Leasing of Solid Minerals Other Than Coal and Oil Shale, 637-641 [E9-34]

Agencies

• DEPARTMENT OF THE INTERIOR
• Bureau of Land Management
• Land Management Bureau

[Federal Register Volume 74, Number 4 (Wednesday, January 7, 2009)]
[Rules and Regulations]
[Pages 637-641]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-34]


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DEPARTMENT OF THE INTERIOR

Bureau of Land Management

43 CFR Part 3500

[LLWO32000.L13300000.PO0000.24-1A]
RIN 1004-AD91


Leasing of Solid Minerals Other Than Coal and Oil Shale

AGENCY: Bureau of Land Management, Interior.

ACTION: Final rule.

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SUMMARY: The Bureau of Land Management (BLM) is amending its 
regulations in 43 CFR part 3500 for leasing of solid minerals other 
than coal and oil shale to distinguish fringe acreage lease 
requirements from lease modification requirements, and to describe 
acceptable justifications for a lease modification. The final rule also 
identifies changes in the associated procedural requirements and 
updates the filing fees. The final changes are based on statutory 
authorities, which authorize the BLM to issue regulations for leasing 
of minerals and to charge for administrative processing costs, and on 
policy guidance from the Office of Management and Budget (OMB) and the 
Department of the Interior (DOI) requiring the BLM to charge these 
fees.

[[Page 638]]


DATES: Effective date: February 6, 2009.

ADDRESSES: Inquiries or suggestions should be delivered to Director 
(320), Bureau of Land Management, Room 501LS, 1849 C Street, NW., 
Washington, DC 20240, ATTN: 1004-AD91.

FOR FURTHER INFORMATION CONTACT: George Brown, Geologist, Solid 
Minerals Division (WO-320), Bureau of Land Management, Mail Stop-501LS, 
1849 ``C'' Street, NW., Washington, DC 20240; or by telephone at (202) 
452-7765. Persons who use a telecommunications device for the deaf 
(TDD) may call the Federal Information Relay Service (FIRS) at 1-800-
877-8330, 24 hours a day, seven days a week, to leave a message or 
question with Mr. Brown. You will receive a reply during normal 
business hours.

SUPPLEMENTARY INFORMATION:

I. Background
II. Discussion of Final Rule
III. Procedural Matters

I. Background

    On June 24, 2008 (73 FR 35609), the BLM published a proposed rule 
to amend 43 CFR part 3500, Leasing of Solid Minerals other than Coal 
and Oil Shale. The comment period ended on August 25, 2008. The BLM 
received one public comment, which whole-heartedly supported the 
proposed rule. We therefore publish today's final rule with no changes 
from the proposed rule.
    The comment supported the proposed rule as necessary in order to 
promote maximum recovery of the minerals being leased. Without the 
revisions proposed in the rule, the comment continued, the BLM would be 
precluded from granting lease modifications when the acreage proposed 
to be added does not contain an extension of the mineral deposit. The 
comment stated that the experience of the members of the National 
Mining Association confirms that the current regulations can constrain 
optimal development and recovery.
    As explained in the proposed rule, the BLM proposes initial lease 
boundaries that conform as nearly as possible to the orientation of 
known mineral deposits. However, progress in development of the deposit 
may indicate that a lease boundary may need refinement. For example, 
additional exploration by the lessee may identify extensions of the 
deposit onto adjoining land. Or new engineering information may 
determine that lease boundaries are not situated for optimal 
development and recovery of the mineral deposit within the lease. Thus, 
the BLM uses lease modifications to adjust lease boundaries and make 
corrections to accommodate new information. These changes are 
infrequent and typically involve relatively small areas.
    Current regulations treat fringe acreage leases and lease 
modifications in the same way. In both cases, there must be a mineral 
deposit under the additional acreage to be added to the primary 
leasehold. In some cases, this required placing overburden onto lands 
containing mineral deposits, which interfered with maximum recovery of 
the minerals and shortened the operating life of some mines. It is 
appropriate that a fringe acreage lease, as a new lease, should be 
required to show the presence of a mineral deposit within the final 
lease boundaries. By contrast, since a modification is an adjustment to 
an existing lease that already contains a known mineral deposit, the 
requirement in the existing regulations for the presence of a mineral 
deposit in the modification area should not be applicable to adjustment 
of the existing lease boundary. Therefore, the final rule amends this 
provision with regard to lease modifications.
    The final rule also provides more detailed information in the 
cross-reference in section 3510.12(b) to the cost recovery fees listed 
in section 3000.12 of title 43 of the CFR.

II. Discussion of Final Rule

    The BLM is amending the regulation that requires that the acreage 
proposed to be added to an existing lease in a lease modification 
application must contain an extension of the mineral deposit. The 
amendment acknowledges that an existing lease already contains a known 
deposit, and provides for modification where the configuration of the 
lease boundary has been found to be inadequate for recovery of the 
previously leased mineral deposit. Under circumstances where there is 
no known deposit of the same mineral on the additional acreage, the 
final rule requires that the acreage to be added is necessary to 
achieve recovery of the mineral deposit on the pre-existing Federal 
lease and, had the acreage been included in the Federal lease at the 
time of the Federal lease's issuance, such inclusion would have 
produced a reasonably compact lease as required by the Mineral Leasing 
Act of February 25, 1920, as amended. The final rule recognizes that, 
since the additional acreage could have been included at the time of 
lease issuance even though it did not contain a known mineral deposit, 
it may now be included as a modification of the pre-existing lease. The 
final rule allows modification of lease boundaries for better 
accommodation of development based on new information on the location 
and orientation of deposits and extraction areas, providing potential 
cost savings to lessees and increased returns to the United States from 
maximum recovery of leased mineral deposits. This is a minor regulatory 
change that applies in limited circumstances. The BLM consulted with 
the Forest Service in the development of the proposed rule.
    The principal reason for this amendment is to facilitate the 
modification of a lease for the following purposes:
    (1) To recognize new information about the extent of the deposit to 
avoid bypassing reserves that could not be independently developed;
    (2) To provide space for placement of overburden and other waste 
rock materials to facilitate maximum recovery of the mineral deposit; 
and/or
    (3) To provide space for other facilities needed to recover the 
deposit, including ore stockpiles, topsoil stockpiles, haul and/or 
access roads, and support facilities such as warehouse and storage 
areas, shops, fuel and lubricant storage, equipment staging areas, 
electrical substations, repair shops, and restrooms.
    All leases necessarily include some nonmineral acreage. Lease 
boundaries are based on the location of deposits that may not be fully 
identified at the time of lease issuance. Items (2) and (3) above 
already take place on existing leases but can be constrained because 
the lease boundaries may not be optimally situated with respect to the 
deposits to provide space for these activities. For example, due to the 
space limitations caused by orientation of the deposit relative to the 
lease boundary, temporary stockpiling of ore or overburden on the 
surface over an unmined portion of a deposit may be necessary, 
interfering with mining efficiency and increasing costs. Such 
stockpiling blocks access to the deposit, reduces recovery, and 
requires handling and hauling the stockpile multiple times as the 
deposit is mined. Readjustment of the lease boundary for better 
conformity with the deposit orientation will allow better utilization 
of the lease acreage for the overall mine operation.
    Subpart 3516 provides for use permits for ancillary operations for 
phosphate leases (up to 80 acres) and sodium leases (up to 40 acres). 
However, use permits are not appropriate to meet the needs addressed by 
this final rule, for several reasons. Lease boundary readjustment 
provides for more efficient utilization of leased acreage and more 
space in the area of the greatest need immediately adjacent to the 
operations. Readjustment will provide more space

[[Page 639]]

for operations in a compact configuration than a use permit by making 
more effective use of the acres that are leased and minimizing the 
additional acres needed. Use permits, on the other hand, may not 
provide enough acreage for all lease operations. Also, BLM use permit 
provisions do not apply to national forest lands.

III. Procedural Matters

1. Regulatory Planning and Review (E.O. 12866)

    This document is not a significant rule and the Office of 
Management and Budget has not formally reviewed this rule under 
Executive Order (E.O.) 12866. We have made the assessments required by 
E.O. 12866 and the results appear below.
     The rule will not have an annual effect on the economy of 
$100 million or more or adversely affect in a material way the economy, 
a sector of the economy, productivity, competition, jobs, the 
environment, public health or safety, or state, local, or tribal 
governments or communities. Mining companies rarely seek lease 
modifications. For the fifteen-year period from FY1992 through FY2007, 
BLM processed 18 lease modifications for active leases. This regulation 
change is not expected to result in a substantial increase in the 
number of modifications. Although the BLM expects few modifications, 
the likely economic impacts from an individual lease modification can 
be illustrated in the following example. In one recent lease 
modification, one company employed about 210 workers with annual wages 
of about $18.7 million. The modification extended the mine's life by 2 
to 3 years, thereby extending the wage earnings for those 210 workers, 
and producing an additional $4 to 6 million in royalties for the 
Federal Government.
     The rule will not create a serious inconsistency with an 
action taken or planned by another agency. It will be consistent with 
the current practices of the BLM and the Forest Service for operation 
on a lease, which provide for consultation between the agencies before 
the BLM authorizes a lease modification, and will extend those 
practices to the additional lands in modified leases. It will not 
change the relationships of the BLM to other agencies and their 
actions. The final rule will allow a lease modification to increase the 
size, or change the shape and orientation of the lease, or both, 
providing more acreage for lease operations. Procedures for review and 
approval of all lease operations, including mining and reclamation 
plans, development of mitigation measures, and the associated reviews 
under the National Environmental Policy Act, will remain the same. 
Potential activities on the leases will remain the same. The effect of 
this rule is merely to provide more acreage to perform those operations 
on existing leases.
     The rule will not materially affect entitlements, grants, 
loan programs, or the rights and obligations of their recipients. The 
rule does not address any of these programs.
     The rule will not raise novel legal or policy issues.

2. Regulatory Flexibility Act

    We certify that this rule will not have a significant economic 
effect on a substantial number of small entities under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.) Although a substantial number of 
lessees meet the criteria for small entities, as defined by the Small 
Business Administration (SBA), the final rule will only affect a small 
number of entities and the annual effect on the economy of the 
regulatory changes will be less than $100 million. When it is applied, 
the final rule will have a beneficial impact because it allows the 
lessee to develop the lease more fully, and do so with greater 
efficiency and potentially at lower cost. A threshold analysis was 
performed, which determined that a Regulatory Flexibility Analysis is 
not required. The threshold analysis is available at the address 
specified under ADDRESSES. A Small Entity Compliance Guide is not 
required.
    For the purposes of this section a ``small entity'' is an 
individual, limited partnership, or small company, at ``arm's length'' 
from the control of any parent companies, with fewer than 500 
employees. This definition accords with Small Business Administration 
regulations at 13 CFR 121.201.

3. Small Business Regulatory Enforcement Fairness Act

    This rule is not a major rule under 5 U.S.C. 804(2), the Small 
Business Regulatory Enforcement Fairness Act.
     This rule will not have an annual effect on the economy of 
$100 million or more or adversely affect in a material way the economy, 
a sector of the economy, productivity, competition, jobs, the 
environment, public health or safety, or state, local, or tribal 
governments or communities. As explained above, lease modifications 
constitute a small part of solid non-energy mineral leasing activity 
and most of those are accomplished under existing regulations. The 
final rule is only expected to involve boundary adjustments for a few 
leases, and the associated economic effects:
     Will be less than $100 million annually;
     Will not cause a major increase in costs or prices for 
consumers, individual industries, Federal, state, or local government 
agencies, or geographic regions; and
     Will not have significant adverse effects on competition, 
employment, investment, productivity, innovation, or the ability of 
U.S.-based enterprises to compete with foreign-based enterprises.
     The rule will not materially affect entitlements, grants, 
loan programs, or the rights and obligations of their recipients. The 
rule does not address any of these programs.

4. Unfunded Mandates Reform Act

    This rule will not impose an unfunded mandate on state, local, or 
tribal governments or the private sector of more than $100 million per 
year. The rule will not have a significant or unique effect on state, 
local, or tribal governments or the private sector. The provisions of 
this rule do not require anything of any non-federal governmental 
entity. The rule is not a ``significant regulatory action'' under the 
Unfunded Mandates Reform Act (2 U.S.C. 1501 et seq.).

5. Governmental Actions and Interference With Constitutionally 
Protected Property Rights (Takings) (E.O. 12630)

    Under the criteria in E.O. 12630, this rule does not have takings 
implications. This rule does not substantially change BLM policy. 
Nothing in this rule has any effect on private property interests, and 
therefore nothing in the rule constitutes a taking. A takings 
implication assessment is not required.

6. Federalism (E.O. 13132)

    Under the criteria in Executive Order 13132, this rule does not 
have significant Federalism effects to warrant the preparation of a 
Federalism assessment. This rule does not change the role of or 
responsibilities among Federal, state, and local governmental entities, 
nor does it relate to the structure and role of states or have direct, 
substantive, or significant effects on states.

7. Civil Justice Reform (E.O. 12988)

    This rule complies with the requirements of E.O. 12988. 
Specifically, this rule:
    (1) Does not unduly burden the judicial system;

[[Page 640]]

    (2) Meets the criteria of sections 3(a) requiring that all 
regulations be reviewed to eliminate errors and ambiguity and be 
written to minimize litigation; and
    (3) Meets the criteria of section 3(b)(2) requiring that all 
regulations be written in clear language and contain clear legal 
standards.

8. Consultation With Indian Tribes (E.O. 13175)

    Under the criteria in E.O. 13175, we have evaluated this rule and 
determined that it has no potential effects on federally recognized 
Indian tribes. Because this rule does not make significant substantive 
changes in the regulations and does not specifically involve Indian 
reservation lands, we believe that relations with Indians, Indian 
tribes, and tribal governments will be unaffected and no consultation 
is needed for this rule. Consultation will take place, as necessary 
before making any lease modifications to individual leases. Lands 
within Indian Reservations, except the Uintah and Ouray Indian 
Reservation, Hillcreek Extension, State of Utah, are closed to the 
operation of the Mineral Leasing Act. Under Public Law 440 (Hill Creek 
Extension), the boundaries of the Uintah-Ouray Reservation were 
extended to include the surface of some public domain lands, but those 
lands do not contain any known mineral resources or leasing operations 
that are subject to these regulations and are unaffected by this 
change.

9. Paperwork Reduction Act

    The BLM has determined that this final rule does not contain any 
new information collection requirements that the Office of Management 
and Budget (OMB) must approve under the Paperwork Reduction Act of 1995 
(44 U.S.C. 3501 et seq.). The OMB has approved the information 
collection requirements in the regulations under OMB control number 
1004-0073, which expires March 31, 2010.

10. National Environmental Policy Act

    This rule does not constitute a major Federal action significantly 
affecting the quality of the human environment. A detailed statement 
under Section 102(2)(C) of the National Environmental Policy Act of 
1969 (NEPA), 42 U.S.C. 4332(2)(C), is not required.
    The BLM has determined that any environmental effects that this 
final rule may have are too broad, speculative, or conjectural to lend 
themselves to meaningful analysis and any actions authorized by the 
rule will be subject to the NEPA process on a case-by-case basis. See 
516 DM2, Appendix I, Item 1.10. In limited circumstances, this 
regulation will provide a limited amount of acreage within the lease 
boundary for operations to take place. The factual situation at each 
lease area is different. Specific proposals for modifications will be 
reviewed under NEPA and evaluated to identify the potential impacts 
associated with the final modifications and any appropriate mitigation, 
and the decisions about what operations will be allowed will be made on 
the basis of those analyses.
    Therefore, the final rule is categorically excluded from 
environmental review under Section 102(2)(C) of the National 
Environmental Policy Act, pursuant to 516 Departmental Manual (DM) 2.3A 
and 516 DM 2, Appendix I, Item 1.10, and does not meet any of the 10 
criteria for exceptions to categorical exclusion listed in 516 DM 2, 
Appendix 2. Pursuant to Council on Environmental Quality regulations 
(40 CFR 1508.4) and the environmental policies and procedures of the 
Department of the Interior, the term ``categorical exclusion'' means a 
category of actions that do not individually or cumulatively have a 
significant effect on the human environment and that have been found to 
have no such effect in procedures adopted by a Federal agency and for 
which neither an environmental assessment (EA) nor an environmental 
impact statement (EIS) is required.
    Because the final promulgation of this rule will not itself approve 
any lease modifications, it will have no significant impacts on the 
environment and will not have a significant impact on any of the 
following critical elements of the human environment as defined in 
Appendix 5 of the BLM National Environmental Policy Act Handbook (H-
1790-1): Air quality, areas of critical environmental concern, cultural 
resources, Native American religious concerns, threatened or endangered 
species, hazardous or solid waste, water quality, prime and unique 
farmlands, wetlands, riparian zones, wild and scenic rivers, 
environmental justice, and wilderness. The lease modifications that are 
authorized will be analyzed in EAs or EISs, and, if approved, they will 
incorporate site specific mitigation measures in both the modification 
approval and the mining/reclamation plan. This final rule does not 
change this, but makes it clear that, in certain circumstances, 
proponents of lease modifications do not bear the burden of showing 
that the land contains deposits of the minerals subject to the lease.

11. Information Quality Act

    In developing this rule, we did not conduct or use a study, 
experiment, or survey requiring peer review under the Information 
Quality Act (Section 515 of Pub. L. 106-554).

12. Actions Concerning Regulations That Significantly Affect Energy 
Supply, Distribution, or Use (E.O. 13211)

    This rule is not a significant energy action under the definition 
in E.O. 13211. A Statement of Energy Effects is not required. It will 
not have an adverse effect on energy supplies. The final rule will 
reduce energy requirements somewhat by facilitating efforts by lessees 
to keep operations compact. Thus, transportation required for materials 
within the mining operation may be reduced, given that operations will 
be conducted on adjacently located properties. Accordingly, we 
anticipate that this may reduce fuel consumption from haulage during 
operations. By facilitating maximum recovery of mineral deposits from 
leases, the final rule will extend mine life, allowing the existing 
infrastructure to be used for a longer time. Postponing development of 
the new infrastructure required for new mines will also reduce overall 
energy requirements.

13. Facilitation of Cooperative Conservation (E.O. 13352)

    In accordance with Executive Order 13352, the BLM has determined 
that this final rule:
     Does not impede facilitating cooperative conservation;
     Takes appropriate account of and considers the interests 
of persons with ownership or other legally recognized interests in land 
or other natural resources;
     Properly accommodates local participation in the Federal 
decision-making process; and
     Provides that the programs, projects, and activities are 
consistent with protecting public health and safety.
Author
    The principal author of this rule is George Brown, Geologist, 
Division of Solid Minerals, assisted by Ted Hudson, Acting Chief, 
Division of Regulatory Affairs, Washington Office, BLM.

List of Subjects in 43 CFR Part 3500

    Government contracts, Intergovernmental relations, Mineral 
royalties, Mines, Public lands-mineral resources, Reporting and 
recordkeeping requirements, Surety bonds.


[[Page 641]]


    Dated: December 24, 2008.
C. Stephen Allred,
Assistant Secretary, Land and Minerals Management.

0
Accordingly, for the reasons stated in the preamble and under the 
authorities stated below, the BLM amends 43 CFR part 3500 as set forth 
below.

PART 3500--LEASING OF SOLID MINERALS OTHER THAN COAL AND OIL SHALE

0
1. The authority citation for part 3500 continues to read as follows:

    Authority: 5 U.S.C. 552; 30 U.S.C. 189 and 192c; 43 U.S.C. 1733 
and 1740; and sec. 402, Reorganization Plan No. 3 of 1946 (5 U.S.C. 
Appendix).

Subpart 3501--Leasing of Solid Minerals Other Than Coal and Oil 
Shale--General

0
2. Amend Sec.  3501.10 by revising paragraph (f) to read as follows:


Sec.  3501.10  What types of mineral use authorizations can I get under 
these rules?

* * * * *
    (f) ``Lease modifications'' add adjacent acreage to a Federal 
lease. The acreage to be added:
    (1) Contains known deposits of the same mineral that can be mined 
only as part of the mining operation on the original Federal lease; or
    (2) Has the following characteristics--
    (i) Does not contain known deposits of the same mineral;
    (ii) Will be used for surface activities that are necessary in 
furtherance of recovery of the mineral deposit on the original Federal 
lease; and
    (iii) Had the acreage been included in the original Federal lease 
at the time of the Federal lease's issuance, the original Federal lease 
would have been reasonably compact.
* * * * *

0
3. Amend Sec.  3510.12 by revising paragraphs (b) and (c), and by 
adding paragraph (d), to read as follows:


Sec.  3510.12  What must I do to obtain a lease modification or fringe 
acreage lease?

* * * * *
    (b) Include a non-refundable filing fee as provided in Sec.  
3000.12, Table 1, of this chapter (the fee may be found under ``Leasing 
of Solid Minerals Other Than Coal and Oil Shale (Part 3500)''). You 
must also make an advance rental payment in accordance with the rental 
rate for the mineral commodity you are seeking. If you want to modify 
an existing lease, the BLM will base the rental payment on the rate in 
effect for the lease being modified in accordance with Sec.  3504.15.
    (c) Your fringe acreage lease application must:
    (1) Show the serial number of the lease if the lands specified in 
your application adjoin an existing Federal lease;
    (2) Contain a complete and accurate description of the lands 
desired;
    (3) Show that the mineral deposit specified in your application 
extends from your adjoining lease or from adjoining private lands you 
own or control; and
    (4) Include proof that you own or control the mineral deposit in 
the adjoining lands if they are not under a Federal lease.
    (d) Your lease modification application must:
    (1) Show the serial number of your Federal lease that you seek to 
modify;
    (2) Contain a complete and accurate description of the lands 
desired that adjoin the Federal lease you seek to modify; and
    (3) Show that--
    (i) The adjoining acreage to be added contains known deposits of 
the same mineral deposit that can be mined only as part of the mining 
operations on the original Federal lease; or
    (ii) As an alternative, show that--
    (A) The acreage to be added does not contain known deposits of the 
same mineral deposit; and
    (B) The adjoining acreage will be used for surface activities that 
are necessary for the recovery of the mineral deposit on the original 
Federal lease, and
    (C) Had the acreage been included in the original Federal lease at 
the time of that lease's issuance, the original Federal lease would 
have been reasonably compact.

0
4. Amend Sec.  3510.15 by revising paragraph (e), redesignating 
paragraphs (f) and (g) as paragraphs (g) and (h), respectively, by 
adding new paragraph (f), and by revising redesignated paragraph (h), 
to read as follows:


Sec.  3510.15  What will the BLM do with my application?

* * * * *
    (e) The lands for which you applied for a fringe acreage lease lack 
sufficient reserves of the mineral resource to warrant independent 
development;
    (f)(1) The lands for which you applied for a lease modification 
contain known deposits of the same mineral deposit that can be mined 
only as part of the mining operations on the original Federal lease; or
    (2)(i) The acreage to be added does not contain known deposits of 
the same mineral; and
    (ii) The acreage to be added will be used for surface activities 
that are necessary for the recovery of the mineral deposit on the 
original Federal lease; and
    (iii) Had the acreage added by the modification been included in 
the original Federal lease at the time of that lease's issuance, the 
original Federal lease would have been reasonably compact.
* * * * *
    (h) You meet the qualification requirements for holding a lease 
described in subpart 3502 of this chapter and the new or modified lease 
will not cause you to exceed the acreage limitations described in Sec.  
3503.37.

 [FR Doc. E9-34 Filed 1-6-09; 8:45 am]
BILLING CODE 4310-84-P