41724 Federal Register / Vol. 65, No. 130 / Thursday, July 6, 2000 / Notices

DEPARTMENT OF THE INTERIOR

Bureau of Land Management

[WO–620–1430–00–24 1A]

Notice of Policy on Mineral Commodity

Pricing and Opportunity for Comment

AGENCY: Bureau of Land Management,

Interior.

ACTION: Notice of policy and

opportunity for comment.

SUMMARY: The Bureau of Land

Management (BLM) is instituting a

policy for calculating the mineral

commodity price to use when

determining whether a mining claim

contains a ‘‘discovery’’ of a valuable

mineral deposit. The policy is necessary

to establish a consistent approach in

determining claim validity.

DATES: The policy statement is effective

July 6, 2000, but BLM will accept public

comments for 60 days. BLM will

consider the comments and decide

whether or not to amend this policy

statement. If you wish to comment on

the policy, you should submit your

comments by September 5, 2000.

ADDRESSES: Mail: Director (630), Bureau

of Land Management, Administrative

Record, Room 401 LS, 1849 C Street,

NW, Washington, D.C. 20240.

Personal or messenger delivery: Room

501, 1620 L Street, NW, Washington, DC

20036.

Internet e-mail:

WOComment@blm.gov. (Include ‘‘Attn:

MINERAL PRICING’’)

FOR FURTHER INFORMATION CONTACT:

Roger Haskins in the Solid Minerals

Group at (202) 452–0355. For assistance

in reaching Mr. Haskins, individuals

who use a telecommunications device

for the deaf (TDD) may call the Federal

Information Relay Service at 1–(800)

877–8339, 24 hours a day, 7 days a

week.

SUPPLEMENTARY INFORMATION:

I. Public Comment Procedures

II. Background

III. Statement of Policy

I. Public Comment Procedures

How Do I Comment on the Proposed

Policy Statement?

Please submit your comments on

issues related to the proposed policy

statement, in writing, according to the

ADDRESSES section above. Your

comments should explain the need for

any changes you recommend and,

where possible, refer to specific

paragraphs in the statement.

Will My Comments Be Available to

Others?

BLM will make your comments,

including your name and address,

available for public review at the ‘‘L

Street’’ address listed in ADDRESSES

above during regular business hours

(7:45 a.m. to 4:15 p.m., Monday through

Friday, except Federal holidays).

Can BLM Keep My Identity

Confidential?

Under certain conditions, BLM can

keep your personal information

confidential. You must prominently

state your request for confidentiality at

the beginning of your comment. BLM

will consider withholding your name,

street address, and other identifying

information on a case-by-case basis to

the extent allowed by law. BLM will

make available to the public all

submissions from organizations and

businesses and from individuals

identifying themselves as

representatives or officials of

organizations or businesses.

II. Background

The General Mining Law of 1872

establishes the terms by which you may

locate and patent mining claims—

transfer them to private ownership—on

public lands. In order to be valid, your

mining claim must contain a

‘‘discovery’’ of a valuable mineral

deposit. This means you must have

found a mineral deposit and you must

have enough evidence to show that the

mineral deposit is of such a character

that a person of ordinary prudence

would be justified in expending

additional labor and means, with a

reasonable prospect of success, in

developing a valuable mine. Castle v.

Womble, 19 Pub. Lands Dec. 455, 457

(1894). You must show that the mineral

can be extracted, removed and marketed

at a profit. United States v. Coleman,

390 U.S. 599, 602–603 (1968). When

determining the validity of mining

claims, Federal land management

agencies conduct examinations of your

asserted discovery to evaluate whether

the mineral deposit can be removed and

marketed at a profit given the

production costs and the prevailing

market on a given date. The Bureau of

Land Management, the National Park

Service, and the U.S. Forest Service

each employ certified mineral

examiners who conduct these

examinations on behalf of the Secretary

of the Interior. Their conclusions may

later be reviewed by administrative law

judges (ALJ) in the Department of the

Interior’s Office of Hearings and

Appeals, by the Interior Board of Land

Appeals (IBLA), and ultimately by the

federal courts.

The Secretary must determine the

validity of a mining claim when you as

the claimant seek to patent the claim,

and may also determine the validity of

the claim at any other time for any other

reason. In any case, you must be able to

show that you have discovered a

valuable mineral deposit on a particular

significant date. We refer to this date as

the marketability date. ‘‘Marketability

date’’ means the date on which we

determine if the mineral deposit you

discovered can be removed and

marketed at a profit given the

production costs and the prevailing

market conditions on that date. When

we determine the validity of your

mining claim, we may determine

whether you have discovered a valuable

mineral deposit on one or more

marketability dates depending, for

example, on whether you have filed a

patent application or your mining claim

is in an area subsequently withdrawn

from mining claim location.

An essential element in determining

whether a mineral deposit is marketable

is the market value of the mineral

commodity. For the most part, the

commodities subject to the Mining

Law—gold, silver, copper, lead, zinc,

etc.—have widely reported spot market

prices and are traded on public

exchanges. Many of these minerals,

especially those with volatile prices, are

also the subject of ‘‘futures’’ trading

based on the projected future market

price for the mineral. The major

exchanges for mineral commodities are

the London Metals Exchange, the New

York Commodities Exchange (COMEX)

and the Chicago Board of Trade. On

these exchanges, the historical spot

prices are charted on a monthly basis.

Futures prices are often set on a

quarterly basis, but monthly futures

prices are posted some of the time.

With these published market prices,

determining a market value for the

mineral to be mined might seem

straightforward, but it has not proved a

simple matter. While the value must be

tied to an appropriate time period, this

does not necessarily mean that the

market price of the mineral on a specific

date must be used to set the mineral’s

value. The market price on one date

may be anomalous, or may represent a

rising or falling market that should be

taken into account in determining

whether a prudent miner may

reasonably expect to develop a

profitable mine. This problem is

obviously more severe in the case of

minerals such as gold or molybdenum

that historically have markets that may

fluctuate substantially, even over a short

Federal Register / Vol. 65, No. 130 / Thursday, July 6, 2000 / Notices 41725

period of time. The IBLA summarized

these issues in holding that ‘‘a mining

claimant must show that, as a present

fact, considering historic price and cost

factors and assuming that they will

continue, there is a reasonable

likelihood of success that a paying mine

can be developed.’’ In re Pacific Coast

Molybdenum Co., 90 I.D. 352, 360, 75

IBLA 16 (1983).

Neither BLM nor the Department has

ever addressed the mineral pricing issue

in published regulations or established

a formal policy in handbooks or

manuals. Instead, over the years,

mineral examiners, ALJs and the IBLA

have followed an ad hoc approach. The

IBLA case law has not established a firm

pricing rule. Rather, the IBLA has

reviewed the valuation method used by

the mineral examiner or the ALJ to

determine whether it is reasonably

based on the facts of the case before it.

The methods for establishing a market

price that emerge from the Department’s

practice have ranged widely, but fall

into two basic categories: using the

market price on a given date, or

averaging the market price over several

years.

In several cases, the IBLA has

approved using market prices on

definite dates to set the value of the

minerals. For example, in U.S. v.

Shining Rock Mining Corp., 112 IBLA

326 (1990), the IBLA affirmed a mineral

examiner’s decision to set the price of

the mineral as the market price on the

date of the hearing before the ALJ. In

another case, U.S. v. Garner, 30 IBLA 42

(1977), the IBLA affirmed the ALJ’s

assessment of marketability based on

the market price at the date of the

hearing and the market price on the date

of the withdrawal of the lands. In

Pacific Coast, the IBLA concluded that

the market price on the date of

withdrawal could also be used to

determine the profitability of the claim

on the date the IBLA decided the

appeal, despite a wide swing in

molybdenum prices over the

intervening four years. 90 I.D. at 360–

361.

IBLA has also adopted or affirmed

marketability determinations based on

average price calculations. In U.S. v.

Crowley, 124 IBLA 374 (1992), the IBLA

used the average price for the five years

preceding the pertinent date of

withdrawal. A longer average period

was selected in U.S. v. Laczkowski, 111

IBLA 165 (1989), where the IBLA

adopted a seven-year average price,

from the date that the Government first

sampled the claim to the date of the

hearing before the ALJ. Mineral

examiners report using other averaging

methods as well—up to ten-year

historical averages, or weighted averages

that give more weight to more recent

prices.

In at least one case, the IBLA ignored

both the exact date and the average

price methods. In U.S. v. Waters, 146

IBLA 172 (1998), the IBLA rejected an

ALJ’s selection of a six-year average

price. Instead, the IBLA adopted the

mineral examiner’s slightly higher price

as a ‘‘reasonably projected price,’’

noting that the mining claimant had

used that price as well. Raising even

more questions, the IBLA never actually

stated what price would be used in U.S.

v. Gold Placers, Inc., 25 IBLA 368

(1976). After rejecting the ALJ’s decision

to use the price of gold on a date after

the hearing (the ALJ was attempting to

reflect a surge in the market price

following the hearing), the IBLA

concluded that rising costs for mining

had outpaced the increase in the value

of gold, so the mine would be

uneconomic.

This diversity of approaches to

mineral pricing is not good policy. It

creates uncertainty in the process—for

mineral examiners, for claimants, and

for others. It can give rise to distortions

and accusations of bias, as a

sympathetic or unsympathetic mineral

examiner may select the method that

yields the highest or lowest value for the

mineral. The range of pricing

approaches used also encourages

speculation before the Office of

Hearings and Appeals regarding future

market prices; the reported cases

commonly describe speculative and

contradictory evidence on the future of

minerals markets.

In order to reduce uncertainty and

establish a consistent and reasonable

basis for analyzing the economic

marketability of a mineral deposit

during a mining claim validity

determination, the BLM is adopting the

following Statement of Policy on the

proper method to determine the market

price of the mineral at issue. This policy

relies on the prices for minerals set in

the free market and avoids the

speculative approaches that have

reduced the reliability and authority of

claim validity determinations in the

past.

III. Statement of Policy

The BLM will use the following steps

to determine the price of mineral

commodities when analyzing the

economic marketability of a mineral

deposit in determining the validity of a

mining claim. This policy will apply to

validity determinations for all

unpatented mining claims, including

those located on lands administered by

the BLM, the National Park Service and

the U.S. Forest Service. We will use this

methodology only for minerals that have

a commodity market price established

through trading on a public exchange.

1. Marketability Dates. The dates

described below are the significant dates

on which we will determine if the

mineral deposit the claimant discovered

can be removed and marketed at a profit

given the production costs and the

prevailing market conditions on that

date.

A. Mining claims on withdrawn lands.

For any claim located before the

withdrawal of the affected lands from

mineral entry, BLM will determine if it

is valid both as of the date of the

withdrawal and the date of the mineral

examination.

B. Mining claims in patent

applications. For any claim included in

a patent application, BLM will

determine the validity of the claim as of

the date it determines the claimant met

all the requirements for patenting.

C. All others. For any mining claim

validity determination where there is no

patent application and no withdrawal,

BLM will determine the validity of the

claim as of the date of the mineral

examination.

Except for claims subject to paragraph B

above, if a mineral examiner concludes

that the claim is invalid as of the date

of the mineral examination, the

examiner must be prepared to address

any evidence the claimant might present

at the contest hearing regarding validity

of the claim on the date of the hearing.

2. General Policy. BLM will use a sixyear average pricing method. To

determine the mineral commodity price

to use on any specific marketability

date, the mineral examiner will begin

with an average of the commodity price

of the mineral for the month in which

the marketability date occurred. The

examiner will then average that price

together with: (a) the monthly average

commodity prices for each of the 36

months before the marketability date;

and (b) the monthly average commodity

futures prices for each of the 36 months

after the marketability date. To obtain

monthly figures for futures prices, the

mineral examiner will use the highest

volume quarterly futures prices for each

of the three months covered by that

quarter. For example, if a quarterly price

is posted as a first-quarter futures price,

that price would establish monthly

prices for January, February, and March.

The examiner will average a total of 73

monthly averages to arrive at the 6-year

average commodity price to use for the

marketability date. See paragraphs 3 and

4 for exceptions to the general policy.

The examiner should never use actual

commodity prices when determining

41726 Federal Register / Vol. 65, No. 130 / Thursday, July 6, 2000 / Notices

the futures prices for each of the 36

months after the marketability date. For

example, if the marketability date is

February 2, 1996 , the mineral examiner

will not use prices at which the mineral

commodity actually sold on the market

for the 36 months after the marketability

date. Instead, the examiner will use the

futures data that were reported on

February 2, 1996 . This policy is

designed to reflect the futures market

that the claimant faced on the

marketability date. We are using 36

months, or three years, of futures price

data because that is all that is usually

available.

The monthly average commodity

prices can be obtained from the London

Metals Exchange (LME) at

<www.lme.co.uk>, the New York

Commodities Exchange (COMEX) at

<www.nymex.com> or the Chicago

Board of Trade at <www.cbot.com>.

Quarterly futures prices can be obtained

at <goldsheet.simplenet.com>,

<www.futuresweb.com>, and

<www.futuresguide.com>. Other

sources of archival data are the LME and

<www.kitco.com>. The Uniform

Resource Locators for these sites may

change frequently. There are many other

sites available which post commodity

pricing data.

3. Limited Futures Markets. In

instances where a publicly-traded

mineral has no futures prices available

on the market, the mineral examiner

will average the monthly average

commodity price for the month in

which the significant marketability date

occurred with the monthly average

commodity prices for each of the 36

months before the marketability date.

The mineral examiner will average a

total of 37 numbers in this instance. If

quarterly futures prices are available for

any of the 36 months following the

marketability date, the mineral

examiner will average the available

futures prices on a monthly basis with

the monthly average commodity price

for the month in which the significant

marketability date occurred and the

monthly commodity prices for each of

the 36 months before the marketability

date.

4. Operating Mines. When

determining the validity of mining

claims that are being developed by an

operating mine, the mineral examiner

will substitute the prices at which the

claimant actually sold the commodity

during any of the 36 months preceding

the marketability date, and during the

month in which the marketability date

occurs, for the monthly average

commodity price that otherwise would

be used under paragraph 2. Also, the

mineral examiner will substitute any of

the claimant’s actual futures sales

contract prices for production from the

mine for any of the 36 months following

the marketability date.

Sylvia V. Baca,

Assistant Secretary of the Interior.

[FR Doc. 00–17016 Filed 7–5–00; 8:45 am]

BILLING CODE 4310–84–P

DEPARTMENT OF THE INTERIOR

Bureau of Land Management

[ID–084–1150–EU)

Notice of Realty Action, Sale of Public

Land in Custer County, Idaho (IDI–

32472)

AGENCY: Bureau of Land Management,

Interior.

ACTION: Sale of public land in Custer

County.

SUMMARY: The following-described

public land has been examined and

through the public-supported land use

planning process has been determined

to be suitable for disposal by direct sale

pursuant to Section 203 of the Federal

Land Policy and Management Act of

1976 at no less than the appraised fair

market value of $24,600. The land will

not be offered for sale until at least 60

days after the date of publication of this

notice in the Federal Register.

Boise Meridian

T. 7 N., R. 24 E., sec. 25, Lots 7 and 10.

T. 7 N., R. 24 E., sec. 30, Lot 8.

The area described contains 49.2 acres in

Custer County.

The patent, when issued, will contain

a reservation to the United States for

ditches and canals under the Act of

March 30, 1890.

The patent, when issued, will be

made subject to the following existing

rights of record:

1. IDI–21021—A telephone line right-ofway authorized to ATC

Communications.

2. IDI–23188—A road right-of-way

authorized to Lost River Highway

District.

3. IDI–22582—A power line right-ofway authorized to Bonneville Power

Administration.

Continued use of the land by valid rightof-way holders is proper subject to the

terms and conditions of the grant.

Administrative responsibility

previously held by the United States

will be assumed by the patentee.

DATES: Upon publication of this notice

in the Federal Register, the land

described above will be segregated from

appropriation under the public land

laws, including the mining laws, except

the sale provisions of the Federal Land

Policy and Management Act. The

segregative effect will end upon

issuance of patent or 270 days from the

date of publication, whichever occurs

first.

ADDRESSES: Upper Columbia—Salmon

Clearwater District, Challis Field Office,

Rt. 2, Box 610, Salmon, Idaho 83467.

FOR FURTHER INFORMATION CONTACT: For

additional detailed information, contact

Gloria Romero, Realty Specialist, at the

address shown above or (208) 756–5421.

SUPPLEMENTARY INFORMATION: This land

is being offered by direct sale to Dave

Nelson of Mackay, Idaho, based on

historic use and value of added

improvements. Failure or refusal by

Dave Nelson to submit the required fair

market appraisal amount by September

29, 2000, will constitute a waiver of this

preference consideration and this land

may be offered for sale on a competitive

or modified competitive basis. It has

been determined that the subject parcel

contains no known mineral values;

therefore, mineral interests will be

conveyed simultaneously.

For a period of 45 days from the date

of publication of this notice in the

Federal Register, interested parties may

submit comments to the Challis Field

Office Manager, Upper ColumbiaSalmon Clearwater District, Challis

Field Office, at the above address. Any

adverse comments will be reviewed by

the Field Office Manager, who may

vacate or modify this realty action to

accommodate the protests. If the protest

is not accommodated, the comments are

subject to review of the State Director

who may sustain, vacate, or modify this

realty action. This realty action will

become the final determination of the

Department of the Interior.

Dated: June 29, 2000.

Fritz Rennebaum,

District Manager.

[FR Doc. 00–17093 Filed 7–5–00; 8:45 am]

BILLING CODE 4310–66–M

DEPARTMENT OF THE INTERIOR

Bureau of Reclamation

Bay-Delta Advisory Council’s

Ecosystem Roundtable Meeting and

Ecosystem Roundtable Amendments

Subcommittee Meeting

AGENCY: Bureau of Reclamation,

Interior.

ACTION: Notice of meetings.

SUMMARY: The Bay-Delta Advisory

Council’s (BDAC) Ecosystem