Scratching the Surface on Mining Law History

Jan 30, 2024 | Business, Natural Resources, Smith + Malek

Geopolitical issues and the future of alternative energy have continued to push the business of mining into the forefront of our economy. As a business firm with transactional, litigation and real estate practice areas, we are uniquely positioned to leverage our teams’ knowledge in the ever-evolving realm of mining law. 

Since mining impacts multiple areas across the West, including Idaho where two of our offices are located, we want to highlight some lesser-known facts about mining.

Mineral Right Ownership

In the United States, most privately owned land includes the minerals below the surface. The ownership of mineral rights is somewhat unique in the world. For example, in other countries, the mineral rights are “reserved” to the “sovereign” or government. In colonial times, the minerals were reserved to the Crown. 

When the original 13 colonies achieved independence, those colonies acquired the mineral rights if they had not been previously conveyed to private owners. Then, when other states were added to the Union, they also acquired the mineral rights unless they were expressly retained by the federal government. However, in most cases, when land was sold, the mineral rights were sold along with the surface rights.  

If both the surface rights and the mineral rights are sold, then the ownership is in a “split estate.” The owner of the mineral rights has the right to go onto the land and mine it. 

In 1872, the federal government passed the Mining Law of 1872, which declared all valuable mineral deposits in land belonging to the United States to be free and open to exploration and purchase. In most cases, this involves mining on land owned by the federal government. However, in some cases, the surface rights are privately held, and the mineral rights are owned by the federal government. In that situation, the minerals are open to exploration. 

“First in Time, First in Right” Real Property Principle

The Mining Law of 1872 governs how a person acquires the right to mine minerals owned by the federal government. It is relatively easy for any U.S. citizen to “stake a claim” and mine; all you have to be is the first person to stake the claim, and then maintain that claim. The practice harkens back to a fundamental principle in law: “first in time, first in right.”

Stake Your Mining Claim(s) on Federal Land

Today, any U.S. citizen can stake a claim on federal land by putting posts into the ground and paying fees of less than $300. Claims are 600’ wide and 1,500’ long and remain valid as long as the owner pays a  $165 annual fee. The land can be named as the owner wishes, and they can sell or lease it. 

Exploration, Junior, and Major Players

There are three categories of mining companies: exploration, junior, and major.

Exploration companies stake claims where they think a mineral of value may be. Once they’ve secured claims, a junior mining company, which tends to be small or newly established, gets involved in the exploration and early-stage development of mineral resources. If the contents of sample cores show promise, a major company will likely buy the junior position, and enter into a joint venture agreement.

The Deliberate Path to Responsible Mining

The process of opening a mine responsibly is an arduous undertaking that can take a couple of decades. The primary cause of the long time horizon to open a new mine is permitting and litigation. 

Federal and state permitting, environmental quality issues, and negotiations with Tribes – who have a major interest in what takes place on the land and in the rivers – are all steps along the path of determining an operational mine.

We understand that mining has caused irreparable damage to the environment. Today’s environmental regulations are more stringent and, depending on the site, require environmental repair, a permitting process we proudly stand behind. 

If you’re curious about how we assist mining companies, contact us.