Mineral Property Management

Introduction

This section in the division maintains the records for mineral property rights established under state laws and regulations. The timely maintenance of property right records is fundamental to the mineral industry operating. Property right records must be current and up-to-date for title purposes so that the mining industry can operate. Financing and permitting of mining operations is dependent upon having active locations in the records to the area of interest. No mining activity can be permitted without this. In maintaining the records, the section maintains and administers an annual average of about 50,000 mining claims and leasehold locations, 6,000 prospecting sites, 75 upland mining leases, 44 coal leases (same as FY '99), and 32 offshore mining leases. The section also issues courtesy billings and performs audits to assure 6(i) revenues are paid to the State. The revenue collection is over $2.1 million for locatable mineral properties and is approximately $1.5 million for coal.

About 92 percent of the 91 million acres that the state has received title to so far is open to mineral entry and the acquiring of mineral rights by staking mining locations. Upon discovery, mining rights on these state-owned lands are acquired by locating or staking a mining location in a similar way to staking a mining claim on federal lands. Like federal mining law, Alaska mining laws provide for nonexclusive access to State-owned lands for prospecting, an exclusive right to develop a discovery, and security of tenure. A mining location may be staked for any locatable mineral (all metallic and most nonmetallic industrial minerals) under Alaska mining law.

Under Alaska mining laws (AS 38.05.185-275) and regulations (11 AAC 86.100-600) (links: AS 38.05.185-275 and 11 AAC 86.100-600), there are three general kinds of mining locations: mining claims, leasehold location and prospecting sites.

Mining claims may be located by what is know as aliquot part legal description, which is meridian, township, range, section, quarter section, and if applicable quarter-quarter section. These claims are known as MTRSC locations, and they are generally located using GPS latitude and longitude coordinates. A quarter section location is typically about 160 acres in size, and a quarter-quarter section location is typically 40 acres in size. Rent for the larger size is always four times greater.

You may download the MTRSC location certificate here. In addition, traditional non-MTRSC locations may be located. These are not restricted to precise aliquot part quarter or quarter-quarter section areas, and generally overlap these dividing lines on the maps. These locations may be any size up to 1,320 feet by 1,320 feet (40 acres) with the claim lines running in the cardinal directions. You may download the traditional or non-MTRSC location certificate here. Traditional or non-MTRSC locations may be converted to MTRSC locations at any time using a conversion location. You may download this certificate here.

Upon processing a new location, the state may classify the location as a leasehold location (explained below). Prior to discovery, a locator may also locate a prospecting site which grants exclusive prospecting rights for a term of two years, and exclusive right to convert to a claim upon discovery (explained below). You may download a prospecting site certificate here. A discovery is required in order to stake a valid mining claim or leasehold location. A discovery means that locatable minerals have been found and the evidence is of such a character that an ordinarily prudent person would be justified in expending further time, labor and money upon the property with a reasonable expectation of developing a paying mine.

The primary difference between a mining claim and a leasehold location is that a mining claim gives an owner an immediate property right to mine a mineral deposit whereas a leasehold location must be converted into an upland mining lease before mining operations can begin. State lands are designated for leasehold location only if there may be other valuable resources present or if the surface has already been leased or sold for other uses. Converting a leasehold location to a lease is done to mitigate other resource use conflicts that may exist, and to provide for exclusive mineral title from other competing mineral locators. A mining lease will likely contain stipulations to reduce or resolve potential conflicts between mining and competing resource uses. There are fees to apply for a lease and processing takes about three months. Further information about converting a claim or claims to an upland mining lease is available from the factsheet.

One of the main duties of the section is to establish case file and database records for new locations and convert some existing mining claims where mining production is getting ready to occur to upland leases. Leases are becoming more important for the large mineral developments because of more secure mineral title tenure needed for financing development. The processing of new mining claims and prospecting sites varies with metal prices and the announcement of discoveries. Staking ranges from a low of around 6,000/year to a high of around 15,000+/year.

Another main duty of the section is to perform billing and tracking of rental payments and recorded annual labor affidavits for updating records for claims and leases which are required by state laws and regulations. The form for filing an affidavit of annual labor may be downloaded here. Incorrect or untimely payment of rental, or untimely recording of an affidavit of annual labor causes automatic abandonment of claims by operation of law. As a result, this task also involves several dozen appeals resulting from location abandonment and preparing director/commissioner level appeal decisions and certificates of substantial compliance for locations reinstated as a result of the process, or in some instances court records for appeals beyond the administrative level. With increased claim staking, the number of billable claims has increased from less than 20,000 in FY'96 to an estimated 50,000 in FY'00. This and escalating rentals have boosted 6(i) revenue over $1.5 million/annually.

Another duty performed by this section is to process quit claim deeds, leases, operating agreements and address changes for holders of mineral property as required under state law. This task keeps mineral property records up to date with "current holder" information so that notice of regulatory or law changes, official bills and correspondence are sent to correct mineral property owner. The form for transferring ownership for locations, other than leases, is the Quit-Claim form (QCD) which can be downloaded here.

Another duty performed by this section is to process royalty filings from producing metal mining operations on state-owned land after notifying base and precious metal mineral property owners/operators that production royalty payments are due by sending royalty return forms to producers on state land, processing returns, and performing audits of the large lode mines and spot audits of some of the smaller placer mines.

Another duty is to review the annual requirements and process the correct rental and bonding for 40 coal leases, and process the filings for coal mining on state coal leases along with performing audits for payment of correct royalty.

Another duty is to process applications received from mining companies conducting exploration in the state with costs in excess of $250,000/annually and required to be filed due to property transfer, technology approval, or a decision to develop a mine. In addition, section tracks 113 certified applications with a total certified tax and royalty credit of $30 million+.

Another duty is to work with the federal mining claim holders and the mineral industry in accelerating the transfer of federal claim blocks deemed valuable and significant to the state. Priority transfer requests give special attention where mineral exploration, development and production opportunities can be enhanced when the state is the landlord.

Work with the metal and coal industry in conducting lease disposals in mineralized areas of interest for coal and offshore locatable minerals by conducting best interest findings. With the high metal prices for PGM metals and rare earths, the next disposal will likely be will likely be for these minerals.

Work with the mining industry and legislature in revisions to the mining laws and regulations to meet the need of the changing industry.