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