The issue of mineral rights is a complex one for western ranches
— Minerals add value, headache to property
Ranchers in the Intermountain West “enjoy” a rocky relationship with the federal government, especially with public lands in the mix. But mineral rights? Now that’s when things get complicated.
“It is so hard to track down that the title insurance companies will not even discuss or talk about mineral rights interests,” exclaimed Al Steninger, broker with Nevada Ranch Services. He said they simply won’t do it.
“You couldn’t even go to the title company and say, ‘I will pay you any price you want if you will tell me what the mineral rights are.’ They will say, ‘I’m sorry but we don’t do that.’” “It is a recorded activity,” said Rich Perry, administrator of the Nevada Division of Minerals, about mineral rights transfers and claims made on federal public land. “It’s just not one that is picked up when someone is doing a title search.”
Pat Bates, owner/broker of Bates Land Consortium, told WLJ that he had heard some rare title companies will figure out what mineral rights interests and claims are part of a property, but for an added fee.
“The mineral rights have been so fractured for so many years, that I like to keep it simple. If you want to know about minerals, you just need to pay an attorney somewhere between $10,000-50,000 to do an old-fashioned abstract.”
It’s not surprising that title companies generally don’t want to get involved. As with so many things in the West, the answer to “what are the mineral rights on this land?” depends on many things including land type and ownership, type of mineral rights interest, and the different claim types that might exist.
Location, location, location
Look no farther than Nevada for the complexities of public lands and mineral rights. Nevada is the largest hard-rock mining state in the nation, and holds the notorious honor of having the highest proportion of public land.
“Eighty-five percent, of which about a little over two-thirds are still open to mineral location and leasing,” Perry described of Nevada and mineral rights.
Then he added with a chuckle: “The good thing about Nevada is it’s 85 percent public land. The bad thing about Nevada is it’s 85 percent public land. And everyone wants a chunk for themselves.”
While “public” or “private” are popular ways to describe land in the West, Perry preferred a different distinction.
“You can describe property in Nevada with regards to mineral rights in two ways; federal and nonfederal.”
Non-federal land can include private deeded land, or state, county, or city land to name a few.
If there are mineral rights associated with a piece of private property, they will show up on the deed. If a piece of property includes state, county, or city land, the information on mineral rights will reside with those entities.
If it’s federal land, however, it is subject to the Mining Law of 1872, otherwise known as the general mining law.
“Keep in mind that the Mining Law of 1872 basically prioritizes the production of metals as the highest priority use for land because of the revenue that it generates for everybody,” explained Perry.
He also told WLJ that there are three types of mineral rights interest that can exist on federal land. These are:
• Locatable minerals usually refer to staking claims to look for things like metals;
• Leasable minerals often refer to “liquid” minerals like oil, natural gas, and geothermal, though other less common leasable minerals exist; and
• Saleable minerals generally refer to things like sand, gravel, or aggregate that is used for road making.
If it’s federal land, it’s generally safe to say the mineral rights interests are either being used or are open to exploration.
WLJ asked Perry how mineral rights interests on federal lands interacted with other parts of the split estate; namely, surface rights.
“If it is open to location— you know, if it’s not been excluded under for some reason such as being a wilderness area or a national monument —then an explorationist has the right to go onto the land because it’s public land and sample, explore, and stake a claim.”
Claimants must go through different processes depending on how much surface disturbance they expect their exploration will cause. Perry noted that federal law outlines some compensation for surface rights holders if a mineral rights interest exploration results in damage to the surface right.
“If rancher has a grazing allotment, they can find out if there’s claims there. But if it’s land that’s open, there’s nothing they can do about it other than they can stake it up themselves but that’s going to cost them a lot of money,” Perry noted.
According to BLM documents, opening a new claim on federal land can cost between $155-212 depending on claim type. Maintaining an existing claim costs $155 a year.
Perry pointed out that the specific laws regulating staking a claim are different in each state. For Nevada, the laws on staking claims is in Chapter 5 of the Nevada Revised Statute. Claimants in Nevada must mark their claim and submit a map to the county recorder. These are open to review by the public.
“You have to go to the county recorder to look those up in Nevada, but many counties are online. Some of the smaller ones don’t have the funding to do that and are not yet online, but if you took something like Elko or Humboldt County, you can find that most of that stuff is online or you can go find pages at the county recorder’s office and look at the claim map.”
The BLM does keep several internet tools to aid surface rights holders to find existing claims on mineral rights interests. Look for more information on these tools in future issues. — Kerry Halladay, WLJ editor