED-89-72,
Washington D.C., March 1989.