Post on 19-Jan-2016
Minerals Leasing Act of 1920
• Effected Minerals– Oil and Gas (Major use of act)– Sulfur in New Mex. And Louisiana– Coal– Native Asphalt, Gilsonite, Oil Shale, Tar
Sands– Potassium, Sodium, Salt– Phosphate
Obtaining Leases
• Government puts lands with known or believed mineral value out for lease– has a preset minimum for the lease
• Hold Competitive Sealed Bids for Leases
• Leases run for 20 years
Leases on Unknown Deposits
• Individuals may apply for prospecting permits on Federal Lands– Must share findings with government but
need not make them public– With non-coal prospector has first right to a
lease if they meet government minimums set for ground
– Coal can call land up for bid (since they know what is there they have advantage)
Lease Limitations
• Limitations on Acreage– Coal 46,080 acres per state and 100,000 acres
total– Sodium 5120 acres total– Phosphate 20,480 total– Sulfur 3 leases of 640 acres per state– Potassium 25,600– Oil Shale 5120 acres– Tar Sands 245,080 per state
Annual Rental Costs
• Land Rentals on leases– Coal at least $3/acre year (can be more)– Phosphate, Potassium and Sodium 25
cents/acre year 1rst year, 50 cents second, $1 there after
– Sulfur 50 cents/acre year– Non-Coal or Hardrock $3/acre year starting
6th year
Royalties on Leases
• Coal– Surface Mined - not less than 12.5% of
value of coal– Underground - not less than 8%
• Phosphate and Sulfur not less than 5%
• Sodium and Potassium not less than 2%
• Oil Shale etc. - can be a trade off with the $3/acre year rental