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  • GDP, US$bn: 18,624.5
  • GDP per capita, US$: 56,244.1
  • Population, mn: 321.8
  • Inflation, CPI ave: 1.8
  • FX, LCY/US$: 1.0
  • Budget Balance, % of GDP: -3.1
  • Mining GVA, US$bn: 263.3
  • Mining Industry Value, US$bn: 114.1
Country: United States
Regulatory Risk Rating
75
0
100
Score: 75
Low Risk
A very high proportion of the State of Nevada is federal public land. As a result, its score more or less matches that given to the Federal rating. Within the environmental field, Nevada has adopted some helpful safe harbours that help to ensure that permitting requirements are not engaged as a result of tree blazing, soil sampling or minor trench digging; it demonstrates an understanding of the industry and a level of pragmatism befitting a state well known for its support of the mining industry.

Corruption Potential Index

Score: 100
Very Low Corruption Potential

Corruption Risk Index

Score: 95
Very Low Corruption Risk

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Environmental Overview Commentary plus sign

UNITED STATES OF AMERICA – NEVADA – ENVIRONMENTAL REGULATION

GENERAL

The United States of America (U.S.) is a nation comprised of 50 states, the federal district and capital city of Washington D.C., and several territories including Puerto Rico, Guam and the U.S. Virgin Islands. The State of Nevada, known as the “Silver State,” straddles areas of the continental U.S. denominated as west, southwest and mountain west regions of the country. The state lies largely in a geographic area known as the Great Basin, however, much of southern Nevada is situated within the Mojave Desert. A small spur of the forested Sierra Nevada mountain range, which is primarily located in the State of California, extends into the northwestern section of the state. In addition to extensive western borders shared with California, Nevada borders the states of Oregon, Idaho, Arizona and Utah.

While Nevada is the 7th largest U.S. state in area, according to the 2010 U.S. Census, it ranks only 35th with respect to population, principally because much of its territory is inhospitable due to its arid climate. The state’s flora includes desert plants such as mesquite, sagebrush and the creosote bush, as well as pine trees and wildflowers. Mammals found in Nevada include black bears, jackrabbits, Rocky Mountain elk, antelope, river otters, wild horses and burros. Banded gila monsters, western rattlesnakes, desert tortoises, trout, hawks and game birds, including pheasant and quail, are examples of other species inhabiting the state. Nevada is also home to a species of bird called the greater sage-brush grouse, which is experiencing a large decrease in its numbers. On September 24, 2015, the U.S. Bureau of Land Management, in cooperation with the U.S. Forest Service, published a notice that identified mining as a threat to sage-grouse habitat and proposed the withdrawal from mining of 10 million acres of federal lands, designated as “Sagebrush Focal Areas” (SFAs). The proposed withdrawal was for a period of up to 20 years. These lands are situated in the American states of Idaho, Utah, Nevada, Wyoming, Montana and Oregon. Pending the decision to withdraw these lands, the location of a new mining claim will be prohibited thereon for a period of two years. During this period, investigations are planned by the U.S. Department of Interior on the proposed withdrawal’s impact upon the sage-grouse population and mineral development. Valid existing mining claims are, however, exempted from this prohibition.

PRINCIPAL LEGISLATION AND REGULATOR

Where mining in Nevada occurs on federal public land or affects a resource upon which the U.S. government asserts an interest, such as air or water, U.S. federal legislation must be adhered to. The National Environmental Policy Act 1969, as amended (NEPA) (42 U.S.C. § 4321 et seq.) and its implementing regulations contained in Title 40 C.F.R. Parts 1500-1508 and Title 43 C.F.R. Part 46, is the foremost U.S. federal legislation pertaining to the environment. NEPA requires a governmental entity, that is contemplating taking a “major federal action” that may have a significant impact on the environment, to give due consideration to environmental consequences before engaging in that action (40 C.F.R. § 1508.18, See 42 U.S.C. § 4332(2)). NEPA plays a significant role with regard to operations based on mining claims and leasing on federal lands.

Although NEPA and FLPMA are at the forefront of U.S. federal legislation enacted to protect the environment, there are numerous other important federal environmental acts to be considered by a mining concern including the Federal “Clean Air Act” (42 U.S.C. § 7401 et seq.) and its later amendments, which set standards on air pollution emissions from stationary and mobile sources; the Federal Water Pollution Control Act of 1972, and its amendments (Clean Water Act) (33 U.S.C. § 1251 et seq.), which regulates the quality of surface water and the discharge of pollutants into waters of the U.S.; the Safe Drinking Water Act, as amended (42 U.S.C. § 300f et seq.) (SDWA), which controls the integrity of the national drinking water supply; the Resource Conservation and Recovery Act (RCRA) (42 U.S.C. § 6901 et seq. (1976)) and its subsequent amendments, for the control of hazardous wastes; and the Endangered Species Act of 1973, (16 U.S.C. § 1531 et seq.) (ESA), which is designed to protect endangered species of flora and fauna as well as their ecosystems.

The Bureau of Land Management (BLM), which is governed by the provisions of the Federal Land Policy and Management Act of 1976 (FLPMA) (43 U.S.C. § 1701 et seq.), is the federal agency primarily responsible for the management and protection of U.S. public land and seeks to carry out the FLPMA mandates of “multiple use” and “sustained yield” with respect to these lands and their natural resources (See 43 U.S.C. § 1702(c) and (h)). The BLM must also adhere to NEPA requirements before approval to commence mineral development on federal lands can be granted. While surface management most often falls under the purview of the BLM, at times another federal agency, such as the U.S. Forest Service (USFS), may hold jurisdiction.

The laws and regulations of the State of Nevada are codified in the Nevada Revised Statutes (Nev. Rev. Stat. ) and the Nevada Administrative Code (Nev. Admin. Code). The primary environmental regulations therein which pertain to mining include Nev. Rev. Stat. Chapter 519A and Nev. Admin. Code Chapter 519A, both entitled “Reclamation of Land Subject To Mining Operations or Exploration Projects,” Nev. Rev. Stat. Chapter 445A and Nev. Admin. Code Chapter 445A, both entitled “Water Controls;” Nev. Rev. Stat. Chapter 445B “Air Pollution” and Nev. Admin. Code Chapter 445B “Air Controls.”

The principal Nevada state agency engaged in the administration of these environmental laws and regulations is the Nevada Division of Environmental Protection (NDEP), which is a division of the State of Nevada Department of Conservation & Natural Resources (NDCNR). Within NDEP is the Bureau of Mining Regulation and Reclamation (BMRR), which has three technical branches Regulation, Reclamation and Closure. Other important bureaus within NDEP are the Bureau of Air Pollution Control (BAPC), the Bureau of Air Quality Planning (BAQP), the Bureau of Water Pollution Control (BWPC), the Bureau of Water Quality Planning (BWQP) and the Bureau of Waste Management (BWM).   The State of Nevada Division of Water Resources (NDWR), another division of the NDCNR, is also involved in environmental regulation.

NDEP is empowered to enter into a Memorandum of Understanding (MOU) (see below) with the BLM Nevada or the USFS. NDEP, through BMRR, may approve (outright or with conditions) or reject proposed reclamation plans for exploration projects or mining operations (Nev. Rev. Stat. § 519A.140). Furthermore, BMRR may, under certain circumstances, modify previously approved reclamation plans as well as suspend or revoke an exploration project or a mining operations permit subsequent to a hearing (Nev. Rev. Stat. § 519A.150).

EIA PROCESS

Nevada has a complex system of state environmental regulations that requires the procurement of numerous environmental permits and other state authorizations in respect of mining operations. Most important among them is the reclamation permit. If mining exploration or operations occur on federal land, federal environmental criteria must be adhered to in addition to those of the state before permission to mine will be granted. Most importantly, requirements for a federally approved plan of operations and a NEPA review may be triggered (see United States of America – Federal – Environmental Regulation). Where mining has taken place on federal public lands and the reclamation has been met with the approval of the appropriate federal land management agency, e.g., the BLM Nevada, the State of Nevada will not require further reclamation measures (Nev. Admin. Code § 519A.255).

Reclamation Permit

A reclamation permit application must be supported by a reclamation plan. The plan must be prepared so as to:

  • “prevent undesirable land and surface water conditions detrimental to the ecology and to the general health, welfare, safety and property rights of the residents of [Nevada]” ( Rev. Stat. § 519A.010); 
  • meet the state’s expectation that, upon completion of exploration and mining operations, the miner will leave the land suitable for other uses, such as recreational areas, the grazing of livestock, ranching or “[a]ny other activities which benefit the State of Nevada, its residents or the owner of the land” (Nev. Admin. Code § 519A.070); 
  • provide for the performance of such “actions … during or after an exploration project or mining operation to shape, stabilize, re-vegetate or otherwise treat the land in order to return it to a safe, stable condition consistent with the establishment of a productive post-mining use of the land and the abandonment of a facility in a manner which ensures the public safety, as well as the encouragement of techniques which minimize the adverse visual effects” ( Rev. Stat. § 519A.100); and
  • ensure that disturbed land will be returned to a “stability comparable to that of adjacent areas” ( Rev. Stat. § 519A.230).

 

An exemption may be applied for in the case of open pits and rock faces where reclamation is not feasible, however, the miner must take steps that will ensure public safety with respect to these areas (Nev. Rev. Stat. § 519A.230(2); Nev. Admin. Code § 519A.250). Special provisos are also provided for the reclamation of pit lakes (Nev. Rev. Stat. § 519A.230). Reclamation activities are to be “economically and technologically practicable” in relation to achieving these requirements (Nev. Rev. Stat. § 519A.230(7)).

A mining reclamation permit issued by BMRR’s Reclamation Branch is required by any mining operator who wishes to conduct mining operations and certain exploration activities, as well as related activities such as milling and beneficiation processes. A bond or other form of security is also required. An operator is defined as “any person who owns, controls or manages an exploration project or a mining operation” (Nev. Rev. Stat. §  519A.090).

 

  • Exploration: The requirement for a reclamation permit arises where an area of five or more acres of land is to be disturbed or the removal of more than 36,500 tons of earth is to occur as a result of exploration activities. (For small mining operators that do not cross these thresholds, a reclamation permit is not necessary, however, the operator must file with BMRR a sketch of any areas to be disturbed by mining activities and the reclamation methods to be applied before any disturbance of the surface area occurs; See Admin. Code § 519A.410.) Requirements for acquiring a reclamation permit for an exploration project are set forth in Nev. Rev. Stat. § 519A.180 and 190, as well as Nev. Admin. Code §§ 519A.120 and 125. These requirements include outlining the area and the proposed work in aid of determining whether any “significant environmental problems are likely to result,” as well as a reclamation plan and an estimation of reclamation costs.

 

  • Mining: Rev. Stat. § 519A.080 defines a mining operation as “all activities conducted in this state by a person on or beneath the surface of land for the purpose of, or in connection with, the development or extraction of any mineral” not including “an aggregate or sand pit or a small mining operation.” Procedures for the attainment of a reclamation permit for mining operations are detailed in Nev. Rev. Stat. § 519A.200 et seq. and Nev. Admin. Code § 519A.140 and are similar to those undertaken by an operator of an exploration project (See, Nev. Admin. Code § 519A.120). A mining operations reclamation plan is subject to more elaborate requirements than an exploration reclamation plan, however, in order to take into account the greater impact resulting from “disturbances” such as tailing impoundments, leach pads, roads and other types of surfaces facilities to be situated thereon (Nev. Admin. Code § 519A.270(1)). Pursuant to Nev. Rev. Stat. § 519A.260, a mining operator is required to file an annual report on or before April 15 with the administrator of NDEP, which outlines the land that has been affected and reclaimed by mining activities during the course of the preceding year.

 

NDEP may also require an operator of an exploration project or mining operation to undertake reclamation activities upon its direction. This can include several types of reclamation procedures involved in the reclaiming of roads, trenches, pits, buildings and so forth (Nev. Admin. Code §§ 519A.340 and 519.345).

Where an exploration project or mining operation will occur on federal public lands, a federally approved plan of operations will suffice in substitution of fulfilling the application procedures outlined above for a reclamation permit, if the plan of operations includes a reclamation plan covering the exploration or mining operation site and is accompanied by a surety that is “acceptable” to NDEP (see below). Alternatively, the surety requirement may also be satisfied by proof that a surety has been filed with the appropriate federal land management agency, e.g., BLM Nevada (Nev. Admin. Code § 519A.150). In the case where an exploration project or mining operation straddles both federal public land and privately owned land, the procedure varies and Nev. Admin. Code § 519A.155 should be consulted.

Once a reclamation permit application has been submitted, the application will be reviewed by BMRR, which will inform the applicant whether additional information is required within 15 days of the filing (Nev. Admin. Code § 519A.165). Once that information is provided, and assuming that no additional information is requested, BMRR will review the application and issue either a draft of a permit or a notice of intent to deny the application for a permit. This action will occur within 15 days after review in the case of a permit “application for an exploration project or mining operation on federal public land,” 30 days after review with respect to a permit “application for an exploration project on private land,” and 60 days after review where the application pertains to a “mining operation on private land” (Nev. Admin. Code § 519A.180). There are publication requirements with respect to the issuance of a draft of a permit or notice of intent to deny the application for permit which are set forth in Nev. Admin. Code § 519A.185.

Before making a final decision BMRR may accept written comments from any person concerning the draft permit and hold a public hearing. As well, a public hearing may be conducted upon the request of the mining operator or anyone “directly affected” by the pending permit application (Nev. Admin. Code §§ 519A.190 and 519A.195). In the event a public hearing is scheduled, any person is allowed to provide written or oral statements or other pertinent information with respect to the draft permit (Nev. Admin. Code § 519A.205). The final permit or the final decision to deny the permit application shall be issued within 15 days after the later of the public hearing, the expiration of the prescribed time to make public comment or the submission of a complete application, as the case may be (Nev. Admin. Code § 519A.175(1)). A final decision to deny a permit application may be appealed and appellate procedures are set forth in Nev. Admin. Code § 519A.415 (Nev. Admin. Code § 519A.175(3)).

A permit is effective for the life of the exploration project or for the life of the mining operation (Nev. Admin. Code §§ 519A.130 and 519A.145). Both permits are subject to suspension or revocation by BMRR in the case of a mining operator’s failure to comply with relevant state statutory provisions or with the approved reclamation plan (Nev. Admin. Code § 519A.220; see Nev. Admin. Code §§ 519A.130(1) and 519A.145(1)). Appeal procedures for such permit suspensions and revocations are set forth in Nev. Admin. Code § 519A.415. The permit is transferable to a new operator, once BMRR is satisfied that the reclamation and surety obligations will be met. The transfer of a permit to a new operator will occur within 30 days after submission of the required information and documentation, unless a later transfer date is requested (Nev. Admin. Code §§ 519A.215).

Financial assurance must be filed with either NDEP or the appropriate federal land management agency, as required. Several forms of surety may be presented including trust funds, bonds, letters of credit, guarantees by corporations licensed to do business in the state or a combination of these forms. Details pertaining to acceptable forms of these sureties are also set forth in Nev. Admin. Code § 519A.350. To determine the amount of the surety, a mining operator is required to submit an estimation of reclamation costs and BMRR will determine if such estimation is “reasonably sufficient to conduct all reclamation” (§§ 519A.360 – 519A.380). The Standardized Reclamation Cost Estimator (“SRCE”) is available through BMRR, which facilitates the required cost calculations by providing standardized cost amounts for various aspects of the mining operations; it contains a cost data file that must be utilized for all cost estimates submitted to BMRR and the BLM Nevada office subsequent to August 1, 2014.

The Nevada Water Pollution Control Permit (WPCP)

 The State of Nevada requires that every mining operation apply for a WPCP pursuant to Nev. Rev. Stat. §§ 445A.300 – 445A.730 and Nev. Admin. Code §§ 445A.350 – 444A.447. BMRR advises that application should be made approximately 180 days before any facility construction or the commencement of mining activities. These regulations apply to mining facilities, with facilities defined as “all portions of a mining operation, including, but not limited to, the mine, waste rock piles, or piles, beneficiation process components, processed ore disposal sites, and all associated buildings and structures” (Nev. Admin. Code § 445A.359). The holder of a WPCP is responsible for putting into effect “appropriate procedures to ensure that all mined areas do not release contaminants that have the potential to degrade the waters of the State” (Nev. Admin. Code § 445A.429).

Requirements for the WPCP application are set forth in Nev. Admin. Code § 445A.394 et seq. These requirements are lengthy and include “[t]he rate at which the facility is anticipated to be chemically processing ore in tons of ore per year,” hydrogeological and lithological information pertaining to subsurface areas, and a draft operating plan that will include a description of measures to be undertaken in order to monitor and control all process fluids.. According to BMRR, facilities which use chemicals to process ores ordinarily must adhere to a “zero discharge” performance standard, which is “the standard of performance for the protection of surface waters which requires the containment of all process fluids” (Nev. Admin. Code § 445A.385). Regulations respecting the operation and design of mining facilities are set forth in Nev. Admin. Code §§ 445A.424 – 445A.447.

The permit is issued by BMRR, which administers water pollution control regulations as they pertain to the mining industry through both its Regulation and Closure Branches. Among the steps involved in the BMRR approval process is a) the issuance of a draft permit or a notice of intent to deny the application, b) the publication and mailing of a written notice of intent to issue the permit or deny the application, c) the acceptance of written public comments, and d) the possible holding of a public hearing as in the case of a reclamation permit application (Nev. Admin. Code §§ 445A.401 - 445.407). Similar rules also apply with respect to timing of decision and appeal processes. The WPC permit is valid for a maximum of 5 years and may be renewed upon application (Nev. Admin. Code § 445A.409); it is also transferable (Nev. Admin. Code § 445A.419).

Other Permits

 In addition to the reclamation permit and WPCP, a mining operator also may be required to secure other permits, including: 

  • Water Discharge Permits: See Rev. Stat. §§ 445A.300 - 445A.730, i.e., the “Nevada Water Pollution Control Law”; Nev. Admin. Code §§ 445A.070 – 445.348 and Nev. Admin. Code §§ 445A.810 – 925; the federal Water Pollution Control Act of 1972, and its amendments (the “Clean Water Act”) (33 U.S.C. § 1251 et seq.); the U.S. Environmental Protection Agency’s (“EPA”) National Pollutant Discharge Elimination System (“NPDES”) permit program (40 C.F.R. Part 122; see 40 C.F.R. § 122.26; see also Nev. Rev. Stat. §§ 445.300 – 445A.730 and Nev. Admin. Code §§ 445A.070 – 445.348); 

 

  • Public Water Appropriation Permits: See Rev. Stat. Chapters 533, 534 and 535;

 

  • Nevada Air Quality Operating Permit: See Rev. Stat. §§ 445B.100 – 445B.3689 and Nev. Admin. Code §§ 445B.001 et seq. (note that AQOP’s are designated as Class 1, 2, 3 or 4, categories that are generally based on the character and the amount of pollutant emitted; they are generally valid for 5 years, with the exception of Class 1 operating permits to construct);

 

  • Solid Waste Approval: See Rev. Stat. §§ 444.440 – 444.645 ; and

 

  • Hazardous Waste Management Permits: See Rev. Stat. § 459.400 - 459.600.

 

A mining operator must also be mindful of local, i.e., city or county, governmental regulations that may require a particular authorization such as a building permit, a special use permit or a business license in connection with mining activities within their jurisdiction.

Nevada Mine Closure Requirements

The BMRR Closure Branch is empowered to oversee the proper closure of mines located in the state with few exceptions. Several closure documents must be prepared in this regard including a Tentative Permanent Closure Plan, which forms a part of the application for a BMRR WPCP, a Final Permanent Closure Plan, a Final Closure Report and a Request for Final Closure. The Final Permanent Closure Plan, which includes monitoring provisions not to exceed 30 years, is submitted to BMRR 2 years prior to the closure of the mine (Nev. Admin. Code § 445A.446 and see 445A.447). Permanent closure is only complete after all other environmental regulatory requisites provided for under Nev. Admin. Code §§ 445A.429 – 445A have been accomplished, e.g., the stabilization of tailings. Both state and federal agencies are involved with overseeing closure activities of mining operations located on federal public lands. It should therefore be noted that the state and federal definitions of what constitutes a “closure” varies.

State, Local and Tribal Involvement in the Federal EIS Process:

State and local agencies, as well as Native American tribes, may become involved in the preparation of the EIS as a “cooperating agency” (CA) as defined in 40 C.F.R . § 1508.5. For example, the BLM Nevada, as lead agency and federal land manager, is required to invite other eligible inter-governmental partners, e.g., NDEP, to join the NEPA process. An eligible partner may also request to be invited into the process. The federal aspiration behind the concept of the “lead” and “cooperating” agency is to attain, through the engagement of local expertise in the preparation of an EIS and/or Resource Management Plan (RMP), an understanding of local issues, a resolution of local and federal conflicts and the joint shaping of plans and policies with respect to activities such as mining. Through this method of cooperation, the BLM Nevada and NDEP may integrate their efforts on matters such as reclamation plans, surety requirements and closure activities. As a corollary to the effort made to consider the various interests of impacted entities, the State of Nevada has created a Tribal Liaison Program that allows NDEP and the Inter-Tribal Counsel of Nevada to work together on environmental issues.

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Mining Overview Commentary plus sign

UNITED STATES OF AMERICA – NEVADA – MINING REGULATION

GENERAL

The United States of America (U.S.), Department of Interior, U.S. Geological Survey, Mineral Commodities Survey 2015, ranked Nevada second in the U.S. for mineral production. The discovery of the Comstock Lode in 1859, in an area then known as the Western Utah Territory, and the ensuing silver rush, paved the way towards the creation of the State of Nevada, as well as its official nickname, the “Silver State.” Nevertheless, in modern day Nevada it is the mining of gold, not silver, that is of greater importance to the state and the nation. More than 75% of the gold produced in the U.S is mined in Nevada from major, world-class deposits that have produced for decades and formed the foundation of some of the world’s leading mining companies. Other important minerals include copper, silver, lime and diatomite, while lithium, barite, gypsum, dolomite, molybdenum, precious opals, magnesium oxide and perlite are also mined. The Nevada Revised Statutes highlight the significance of the industry by declaring that “[t]he extraction of minerals by mining is a basic and essential activity making an important contribution to the economy of the State of Nevada.”   

Approximately 85% of Nevada’s territory is U.S. federal public land and this accounts for the location of 49% of all federal mining claims, according to the U.S. Bureau of Land Management (“BLM”). The state government generally supports the industry through its laws and regulations, albeit the competition arising between the mining sector and environment regulation has resulted in a complex environmental regulatory process that interacts with federal legislation. Citing “permitting delays” as the “most significant risk to mining projects in the United States,” the compilers of the Behre Dolbear 2014 Ranking of Countries for Mining Investment: “Where not to Invest” consider Nevada to be a “mining friendly” jurisdiction and an exception to this risk although “negatively impacted by federal rules” that lead to “a seven to ten year waiting period before mine development can begin.”

The Fraser Institute Annual Survey of Mining Companies 2015 ranked Nevada 3rd globally out of 109 jurisdictions on its Investment Attractiveness Index and within the top ten jurisdictions on its Policy Perception Index (6th). On the Best Practices Mineral Potential Index, Nevada dropped to 5th position from 2nd in the prior year, and dropped to 8th position from the 6th position it held in the prior year on the Current Mineral Potential Index.

PRINCIPAL LEGISLATION AND REGULATION

Nevada, as with other states, governs its citizens through state constitutional law, statutory laws, regulations promulgated by state administrative agencies, as well as common law judicially developed through court decision. Where a federal interest is involved, however, U.S. federal legislation may override or act concurrently with state law. Given the scale of federal public lands within Nevada, U.S. federal laws and regulations are of particular relevance and importance. Nevertheless, Nevada does regulate certain aspects pertaining to the establishment and maintenance of mining claims that lie on federal lands, under the proviso that such state laws do not conflict with federal laws (see U.S. Const., Art. VI; see also 30 U.S.C. § 26). Nevadan laws and regulations are codified in the Nevada Revised Statutes (Nev. Rev. Stat.) and the Nevada Administrative Code (Nev. Admin. Code). Particularly relevant to mineral interests are Nev. Rev. Stat. Title 46 “Mines and Minerals;” Nev. Rev. Stat. Chapter 517 “Mining Claims, Mill Sites and Tunnel Rights;” Nev. Admin. Code Chapter 517 “Mining Claims;” Nev. Admin. Code Chapter 513 “Commission on Mineral Resources; Division of Minerals;” and Nev. Rev. Stat. Title 32 “Revenue and Taxation,”Chapter 362 “Taxes on Patented Mines and Proceeds of Minerals.”

The primary state governmental agencies that regulate mining in Nevada are the State of Nevada Department of Conservation & Natural Resources (NDCNR) and its Nevada Division of Environmental Protection (NDEP); the Bureau of Mining Regulation and Reclamation (BMRR), which operates within the NDEP; and the State of Nevada Commission on Mineral Resources, Division of Minerals. The U.S. Department of Interior, Bureau of Land Management (BLM), is the principal federal agency charged with the management and protection of federal public lands. The BLM is responsible for the subsurface management of nearly all federal lands as well as subsurface federal mineral interests reserved in non-federal lands, i.e., state and privately owned lands (also known as “split estates”). Other federal agencies may have surface jurisdiction over federal lands, such as the U.S. Forest Service (USFS), the National Park Service (NPS) and the U.S. Fish and Wildlife Service (FWS) although much of the land administered by the latter two agencies is generally not open to mineral development. In addition, the Department of Defense - U.S. Army Corps of Engineers (USACE) has jurisdiction over the navigable waters of the United States.

“BLM Nevada,” through its State, district and field offices, is the lead agency involved in the permitting process where federal lands are considered, particularly in connection with authorizations required pursuant to federal environmental laws. It oversees the implementation of the General Mining Law of 1972, as amended (30 U.S.C. §§ 22-54 and §§ 611-615), which pertains to patented and unpatented mineral rights to locatable minerals situated on federal public lands; the Mineral Leasing Act of 1920 (Leasing Act), as amended (30 U.S.C. § 181 et seq.), which governs the development of “leasable” minerals on federal lands; the Mineral Materials Act of 1947, as amended (30 U.S.C. § 601 et seq., see 43 C.F.R. §3600 et seq.) and the Surface Resources Act of 1955 (30 U.S.C. §§ 601-615, see 43 C.F.R. § 3830.11), both of which regulate salable minerals; as well as the primary U.S. environmental legislation, the National Environmental Policy Act of 1969, as amended (NEPA) (42 U.S.C. §4321 et seq.). See Commentary – United States of America – Federal - Mining Regulation.

GRANTS AND FORMS OF MINERAL TITLE

Under the General Mining Law of 1872 (General Mining Law), there are two forms of mineral rights – the unpatented mining claim and the mineral patent. Since October 1, 1994, however, a budget moratorium imposed by Acts of Congress has prevented the acceptance of new patent applications by the BLM. This commentary deals primarily with the interaction of federal and Nevada state law relative to unpatented mining claims, with a particular emphasis on lode (hard rock) mining claims. For a review of the General Mining Law, as well as a discussion of federal laws pertaining to the leasing of certain industrial minerals pursuant to the Mineral Leasing Act of 1920, as amended (30 U.S.C. § 181 et seq.), see United States of America – Federal – Mining Overview Commentary. For state legislation on the requirements for the location of placer mining claims, mill sites and tunnel rights see Nev. Rev. Stat. §§ 517.090 – 517.110, Nev. Rev. Stat. §§ 517.120 – 517.140 and Nev. Rev. Stat. §§ 517.150 – 517.180, respectively.

Lode Mining Claims: Nev. Rev. Stat. § 517.010 provides that “[a]ny person who is a citizen of the United States, or who has legally declared his or her intention to become a citizen of the United States, who discovers a vein or lode may locate a lode mining claim thereon . . .” A citizen may include a corporation duly organized in any U.S. state. Although, U.S. federal law provides that “United States citizens who have reached the age of discretion under the law of their State of residence” may locate a claim, it is notable that a minimum age for a miner is not set forth in Nevada law therefore connoting flexibility with respect to this requirement (43 C.F.R. § 3830.3).

 

  • Location: Once a discovery has been made, a lode mining claim is established by properly locating the mining area with a) the erection of a monument on the centerline of the vein, b) the posting of a notice of location on the monument (that includes information required pursuant to Rev. Stat. § 517.010), c) the proper recording of a certificate of location and d) the further erection of corner monuments, thereby defining the mining claim boundaries, within 60 days after the posting of the notice of location on the discovery monument (Nev. Rev. Stat. §§ 517.010, 517.030 and 517.050). A mining claim on federal land may not be larger than 1500 feet in length and 600 feet in width, consisting of 300 feet on either side of the centerline of the vein, (i.e. 20.66 acres). There is no limit to the number of mining claims that can be legally located. In the tradition of ground-staking, one must blaze and mark trees, “[cap] a rock in place with smaller stones,” place metal posts or wood posts into the ground and otherwise comply with measures to make manifest, on the ground, the evidence of staking (Nev. Rev. Stat. § 517.030).

 

  • Recording: Once the monuments have been correctly erected and situated, a map must be prepared (in duplicate) which illustrates the location of the mining claims. Furthermore, “the description must also state the township and range, and if the lands are surveyed lands, the quarter section and section in which the landmark and the mining claim are situated” ( Rev. Stat. § 517.140(1)). “Within 90 days after the date of location,” both copies of the map must be filed, upon payment of a fee, with the county recorder of the county wherein lies the claim. Upon the filing of the map, a certificate of location, again in duplicate, shall also be filed with the county recorder and the pertinent recording and filing fees must be paid (Nev. Rev. Stat. § 517.050, see Nev. Rev. Stat. § 517.185 and Nev. Admin. Code § 517.200). The filing of a certificate of location constitutes “prima facie evidence in all courts of justice of the first location of that claim” (Nev. Rev. Stat. § 517.190). In addition to these state recording requirements, where a mining claim is located on federal public lands, a copy of the notice or certificate of location and a map must be filed in the BLM Nevada State Office within 90 days from the date of the location of the mining claim. A processing fee, a one-time location fee, and an initial maintenance fee (infra) must be paid at the time of this recording (43 C.F.R. § 3830.21).

 

  • Annual Maintenance: A mining claim located on federal public lands must be maintained in order to preserve the miner’s mineral rights. A mining claimant is required to pay an annual maintenance fee “on or before September 1st of each year in order to maintain a mining claim or site for the upcoming assessment year” (43 C.F.R. 3834.10). The payment of the maintenance fee will satisfy the annual assessment work requirement under federal law as set forth in the Federal Land Policy and Management Act (“FLPMA”) (43 C.F.R. § 3834.11). A failure to timely pay the annual maintenance fee (and the initial maintenance fee) will result in a forfeiture of the established mining claims and sites (43 C.F.R. § 3830.91). (Small miners may perform assessment work in lieu of the maintenance fee; 43 C.F.R. § 3835.1 et seq. and Nev. Rev. Stat. § 517.230).

 

Federal law provides that an interest in an unpatented mining claim may be transferred, in whole or in part. Transfer documents must conform to the state law of the jurisdiction in which the mining claim site lies. In addition, a notice of transfer must also be filed, and a processing fee paid, at the local BLM office (43 C.F.R. Part 3833, Subpart C, see Forbes v. Gracey, 94 U.S. 762 (U.S. Sup. Ct. 1876)).   Nevada state law provides that “conveyances of mining claims shall require the same formalities and shall be subject to the same rules of construction as the transfers and conveyances of other real property” (Nev. Rev. Stat. § 517.370). Nev. Rev. Stat.Title 10 should be referred to for Nevada laws pertaining to property rights and transactions.

There are no royalties payable with respect to hard rock mining claims located on federal public lands, however, mining taxes are payable on income from certain industrial minerals produced from land under lease from the federal government by virtue of the Leasing Act (See 43 C.F.R. §§ 3504.20 - 3504.26).

Pursuant to Article 10 of the Constitution of the State of Nevada, the government is permitted to collect an ad valorem property tax of up to 5% of the net proceeds of minerals and patented mining claims. The tax is assessed when the minerals are sold or removed from the State of Nevada (Nev. Rev. Stat. § 362.120). This tax applies to all minerals, including oil and gas and geothermal energy, with the exception of sand and gravel. The rate of tax upon net proceeds is set forth in Nev. Rev. Stat. § 362.140 and is on a sliding scale of between 2% and 5% based upon a ratio of net proceeds to gross proceeds. Mining operators must file a statement with respect to gross yield and claimed net proceeds based upon the prior year’s production, annually, on or before February 16 (Nev. Rev. Stat. § 362.110). Furthermore, a mining operator must file, annually, on or before March 1, an additional statement “showing the estimated gross yield and estimated net proceeds from each such operation for the entire current calendar year and an estimate of all royalties that will be paid during the current calendar year” (Nev. Rev. Stat. § 362.115). Federal taxes are also payable on mining proceeds.

DEVELOPMENT CONSIDERATIONS

 The U.S. federal government recognizes hundreds of American Indian tribes. Both surface areas and subsurface mineral estates of land are held in trust for these tribes and are administered by the Bureau of Indian Affairs (BIA), a bureau within the U.S. Department of Interior. Tribal lands are not open to mining claims. However, tribal authorities may lease tribal land pursuant to the Indian Mineral Leasing Act of 1938 (25 U.S.C. § 396 et seq.), subject to the approval of the Secretary of the Interior. Furthermore, the Indian Mineral Development Act of 1982 (IMDA) (25 U.S.C. §§ 2101-2108) permits Indian tribes to enter into private negotiations and joint ventures with mineral developers for the exploration and extraction of minerals subject to BLM's approval. In an effort to facilitate interactions between state and federal agencies and tribes with respect to mining activities, the State of Nevada has instituted a Tribal Liaison Program that permits the NDEP and the Inter-Tribal Counsel of Nevada to work together on environmental issues.

The Division of Industrial Relations of the Nevada Department of Business and Industry, specifically the Mine Safety and Training Section (MSATS), ensures compliance with the miner safety laws set forth in Nev. Rev. Stat. Chapter 512 entitled “Inspection and Safety of Mines.” These laws include the preparation of annual reports by mining operators with respect to “production, employment, mine activity and status, accidents, bodily injuries, loss of life, occupational illnesses and related data” (Nev. Rev. Stat. § 512.160). Annual inspections are conducted in order to determine: compliance with safety regulations, the existence of dangerous conditions or practices that caused prior accidents or injury at a mining facility. The agency is empowered to undertake measures to prevent the occurrence of an accident or injury where it has determined that an imminent danger is present (Nev. Rev. Stat. § 512.190).

A mine operator must submit a mine registration form to the administrator of the Division of Minerals of the Commission on Mineral Resources within 30 days of the commencement of mining operations (Nev. Admin. Code § 513.100). The operator must also notify the administrator in writing of the opening or closing of a mining operation. Details concerning the information to be provided with respect to such openings or closing are listed in Nev. Admin. Code § 513.110. In addition to the foregoing requirements, a mining operator is required to prepare and submit an annual report on or before April 15 “relating to the annual status and production of the mine for the preceding calendar year” to said administrator (Nev. Admin. Code § 513.120).

ENVIRONMENTAL REGULATION

See Nevada Environmental Overview Commentary.

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