Minuet Over the Mining Law of 1872: The Reformation of Federal Hard Rock Minerals Policy

In order to promote westward expansion after the Civil War, the federal government adopted a policy of encouraging private extraction of the mineral riches lying west of the Mississippi River. This policy decision culminated in the passage of the General Mining Law of 1872,¹ which effectively legitimized existing mining claims on public domain² lands in the West and allowed any citizen to stake and hold a new claim with little difficulty. Under the law, a prospector was given free access to the public lands and could obtain possession of a 20-acre tract holding a valuable mineral deposit simply by "locating" a claim on it. Moreover, he could ultimately gain fee title to the land by acquiring a "patent" for his claim.

The Mining Law, which is now 106 years old, still governs the disposition of "hard rock" minerals, which consist generally of metallic ores, on that portion of the public domain that has not been "withdrawn" from the law's operation.³ Its detractors view the statute as an anachronistic remnant of a philosophy of short-term private exploitation of public resources that has long since been repudiated and replaced with the policy of multiple-use management. Last year in his Environmental Message, President Carter added his voice to the chorus demanding that the law be changed.⁴

An analysis of the issues involved in the dispute over the Mining Law of 1872 and federal hard rock minerals policy in general shows that the present regulatory scheme is seriously deficient in several respects. Furthermore, a series of ad hoc legislative, administrative, and judicial attempts to mitigate the statute's worst features without drastic changes in the law itself have succeeded only in showing the necessity and advisability of comprehensive amendment of the 1872 law.

The Mining Law of 1872: The Claim-Patent System

The Mining Law of 1872 established a claim-patent system for transferring mineral deposits on the public lands to private ownership. Citizens were given the right to enter any public domain lands to prospect for minerals.⁵ If a prospector discovers a valuable mineral deposit, he is entitled to "locate" a mining claim by marking the boundaries of the claim, posting a notice at the claim site, and recording the claim at the local land office.⁶ A valid claim can be maintained merely by investing $100 of labor or improvements in it each year.⁷ The holder of a valid claim has the exclusive right of possession and enjoyment of the surface estate, and his claim consistes a property right which is both inheritable and transferable.⁸ The maximum size of an individual claim was set at approximately 20 acres,⁹ but no limit was placed on the number of claims maintainable by one person.

A claim holder can acquire full title to the land upon which his claim is located by procuring a "patent." A patent applicant is required to submit to the Department of the Interior an accurate plat of the claim and evidence showing that the mineral deposit is "valuable" and that $500 worth of labor or improvements have been put into the claim.¹⁰ Once these requirements are met and the government is paid a nominal purchase price, a patent will issue giving the claimant absolute ownership of the land.¹¹

Thus, as originally enacted, the Mining Law of 1872 gave any citizen the right to enter public domain lands, prospect for minerals, locate and patent claims to "valuable" deposits, and thereby obtain title to the land for mining or any other use. The Department of the Interior was given no power to deny a mining claim for any reason except the claimant's failure to demonstrate discovery of a valuable deposit or to perform the required level of work. The Act provided a substantial subsidy to the domestic mining industry by making public mineral resources available virtually for the taking.¹²

Although the Mining Law did not authorize the Department of the Interior to refuse to permit mining because of environmental concerns, the Department has in practice been able to restrict environmentally damaging [8 ELR 10084] prospecting and mining on the public lands in two ways. Pursuant to broad legislative authorizations, the agency has "withdrawn" portions of the public domain from mineral exploration under the Mining Law and reserved them for other purposes.¹³ The Department has also gradually tightened its criteria for determining whether the mineral deposits covered by mining claims are "valuable" within the meaning of the statute.¹⁴ A "marketability" test for the presence of "valuable" minerals was approved by the Supreme Court in 1968.¹⁵ Essentially, it requires a climant to prove that the claimed deposit can be mined and marketed at a profit under current economic conditions.¹⁶ Failure to satisfy this test not only dooms the patent application, but also exposes the claim itself to invalidation and the claimant to ejectment.¹⁷ This danger of claim invalidation and consequent loss of possession has served to decrease the number of patent applications filed in recent years.¹⁸

Subsequent Legislative Modification

In addition to these administrative and judicial limitations on the right to prospect and patent, Congress has made a number of indirect modifications in the Mining Law's broad grant of entry and acquisition rights. The Mineral Leasing Act of 1920¹⁹ excluded coal, gas, oil, oil shale, and certain fertilizer mineral deposits from location and disposition under the Mining Law and instead established a royalty-leasing system under which the federal government may award leases for the extraction of these minerals through competitive bidding while retaining title to the land. In addition to the funds received through the lease sales, the government recaptures a percentage of the value extracted through royalty payments by the lessee. The Department of the Interior was given discretionary power to permit exploration and extraction on specific tracts or to prohibit such activities in favor of alternative uses. The agency was also authorized to attach conditions, including performance bonds, to any grant of exploration or development rights.

The Materials Disposal Act of 1947²⁰ and the Multiple Surface Use Act of 1955²¹ excluded from the reach of the Mining Law common varieties of certain building materials such as sand, gravel, stone, and pumice and provide instead for the sale of these materials to private parties at fair market value. The Multiple Surface Use Act also prohibits all uses of unpatented mining claims other than prospecting, mining, or processing operations.²²

The National Park System Mining Regulation Act of 1976²³ mandated that all existing unpatented mining claims within the borders of national parks be recorded with the Department of the Interior within one year or be conclusively presumed void.²⁴ The Act also gives the Department explicit authority to regulate activities on both patented and unpatented claims in national parks if "necessary or desirable for the preservation and management of those areas."²⁵ The Organic Act of 1897,²⁶ which governs administration of the national forests, likewise expressly subjects mining claims located within those areas to Forest Service regulations designed to preserve these forests from "destruction."²⁷

The Federal Land Policy and Management Act of 1976

The Federal Land Policy and Management Act of 1976,²⁸ commonly known as the Bureau of Land Management (BLM) Organic Act, is the most recent legislative expression of federal hard rock minerals policy and yet perhaps the least clear in its effect on rights under the Mining Law. Thisstatute enunciates strong general policies of multiple-use management of all public lands, retention of such lands in federal ownership except where a determination is made that disposal will serve the national interest, and payment of fair market value for private use of public lands and resources.²⁹ The Act disclaims any intent to amend the Mining Law of 1872 or impair rights derived under it, however, except in two specific respects.³⁰ The Act expressly requires that all existing unpatented mining claims located under the 1872 law be registered with the federal government within three years from the effective date of the Act and annually thereafter to show that they have not been abandoned.³¹ Claims located later than 1976 must be recorded by the end of the year following that in which the claim was made. This provision was designed to remedy the federal government's lack of knowledge³² of [8 ELR 10085] the number and location of existing mining claims on the public lands.

The other provision of the 1976 Act which applies to rights derived from the Mining Law gives the Interior Department the power to protect environmental values on public domain lands:

In managing the public lands, the Secretary shall, by regulation or otherwise, take any action necessary to prevent unnecessary or undue degradation of the lands.³³

In proposing regulations³⁴ to implement this authority, the Department took the position that the statutory provision did not change the non-discretionary nature of its mandate under the Mining Law to allow entry, location, and mining. The agency did assert, however, that prospectors, locators, claimants, and miners could exercise their rights under the Mining Law on unpatented claims where "consistent with Departmental regulations."³⁵ The centerpiece of the proposed regulations is a requirement for submission and approval of a plan before operations which will significantly disturb the surface of the lands can begin.³⁶ Implicitly, at least, this could be seen as empowering the Department to prohibit mining or large-scale prospecting by refusing to approve a plan of operations because of insufficient mitigation or reclamation measures. The exact scope of the Department's power under these proposals vis-a-vis persons asserting rights under the Mining Law is far from clear, however.³⁷

Federal Hard Rock Minerals Policy Issues

The fundamental question regarding federal hard rock minerals policy is whether such metallic minerals should continue to be treated differently from other minerals on public lands. The most obvious disparity in the treatment of these minerals is the rate of return to the public from private extraction of these resources. To exploit oil, gas, coal, oil shale, or the various fertilizer minerals lying in the public domain, a person must both be awarded a lease and pay a percentage royalty on the market value of the resources produced. To mine building materials such as sand, gravel, stone, and clay located on those lands, a private party must pay fair market value to the federal treasury. Hard rock minerals subject to location under the Mining Law, such as gold, silver, zinc, copper, and uranium, can be extracted from unpatented claims without any return to the public.Even if the miner seeks a patent, only a token purchase price must be paid.

The claim-patent system and the subsidy to hard rock miners and prospectors that results are based on the assumption that open access and low-cost acquisition are crucial incentives to private discovery and extraction of such public resources. Some analysts, however, have criticized this proposition on economic grounds, asserting that the current system may in fact deter public resource development. The hurried staking of claims by different persons around promising discoveries and the refusal of surrounding claim owners to sell at less than exorbitant prices can make it difficult to assemble tracts large enough for profitable mining.³⁸ These analysts have also expressed a fear that large mining interests have acquired and idled a high proportion of existing claims in order to reduce price competition.³⁹

The larger issue, though, is the current exemption of hard rock exploration and mining on the public domain from the federal multiple-use policies and environmental safeguards designed to minimize damage to the public lands. Numerous instances of severe environmental degradation caused by hard rock mining activities have been documented,⁴⁰ yet the Department of the Interior has done little to prevent such activities. The Department's proposed regulations under the Federal Land Policy and Management Act of 1976 would impose restoration requirements on prospectors and miners and would allow the agency to insert environmental conditions into the claimant's plan of operations.⁴¹ But the Department continues to assert a lack of authority to balance environmental impacts and multiple-use considerations against prospective economic benefits before allowing extensive exploration or extraction of a hard rock mineral deposit to take place.

Conservationist critics of the Mining Law view this lack of authority to deny claims for environmental reasons as the central deficiency in the current regulatory scheme. They also contend that the requirement of an annual $100 of work or improvements leads to much unnecessary scarring of the land. In their estimation, the question at this point is not whether these and other shortcomings must be remedied, but whether they can be solved by further ad hoc modifications to the existing regulatory scheme. The consensus among environmental advocates is that the defects can be remedied only by wholesale replacement of the current claim-patent system with a discretionary leasing regime such as that now in place for oil, gas, and coal.

Legislative Proposals

President Carter's call for hard rock mining policy reform in his 1977 Environmental Message signalled a [8 ELR 10086] revival of long-stalled congressional efforts to amend the Mining Law of 1972. Labeling the law "outdated and inadequate," the President characterized its chief deficiencies as the failure "to set forth clear authority for establishing environmental standards," to address "the need for balanced management of resources," or to provide for "any royalty return to the federal treasury."⁴²

In September 1977, the Administration submitted a bill to Congress as a prescription for these maladies. The measure, H.R. 9292,⁴³ would replace the claim-patent system with a royalty-leasing regime based on competitive bidding. It would also authorize the Secretary of the Interior to issue regulations setting performance and reclamation standards to protect the environment and would emplower him to make discretionary determinations, based on multiple-use considerations, whether to permit exploration or mining on public lands in particular cases. In addition, the bill would impose time limits on exploration and development.

H.R. 5831,⁴⁴ which has the support of the mining industry and Rep. Morris Udall (D.-Ariz.), Chairman of the House Interior Committee, takes the opposite approach. This measure revises rather than replaces the claim-patent system established by the Mining Law of 1872. The basic change it envisions is the addition of a royalty payment requirement to the current system. The measure would strengthen environmental safeguards, but it does not impose a multiple-use requirement and would not resolve the Interior Department's inability to deny access, claims, or patents for environmental reasons.

The House Interior Committee's Subcommittee on Mines and Mining is currently considering both bills, but H.R. 5831, possibly with strengthening modifications, is expected to be the vehicle that goes to the floor. The prospects for passage of any legislation on federal hard rock mining policy in this congressional session are clouded by an early adjournment that will almost certainly precede the mid-term elections this fall and a traditional lack of enthusiasm for tackling controversial issues in an election year.

Conclusion

The open access to hard rock minerals on public domain lands provided by the Mining Law of 1872 is clearly "one of the few remaining vestiges of our former national policy"⁴⁵ of adopting a laissez-faire attitude toward private exploitation of public resources. The Mining Law represents one of the last exceptions to multiple-use management of the public domain and one of the only instances where the heightened awareness in recent years of the need for strong environmental safeguards in federal programs has not taken hold. A series of ad hoc legislative, administrative, and judicial modifications in the Mining Law's broad grant of access and mining rights has not changed the fundamental inadequacy of the existing regulatory structure for protecting the remaining public domain lands against environmentally harmful activities.

In addition, the claim-patent system for private location and exploitation of hard rock minerals in the public domain, which requires only a token return to the federal treasury, presents an anomalous contrast to the royalty-leasing and market-value sale systems that govern federal disposition of other public resources. Economic analysts have also asserted that the claim-patent system has adverse effects on the rate and cost of hard rock mineral exploration and development on the public lands.

While these considerations indicate that the time has inceed come for legislative revision of federal policy regarding access to and extraction of hard rock minerals on the public domain, they do not point to universally acceptable solutions for all the deficiencies in the current regulatory structure. Granting the Department of the Interior discretionary power to permit prospecting and mining activities and imposing multiple-use requirements and strong environmental safeguards on such activity are necessary reforms, at a minimum. The economic effects of a wholesale changeover from claim-patent disposition to royalty-leasing with competitive bidding are not obvious, however, and may require further examination before final legislative action is taken.

1. 30 U.S.C. §§ 21-53.

2. "Public domain" lands are those which have never left federal ownership since their original acquisition from another sovereign. J. Muys, The Federal Lands in FEDERAL ENVIRONMENTAL LAW 494-95 (Dolgin & Guilbert eds. 1974). The public domain does not include lands acquired by the federal government from private owners for prescribed uses. See Rawson v. United States, 225 F.2d 885 (9th Cir. 1955), cert. denied, 350 U.S. 934 (1956).

3. Such "withdrawals" can be accomplished by specific legislation or by administrative action pursuant to broad legislative authorizations. See J. Muys, The Federal Lands in FEDERAL ENVIRONMENTAL LAW 496-97 (Dolgin & Guilbert eds. 1974). Discounting the temporary land withdrawals under the Alaska Native Claims Act, approximately 68 percent of the 743 million acres of land owned by the United States is open to hard rock mineral exploration and mining. COUNCIL ON ENVIRONMENTAL QUALITY, HARD ROCK MINING ON THE PUBLIC LAND 1 (1977).

4. The Environment — The President's Message to the Congress, 7 ELR 50057, 50063 (May 23, 1977).

5. 30 U.S.C. § 22, ELR STAT. & REG. 41410.

6. 30 U.S.C. § 28. There is no requirement in the Mining Law that claims be recorded with the federal government, however.

7. Id.

8. 30 U.S.C. § 26.

9. 30 U.S.C. §§ 23, 35.

10. 30 U.S.C. § 29.

11. Id.

12. R. Anderson, Federal Mineral Policy: The General Mining Law of 1872, 16 NAT. RES. J. 601, 618 (1976).

13. COUNCIL ON ENVIRONMENTAL QUALITY, HARD ROCK MINING ON THE PUBLIC LAND 13 (1977); J. Muys, The Federal Lands in FEDERAL ENVIRONMENTAL LAW 496-97 (Dolgin & Guilbert eds. 1974).

14. J. Muys, supra note 2, at 525.

15. United States v. Coleman, 390 U.S. 599 (1968).

16. Barrows v. Hickel, 447 F.2d 80, 83 (9th Cir. 1971) (marketability cannot be based upon speculation that mining and sale will be profitable at some future date).

17. United States v. Coleman, 390 U.S. 599 (1968).

18. R. Anderson, supra note 12, at 604.

19. 30 U.S.C. §§ 181-263.

20. 30 U.S.C. § 601, ELR STAT. & REG. 41411.

21. 30 U.S.C. §§ 611-615.

22. Id. § 612(a). There is evidence that many unpatented mining claims have been used for purposes totally unrelated to mining. See R. Anderson, supra note 12, at 605.

23. 16 U.S.C. §§ 1901-1912, ELR STAT. & REG. 41456.

24. Id. § 1907.

25. Id. § 1902.

26. 16 U.S.C. §§ 478, 551.

27. In 1974, the Forest Service exercised this authority and promulgated rules governing mining claims in national forests. 36 C.F.R. Part 252, 39 Fed. Reg. 31317 (Aug. 28, 1974). These regulations require the filing of a plan of operations prior to significant prospecting or mining activity, but do not specifically provide for denial of permission to explore or mine because of possible environmental harm. Mining cannot proceed, of possible environmental harm. Mining cannot proceed, however, until the required plan has been filed. United States v. Curtis-Nevada Mines, Inc., 415 F. Supp. 1373, 6 ELR 20715 (E.D. Cal. 1976).

28. 43 U.S.C. §§ 1701-1782, ELR STAT. & REG. 41458.

29. Id. § 1701.

30. Id. § 1732(b), ELR STAT. & REG. 41466.

31. Id. § 1744, ELR STAT. & REG. 41468.

32. See FTC BUREAUS OF COMPETITION AND ECONOMICS, REPORT TO THE FEDERAL TRADE COMMISSION ON FEDERAL ENERGY LAND POLICY: EFFICIENCY, REVENUE, AND COMPETITION 671-72, 685 (1975), reprinted at request of SENATE COMM. ON INTERIOR AND INSULAR AFFAIRS, SERIAL NO. 94-28, 94TH CONG., 2D SESS. (Comm. Print 1976); R. Anderson, supra note 12, at 602.

33. 43 U.S.C. § 1732(b), ELR STAT. & REG. 41466.

34. 43 C.F.R. § 3809 (proposed), 41 Fed. Reg. 53428 (Dec. 6, 1976).

35. Id. § 3809.0-6, 41 Fed. Reg. at 53429.

36. Id. §§ 3809.2-1, 3809.2-4, 41 Fed. Reg. at 53430. Failure to file such a plan would be grounds for injunctive relief against mining activity. United States v. Curtis-Nevada Mines, Inc., 415 F. Supp. 1373, 6 ELR 20715 (E.D. Cal. 1976).

37. The agency is still analyzing the voluminous public comments on its proposed regulations. It should be noted that the Mining Law of 1872 has been held not to preempt state regulation of mining activities on federal lands which is aimed at minimizing environmental degradation. Stat ex rel. Andrus v. Click, 554 P.2d 969, 6 ELR 20805 (Idaho Sup. Ct. 1976); State ex rel. Cox v. Hibbard, 570 P.2d 1190, 8 ELR 20127 (Ore. Ct. App. 1977).

38. REPORT TO FEDERAL TRADE COMMISSION, supra note 32, at 675-76; R. Anderson, supra note 12, at 606.

39. REPORT TO FEDERAL TRADE COMMISSION, supra note 32, at 684-85; HARD ROCK MINING ON THE PUBLIC LAND, supra note 13, at 31-32.

40. HARD ROCK MINING ON THE PUBLIC LAND, supra note 13, at 14-18.

41. 43 C.F.R. §§ 3809.2-5, 3809.3-2 (proposed), 41 Fed. Reg. at 53431, 53432.

42. The Environment — The President's Message to the Congress, 7 ELR 50057, 50063 (1977).

43. 95th Cong., 1st Sess. (1977) (introduced by Rep. Burton (D-Cal.)).

44. 95th Cong. 1st Sess. (1977) (introduced by Rep. Ruppe (R-Mich.)).

45. R. Anderson, supra note 12, at 613.