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Show plorer has little assurance that his rights to develop minerals will be secure even after he is satisfied that his discovery will support an economically feasible operation. If he must satisfy the legal test of current marketability at a profit,13 he is then faced with the uncertainties of the cyclical price patterns for minerals, particularly since he cannot control the timing for consideration of his application for patent. If prices are low, there is increased risk that his claim will be held invalid. To us it seems clear that Federal land agencies are poorly equipped to judge what is a prudent mining investment, and this issue should be closed when the mineral explorer is prepared to commit himself by contract to expend substantial effort and funds in the development of a mineral property. The review of development plans at this, as well as at other stages, would be the responsibility of trained technical personnel of the United States Geologic Survey. That staff performs this function in connection with other minerals at the present time. Development and production rights should extend to the area necessary for production of the mineral discovery. These rights should embrace use of enough land to meet all reasonable requirements for a mineral operation, such as settling ponds, mills, tailings deposits, etc. Present law allows only 5 acres for each millsite in addition to the actual claim acreages,14 and this clearly has been inadequate in many cases. Patent to Minerals Only Under present law locators may obtain a patent to the mineral lands-both surface and subsurface.15 The payment of the current fee of $2.50 per acre for placer claims and $5.00 per acre for lode claims is merely nominal and does not justify sale of fee title which may carry valuable surface rights. We recognize that the patent system has provided security of title and has provided an incentive to search for concealed minerals on the public domain. To avoid windfalls and to prevent misuse of the mining laws for nonmineral purposes, we propose that a mineral patent should carry only a right to use the surface necessary for the extraction and processing of the minerals to which patent has been granted. Market Value for the Surface Mineral operators, however, should have the option of acquiring title or a lease to the needed land areas when they are willing to pay the market value of the surface rights. We recognize that there may well be circumstances in which the required investment would be so large that business judgment would dictate the need for fee title. In some cases, a lease may be preferred for that purpose, particularly if it is only necessary to permit more extensive use of the land than is conferred by the mineral patent alone. // the mineral patentee does not acquire title to the surface, the right to the mineral interest should terminate automatically at the end of a reasonable period after cessation of production. It is apparent that a patentee who owns only a mineral interest has no incentive to manage or improve the land when mineral production is no longer attractive to him. These inactive properties are particularly troublesome when they are isolated tracts within a land management area. Such a provision would also encourage more complete use of the mineral deposit and discourage merely speculative holding of such areas. Payment of Royalties As stated above, the only payment made under the General Mining Law is a nominal fee for obtaining patent for mineral lands.16 The holder of a mining claim may extract and market the minerals without payment for any portion of their value both before and after patent. Throughout this report we consistently recommend that every user of the public lands should pay for his right or privilege. As a general standard we recommend fair-market value, unless Congress expressly establishes another guideline for payment. We perceive no reason why those producing minerals from the public lands should not likewise pay a fair value in relation to the product they obtain and market. We note that payment to the United States is now required for minerals obtained from the public lands under the mineral leasing acts 17 and the Materials Act.18 Pricing under those acts has been generally accepted and is comparable to prices paid for the same minerals to non-Federal public, as well as private, landowners. The mining industry usually pays for hard rock minerals taken from private lands and non-Federal public lands either through a royalty or a lump sum payment. The royalty payment, through which a payment is required only on the values produced, is considered by us to be equitable to both the producer and the Government. We believe that royalty should be collected on production both before and after patent. 13 See United States v. Coleman, 390 U. S. 599 (1968). 1430U.S.C. §42 (1964). 15 30 U.S.C. §§ 29 and 37 (1964). 16 Ibid. 17 n. 3, supra. 18 n. 4, supra. 128 |