Alaskan Mineral Rights

History

• Alaskan mineral rights are based upon prior discovery and prior rights, meaning that the first to discover mineral-rich locations has the priority right to prospect for and subsequently extract minerals. Governing regulations have been built around this concept, granting rights to first discoverers, who maintain rights as long as labor is expended upon prospecting and extracting, and fees, rents and royalties are paid accordingly.
  
  

Function

• Upon discovery of a potentially mineral-rich location, claimants must provide location information to the Division of Mining, Land and Water. The legal description should include the meridian, township, range, section and claim, labeled as MTRSC locations. Once recorded, the mining claim grants immediate property rights to extract minerals in addition to surface uses necessary for extraction and basic processing of deposits.
  
  

Considerations

• There are two other types of mineral location data that can be recorded. A leasehold location is similar to a place holder. The claimant of this right knows he has to mine the location at some future date, but must convert the lease to an upland mining claim before mining operations can begin. The purpose of a leasehold claim is to keep track of claims avoiding conflict over resources. If other valuable resources are present, the lease contains stipulations that avoid conflicting operations. The leasehold claim is necessary for operators to secure mineral title tenure necessary during the lengthy financing process.
  
  The other type of location data recorded by the Division is for prospect sites, where minerals are suspected to lie, but additional prospecting must occur. The holder of this type of claim has two years for discovery, at which time the claim must be converted to other types or abandoned.
  
  

Significance

• The Division of Mining, Land and Water contains locational data on all of Alaska's mineral rights. Currently, there are 50,000 claims and leases; 6,000 prospecting sites; 75 upland mining leases; 44 coal leases and 32 offshore mining leases registered that occur on state-owned lands. More importantly, the Division records affidavits of annual labor and processes royalty payments.
  
  

Benefits

• Every mineral claim on Alaskan land pays rent to the state. Rental rates are dependent upon the years since the claim was first located. Within five years of being located, rents are $0.66/acre; if 11 years have lapsed, rents are $3.30/acre. Once minerals are extracted, rights holders must pay production royalty to the state, calculated based on revenues generated from minerals produced on state land.
  
  The Division of Mining, Land and Water keeps all mineral rights records and processes payments. In 2005, $25.4 million was paid to the state of Alaska in royalties, fees and taxes.