After 20-year delay, mining claimant may soon start down the long road to justice

New people, I think, have any real sense as to how much of a burden the federal government places on those who seek to develop minerals on the public domain and in the national forests. In Alaska, although there are vast deposits of valuable minerals in the ground, and although it is relatively easy to locate a mining claim, that is only the beginning of the job.

Because of statehood selections and selections made by Native corporations pursuant to the Alaska Native Claims Settlement Act, nearly one half of the state has been foreclosed to mineral entry under the General Mining Law. The Alaska National Interest Lands Conservation Act set aside an additional 108 million acres. While these withdrawals were subject to "valid existing rights," that, oftentimes, is scant comfort.

One recent matter I was involved with, I think, illustrates the point. The holder of a block of mining claims in Southeast Alaska sought to bring the claims to patent many years ago. The paperwork was complete in the 1980s, and after a few false steps, the government agency that had jurisdiction over the land in question did a "validity determination"; that is to say, a "mineral examiner" went to the property, examined the outcropping of ore on the claim, examined the drill core, and reviewed the applicant's mining plan.

After several years of contemplating the "validity" of the claim, the government agent cleared three of the claims for patent and declared that, with regard to the rest of the claims, there wasn't sufficient evidence of quality or quantity of mineralization to justify a reasonably prudent miner to expend his time and resources developing the deposit with a reasonable expectation of making a profit. Accordingly, the rest of the claims were declared "invalid."

First appeal to administrative law judge

Once a federal mining claim is declared invalid by a mineral examiner, the claimant has the right to appeal the agency's decision. The appeal, however, doesn't go to the courts; it goes, instead, to an administrative law judge who determines whether the government has made out a prima facie case of invalidity. If the judge rules it has, the claimant can then present evidence to show where the government went wrong.

In this case, the mineral in question was "magnetite," a kind of iron ore characterized by its magnetic properties. Magnetite is defined in the field through the use of a "magnetometer." Nowadays, magnetometry is an advanced science, and magnetometers are precision instruments. According to one expert, the relation of a positive magnetometer reading and the presence of magnetite is one to one. In other words, magnetometers are 100 percent accurate.

So here we have a government mineral examiner, who, the evidence established, had no experience whatsoever with magnetite or magnetometry, arrayed against an expert on magnetometry and a well-qualified expert in the economics of mining and mineral recovery.

The testimony was one-sided.

The evidence included a photograph of the mineral examiner standing in front of an outcropping on the claim.

The government's argument was that it was in isolated pod and that, by the use of a "rule of thumb," drill intercepts of magnetite at depth could not be associated with the outcropping of magnetite on the surface.

Not surprisingly, the administrative law judge found for the government.

Mining claims are rarely found to be valid if the mineral examiner thinks otherwise.

Next step board of appeals

Ironically, the area in question has been selected by an Alaska Native regional corporation, so at the conclusion of the mining contest, it may be conveyed to that corporation, which will then have the right, and possibly the inclination, to mine it.

Following an administrative hearing such as this, the losing party has the right to take its disagreement with the finding to the Department of the Interior Board of Land Appeals. The IBLA is an appellate body within the department that reviews administrative rulings and decides whether the administrative law judge erred. It is very likely that the IBLA will spend another 18 months or more to reach a decision. Only at that point, after nearly 30 years inside the administrative process, will the claim owner have the right to a day in court. See: United States v. Newman, AA-24795, Sept. 29, 2006.