PrintLesson 2.3: The General Mining Law of 1872 (as amended)
We discussed the categories of laws that affect mining in the last lesson and took note of important examples of laws within those categories. Engineers working in the mining industry will often need a working knowledge of a few of these laws, particularly those related to mine safety & health, and the environment. The Mining Law of 1872, which is the subject of this lesson, applies primarily to the earliest stages of mining – obtaining the rights to prospect on public lands and then obtaining the rights to mine. It is considered a mandatory topic for mining engineers, and it is not unusual for a question on the P.E. exam to focus on this topic. It may surprise you to learn that the Law, as amended, is relevant today and quite controversial!
The General Mining Law of 1872 authorizes and governs the prospecting and mining for economic minerals on federal public lands, and the U. S. Bureau of Land Management (BLM) is the federal agency responsible for administering the Law.
The law has a rich and somewhat convoluted origin, having evolved from earlier legislation that was more about paying off war debts (Civil War) than fostering mineral development. All that aside, the Law was designed to codify orderly processes for acquiring and protecting mineral claims. The primary goal was to address the chaos and violence that was occurring in the mines and mining camps, particularly in Nevada and California. Prospectors and miners would fight over who had the rights to work a parcel of land. Miners from two different camps would be deep underground following a vein of gold, for example, when suddenly their underground workings would intersect. A dispute would quickly arise over who had the right to mine this vein, and such disputes were settled with guns, not lawyers! Thus, the primary goal of this federal law was to establish a set of uniform procedures to address these ambiguities.
A second unstated but likely goal was to promote settlement of the new lands in the West. As you will see, the Law gave options for outright ownership of land.
Over the years, there have been a few important amendments to the Law, and we’ll discuss those, but let’s start with the provisions of the original law first.
The salient elements of the Law are as follows.
All U. S. citizens 18 years of age or older have the right to locate a lode or placer claim on federal public lands that are open to mineral entry.
What does this mean?
- The first and last parts are easy: you have to be a U. S. citizen of a certain age to participate, and it applies only to federal public lands that are open to mineral entry. We know which lands are considered federal public lands from Lesson 2.2. A qualification that we didn’t make then, but need to make now, is that not all public land is open to mineral activity, i.e. mineral activity is prohibited on some federal public lands such as military bases and national parks. Ok, but what about the middle part –a lode or placer claim?
- At the time this law was written, there were two recognized types of mineral deposits: a lode, which is a hard rock vein, e. g. gold or silver; and a placer, which is a gold or silver-bearing sand or gravel, often in the form of a streambed.
The centerpiece of the law is the claim.
A mining claim is the right to explore for and extract minerals from a tract of land. The Law set the maximum size of a lode claim at 600 feet x 1500 feet, and the maximum size of a placer claim to be 20 acres. The Law also established a tunnel site, and this gave the holder rights to any lode found within 3000 feet of the entrance to the tunnel. Finally, the Law established mill sites, which cannot be on mineralized land, must be used for mineral processing, and can be up to 5 acres in size. There are a few other nuances and qualifiers to this, but the key points for you are to know are the definitions of claim, lode, and placer. There is no reason for you to remember the exact sizes of these claims.
The Law defined locatable minerals, i. e. the types of minerals that could be claimed under the law: gold, silver, cinnabar, copper, and other valuable deposits. The named minerals reflected the ones of note at the time the Law was written but also allowed for other valuable commodities to be claimed.
Extra-lateral rights allowed the owner of a claim with an outcrop to follow and mine that vein to wherever it led, including underneath other claims. This provision was also known as the law of the apex.
These mineral veins would often intersect the surface of the land, i.e. there would be an outcrop. It is likely that the vein would dip and go underground, and would continue for a considerable distance. This provision gives guidance on who has the right to mine the vein.
Claim staking is the required procedure of marking the boundaries of the claim and recording it; hence the expression “to stake a claim. ” The exact procedures for staking the claim may vary slightly from state to state.
All mining claims are initially unpatented claims and only give the right to explore and mine. These rights exist for as long as active work is underway each year. If active work ceases, the claim is dissolved and the land reverts back to the public domain. The Law defines active work on an annual basis as: at least $100 of labor shall be expended or $100 of improvements shall be made.
The Law defined a process by which the owner of a claim could patent the claim. Patents are deeds from the federal government for the claim. The holder of an unpatented claim can apply for a “patent” by making an application and paying $5 per acre for a lode claim or $2. 50 for a placer claim.
The owner of a patented claim can put the land to any legal use, and there is no requirement for active work on a patented claim. In other words, once the claim holder has a patent on the claim, the land can be used for farming, for building a house or a hotel, and so on. Literally, the land is owned (deeded) and can be used for any legal purpose! In more recent times, this provision of the Law has become controversial, but we’ll discuss that later.
The General Mining Law of 1872 worked well into the beginning of the 20th century when the Law effectively enabled a major oil rush in the West. You’ll recall that oil and natural gas are considered minerals, and they met the criteria of “other valuable minerals” under the Law. Tracts of land were being gobbled up so quickly that by 1909, President Taft intervened by executive order, withdrawing over three million acres of public lands. Ultimately, Congress crafted a permanent solution in the form of the Mineral Leasing Act of 1920.
This Act explicitly excluded certain minerals as “locatable” under the 1872 Law and required that the rights to these excluded minerals be obtained only by leasing. The minerals that can only be accessed through a lease are oil, natural gas, and other hydrocarbons, coal, phosphate, potassium, sodium, and sulfur.
The Mineral Leasing Act of 1920 and an amendment in 1947 specified the details of the leasing program, including the number of acres that can be leased, payments to the government, the lease period, and bidding procedures. These parameters are different for different minerals. The lease periods are typically 10 or 20 years, and there are provisions for renewals of 10 or 20 years. The payments to the government consist of three components:
- Bonus, which is paid upon award of the lease, and the normally the lease is awarded to the bidder who will pay the largest bonus;
- Rental, which is an annual charge of typically a few dollars per acre; and
- Royalty, which is a percentage of the gross value of the commodity, typically on the order of 10%.
Over the 30 years, there have been no less than 35 amendments to the Mineral Leasing Act, but the substantive points outlined here remain unchanged. Amendments and attempted amendments to this Act are ongoing for a couple of reasons. First, the revenue from the leases into the U. S. Treasury is significant, and mineral leases are an attractive target for legislators looking for new sources of revenue to fund spending on their projects; and tinkering with the leasing process can facilitate or impede mining activity on federal lands. Certain pro-mining changes to the lease parameters for potassium, for example, could result in an increase in potash mining; whereas increases in lease costs or restricted bidding for coal leases could reduce coal mining on federal lands, which might serve the interests of those opposed to fossil fuel production. Notwithstanding, the Mineral Leasing Act of 1920 as amended, generates significant revenue for the federal government, and provides a reasonable climate for mining companies to produce minerals in a competitive marketplace.
The Bureau of Land Management (BLM) is the federal agency with the primary responsibility to operate the leasing program.
There are three other amendments to the general Mining Law of 1872 that deserve mention here. An amendment in 1954 provided for multiple minerals to be extracted from a claim, and another in 1955 withdrew the common minerals of sand, gravel, and cinders from the list of locatable minerals. Finally, in 1976 the Federal Land Management Act was passed, with a primary purpose of reducing the destruction of the land surface of mining claims by requiring reclamation permits, and federally approved plans before the surface could be disturbed. It also strengthened claim recording and abandonment procedures.
The General Mining Law of 1872 as amended enables individuals or companies to obtain the rights to prospect and mine on federal public lands. The 1920 amendment removed certain minerals from the list of locatable minerals under the Law, and established a leasing program for access to the specific minerals covered under this Mineral Leasing Act of 1920. Although this Act has been tweaked over the years with amendments, the current leasing programs administered by the BLM are relatively unchanged. The 1976 amendment, the Federal Land Management Act established the first environmental protection for the surface of land tracts acquired on federal public lands, by requiring reclamation permits and approved plans prior to the initiation of any mining activity.
Finally, I want to close this lesson by calling your attention to an important change that occurred in 1994 –a change that occurred not to the law via an amendment, but rather a change enforced by a congressional budget action.
Unforeseen or changing circumstances led to abuses or unintended and undesirable consequences of the 1872 Law. For example, the oil rush was noted as the main cause of the 1920 amendment. It became increasingly evident in the 1980s and early 1990s that some entities were acquiring large tracts of valuable real estate by filing claims, patenting those claims, and then using the land for real estate development and other commercial but non-mining activities. Remember that once a claim is patented, the holder owns the land and can use it for any legal purpose. It is said, for example, that much valuable real estate around Las Vegas was acquired for the few dollars required to obtain a patent. Clearly, this is an abuse of the Law’s intent.
Congress wanted to eliminate this practice, but there was no agreement to the content of a new amendment. Instead, they used a procedural tactic to accomplish their goal of eliminating the abuse, without writing an amendment. They added language to the appropriation bill for the Department of the Interior that prohibits the use of appropriated funds by the BLM to process and award claim patents! As a result of this, BLM has been unable to award a single claim patent since 1994, and will not be able to do so, until Congress removes that budget restriction! This tactic is used from time-to-time, and there are other mining examples. Consequently, it is worth spending a few minutes to explain this tactic in a bit more detail.
It is often said that Congress controls the purse strings, i.e. Congress appropriates the funds for the administrative agencies in the Executive Branch of the government. If Congress likes something that an agency is doing or proposing to do, it can “reward” the agency by appropriating more money for their budget. On the other hand, if Congress disapproves of an agencies behavior in some regard, it can reduce that agency's budget. Congress can even prohibit an agency from using the money in their budget, i.e. the funds that Congress appropriated, for a specific purpose. Since the employees of the agency are paid with appropriated funds they could not legally do whatever Congress is prohibiting. It’s a very effective tool! So, in the budget for fiscal year 1994, Congress added the language that effectively stopped the abuse by preventing the issuing of patents under the 1872 law. This appropriations language has been included in every budget since 1994.
The General Mining Law of 1872 as amended has been controversial at different times, and as described previously, there were unforeseen consequences or even abuses; and in the end, Congress dealt with them by amending the Act or more recently by exercising its budget authority. Nonetheless, critics still abound and fall into two groups: those that seek to eliminate mining in the U. S.; and those who see the mining industry as a further source of cash to fund various federal programs. Attempts to write a new law to essentially replace the 1872 law have been undertaken in Congress, but cannot garner enough support to move out of committee or to be taken up by both houses of Congress. As I recall the last major attempt at new bill was in 2009. In any case, as a future professional working in the mining industry, you should have an awareness of the issue. The economic and policy arguments brought forth by the critics boil down to the following four criticisms:
- The law is hopelessly outdated.
- The mining industry is acquiring valuable real estate at prices well below market value.
- Mining claims are often used as a subterfuge to secure land for other purposes.
- The government is giving away valuable minerals for free and simultaneously depleting the supply for future generations.
The first three are unsupported by the facts, which is to say they are fallacious. For your needs in this course, these are refuted as follows:
- Not True. There have been major amendments, in 1920, 1955, 1976, as well as dozens of amendments to tweak the Law and keep it relevant.
- Historically True, Presently False. Land developers, among others, used the Law to obtain patented claims on tracts of common minerals such as stone and gravel; and once they had the patent, or a sufficient number of contiguous patents, they built hotels and other commercial enterprises. The amendment in 1955, i. e. the Multiple Surface Use Mining Act of 1955, curtailed this practice by removing common minerals from the list of locatable minerals in the Law of 1872. This did not completely eliminate the subterfuge, however. Congressional budget action in 1994 was needed to put an end to this abuse.
- False. See #2
- Misleading, and Largely False. The arguments to support and to refute this are very technical. There are solid economic reasons against imposing a royalty structure, although there are small changes that could be made to the financial paradigm that would benefit government without unduly harming the industry. Perhaps the most misleading of the arguments is that the company gets the minerals for free. Strictly speaking, they do get access to the minerals for only a few dollars per claim. However, the mine will generate millions of dollars in tax revenue for the local, state, and federal governments, as well as create jobs and markets for supporting industries. The notion that adequate mineral resources will be unavailable for future generations is a completely unsupported and somewhat absurd assertion given the vastness of mineral resources.
Much has been written on the subject, and on all sides of the subject! I find that an older paper, authored by a well-respected mineral economist from Penn State, provides much-needed clarity on the topic. The paper is available online, and here is the citation:
"Two Cheers for the 1872 Mining Law," Richard Gordon and Peter Van Doren. Cato Institute, Policy Analysis Paper No. 300, April 9, 1998.
There is a clever bit of wordplay in the title of this paper. As many of you know, the expression in English is “Three Cheers for __________” and you fill in the blank for whatever you are toasting or cheering. So, why give only two cheers for the 1872 Law? In the end, the authors conclude that there are a few changes that would improve the Law, and if they can be made, great; but if not, leave the Law alone, because it is not so bad!
This brings us to the end, not only of our examination of the General Mining Law of 1872, but also this Module. We began in Lesson 2.1 with a description of the life cycle of a mine, and this helps us to understand how the pieces fit together. We then described the body of laws that affect mining, with an emphasis on ones that impact the regular activities of engineering professionals working in the industry.
In subsequent modules we’ll take a closer look at the individual stages of the life cycle, beginning with the Prospecting and Exploration Stages in the next module.