Leasable, Locatable and Salable Minerals
Federal minerals are not acquired one way. Three regimes sit side by side, each with its own statute, its own instrument and its own price, and the first question in any project is which of the three governs the deposit under the ground.
The rule in short
Federal minerals fall into three acquisition regimes. Locatable minerals are claimed under the General Mining Law by discovery and location. Leasable minerals, chiefly the fuels and certain chemical minerals, are leased under the Mineral Leasing Act for bonus, rent and royalty. Salable mineral materials such as sand, stone and gravel are sold at appraised value under the Materials Act. The classification decides who may hold the deposit and what the United States is paid for it.
Everything the United States owns beneath the surface of the public lands was once available on the same terms: find it, stake it, keep it. Two statutes broke that arrangement into three, and the fragments do not fit together tidily. Whether a deposit is located, leased or bought is now the threshold question in any federal mineral project, and it is answered by the rock, by the land status and occasionally by litigation.
The original regime and its carve-outs
The General Mining Law opened valuable mineral deposits in the public lands to exploration, occupation and purchase by citizens. It drew no distinction between gold, coal and gravel, and for half a century all of them were located the same way.
The first carve-out came with the Mineral Leasing Act, which pulled the fuels and several industrial minerals out of location and put them into a leasing system administered by the Secretary. The second came with the legislation excluding common varieties of sand, stone, gravel, pumice, pumicite and cinders from the meaning of a valuable mineral deposit, sending them to the disposal system created for mineral materials. What remains under the 1872 law is the residue: the hardrock minerals, chiefly the metals and a set of industrial minerals, on public domain land still open to entry.
Minerals that are located
Gold, silver, copper, lead, zinc, uranium on public domain land, and a range of industrial minerals with distinct and special value are located by discovery and staking rather than granted. The claimant holds a possessory interest, pays an annual fee, and owes the United States nothing on production. Procedurally this is the strangest of the three regimes, because the interest arises from the claimant's own act rather than from any federal decision, which is worked through in the mechanics of locating an unpatented claim.
The list of locatable minerals has no statutory text behind it. Congress never enumerated what remained, so the category is defined by subtraction: whatever was not moved to leasing and not excluded as a common variety. The Department fills the gap through decisions of the Interior Board of Land Appeals, which have addressed borderline materials one at a time — building stone, limestone of unusual purity, certain clays, decorative rock. The result is a body of administrative case law rather than a schedule, and a project sitting near one of those boundaries generally cannot resolve its classification without asking the agency in advance.
The claim's weakness is that it is only as good as its discovery. The United States may contest validity at any point, and it does so most often when a claim stands in the way of a land exchange, a withdrawal or a competing use. Maintaining tenure between contests is a matter of paying the annual fee or certifying a waiver on time.
Minerals that are leased
Coal, oil, gas, oil shale, phosphate, sodium, potassium, sulphur in the states the Act names, and gilsonite are leasable, with geothermal resources leased under their own legislation. The government decides whether to offer the resource at all, and that discretion is the defining feature of the regime. There is no right to a lease.
Money moves in three ways. A bonus is paid to win the lease, ordinarily by competitive bid. Rent is paid annually per acre while the lease is held. A royalty is paid on the value of production, with statutory floors for some minerals and regulatory rates for others. Leases carry diligence obligations, so a lessee cannot simply hold ground; the coal system is the most elaborate example, described in competitive coal leasing and the logical mining unit.
An operator who wants gravel cannot make it locatable by planning a high-value application for it, and an operator who finds a genuinely uncommon deposit does not lose the claim because the material is ordinarily sold as aggregate. The inquiry runs to the properties of the deposit itself and to whether those properties command a premium in the market.
Materials that are sold
Sand, stone, gravel, cinders, clay and similar construction materials are disposed of by sale. The agency appraises the material, sells it under a contract or permit at fair market value, and may set aside community pits and common use areas where the public takes small quantities. Free use permits are available to government bodies and certain nonprofit entities, which is how counties get road base without bidding.
The boundary between salable and locatable is the most litigated line in the whole scheme, because a deposit with distinct and special value escapes the common variety exclusion and returns to location. That test is worked through in the treatment of sand, gravel and the uncommon variety problem.
Comparing the three regimes
The categories are easiest to keep apart by what the government controls in each.
| Regime | Governing statute | How the interest arises | What is paid to the United States |
|---|---|---|---|
| Locatable | General Mining Law of 1872 | Discovery and location by the claimant | An annual maintenance fee only |
| Leasable | Mineral Leasing Act of 1920 and related acts | Agency offering, competitive bid or application | Bonus, annual rental and production royalty |
| Salable | Materials Act of 1947 | Contract of sale or free use permit | Appraised value of the material removed |
| Acquired lands minerals | Leasing legislation for acquired lands | Lease, whatever the mineral would otherwise be | Lease terms, with revenue sharing rules of their own |
Two complications sit on top of the table. Where the United States owns minerals under private surface, the operator holds a federal interest and a private landowner holds the ground above it, and the accommodation between them is governed partly by federal terms and partly by the state law of severed mineral estates. And where the surface is held in trust for a tribe or an allottee, none of these three regimes applies; mineral development proceeds under Indian mineral legislation with the tribe as lessor. The first step in any project is therefore not a geological question at all. It is a title question, answered from the land status records before a drill is moved.
Points to carry away
- Locatable minerals are acquired by the claimant's own act of discovery and location, with no royalty owed to the United States.
- The Mineral Leasing Act moved coal, oil, gas, phosphate, sodium, potassium and several other minerals out of location and into leasing.
- Leasable minerals produce revenue through bonus bids, annual rental and a production royalty.
- Salable mineral materials are disposed of by sale at appraised fair market value or by free use permit to qualifying entities.
- The Common Varieties Act removed ordinary sand, stone, gravel, pumice, pumicite and cinders from location.
- Land status matters as much as mineral type, because acquired lands and reserved mineral estates follow different rules.
Questions readers ask
Can one parcel contain minerals from more than one category?
Routinely, and it is the ordinary source of conflict. A parcel may carry a locatable gold-bearing vein, a leasable coal seam below it and salable gravel in the wash across the surface, each governed by a different statute and each capable of being held by a different party. The agency manages the overlap through the terms it writes into leases and plans of operations, and through stipulations that require one operator to accommodate another. Priority in time carries weight but does not exclude the later interest.
Does the United States receive a royalty on hardrock production?
Not under the General Mining Law. A claim holder pays the annual maintenance fee and keeps the proceeds of production, which is the single largest structural difference between the locatable regime and the other two. Royalty proposals for hardrock minerals have been introduced in Congress many times and none has been enacted. Reclamation costs are secured by financial guarantees rather than by a share of revenue, so the public return on locatable minerals comes from taxation and from the fee, not from the ore.
What governs minerals under land the United States bought rather than retained?
Acquired lands are outside the General Mining Law. Minerals in ground the United States purchased or received by donation, including much national forest land in the East, are leased under separate legislation extending the leasing system to those lands, whatever the mineral. That is why an operator may locate a claim on public domain forest land in one state and be told to seek a lease for the identical mineral a few hundred miles away. Land status is checked before mineral character, not after.
Sources
- Cornell Legal Information Institute — 30 U.S.C. 22, Lands Open to Purchase by CitizensThe locatable regime and the minerals still open to claim.
- Cornell Legal Information Institute — 30 U.S.C. 181, Lands Subject to Mineral LeasingThe list of leasable minerals and the lands the leasing system reaches.
- Cornell Legal Information Institute — 30 U.S.C. 601, Disposal of Mineral MaterialsAuthority to sell common mineral materials and to grant free use.
- Cornell Legal Information Institute — 30 U.S.C. 611, Common Varieties ExcludedRemoves ordinary sand, stone, gravel and similar deposits from location.
- Cornell Legal Information Institute — 30 U.S.C. 612, Surface Use of Unpatented ClaimsLimits claim surface use and reserves other resources to the United States.
- Cornell Legal Information Institute — 43 CFR Part 3600, Mineral Materials DisposalSale contracts, free use permits and community pits for salable materials.
- Bureau of Land Management — Mining and Minerals ProgramThe agency's description of the three federal mineral programs.
Justice Partners Journal is a publication, not a law firm. This article states general rules and cites its sources; it is not advice about any particular case, and the law differs by state and changes over time.
