Lead and Zinc Mining Operations and Leases on Quapaw Indian Lands

Federal RegisterAug 27, 1996

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DEPARTMENT OF THE INTERIOR

Bureau of Indian Affairs

25 CFR Part 215

RIN 1076-AD35

Lead and Zinc Mining Operations and Leases on Quapaw Indian Lands

AGENCY: Bureau of Indian Affairs, Interior.

ACTION: Proposed rule.

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SUMMARY: We are proposing to revise our regulations for lead and zinc

mining. The purpose is to update the

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operations and procedures for the leasing of and operations for the

discovery, testing, development, mining, and processing of all lead and

zinc minerals on the lands of Quapaw Indians under the jurisdiction of

the Miami Agency in Ottawa County, Oklahoma. This action is to assist

Indians with the orderly and efficient development of their natural

resources of lead and zinc deposits, and to insure operations are

conducted without loss or damage to the environment or other resources.

DATES: You may send us written comments. We must receive them by

October 28, 1996.

ADDRESSES: You must mail or hand carry your comments to Terrance

Virden, Acting Director, Office of Trust Responsibilities, Bureau of

Indian Affairs, 1849 C Street N.W., MS 4513-MIB, Washington, DC 20240.

FOR FURTHER INFORMATION CONTACT: Mr. John Dalgarn, Bureau of Indian

Affairs, Miami Agency, P.O. Box 391, Miami, OK 74355-0391; telephone

(918) 542-3396.

SUPPLEMENTARY INFORMATION: We are publishing this revised rule by the

authority delegated by the Secretary of the Interior to the Assistant

Secretary--Indian Affairs by 209 DM 8.

Our policy is to give the public an opportunity to participate in

the rulemaking process by submitting written comments on the proposed

rule. We will consider all comments received during the public comment

period. We will determine necessary revisions and issue the final rule.

Please refer to this preamble's ADDRESSES section for where you must

submit your written comments on this proposed rule.

We have certified to the Office of Management and Budget (OMB) that

these proposed regulations meet the applicable standards provided in

Sections 2(a) and 2(b)(2) of Executive Order 12778.

This rule is not a significant rule under Executive Order 12866 and

does not require approval by the Office of Management and Budget.

We determined this proposed rule:

(a) Does not constitute a major Federal action significantly

affecting the quality of the human environment, and no detailed

statement is needed under the National Environmental Policy Act of

1969;

(b) Does not have significant takings implications in accordance

with Executive Order 12630;

(d) Will not have a significant economic impact on a substantial

number of small entities under the Regulatory Flexibility Act (5 U.S.C.

601 et seq.).; and

(e) Imposes no unfunded mandates on any governmental or private

entity and is in compliance with the provisions of the Unfunded

Mandates Act of 1995.

The information collection requirements contained in this rule do

not require the approval of the Office of Management and Budget under

44 U.S.C. 3501 et seq.

The primary author of this document is John Dahlgarn, Bureau of

Indian Affairs, Department of the Interior.

List of Subjects in 25 CFR Part 215

Indian-lands, Lead, Zinc.

For the reasons set out in the preamble, we propose to revise Part

215 of Title 25 of the Code of Federal Regulations, as follows:

Part 215--Lead and Zinc Mining Operations and Leases on Quapaw

Indian Lands

Sec.

215.0 Definitions.

215.1 Purpose.

215.2 Scope.

215.3 No operations until a lease is approved.

215.4 How are leases offered?

215.5 How are lands selected for a lease auction?

215.6 How do we advertise the lease auction?

215.7 How do I bid for a lease?

215.8 What must your bid include?

215.9 How do we conduct public auctions?

215.10 What happens after the public auction?

215.11 What happens if we reject your bid or do not award you a

lease?

215.12 What happens if you fail to execute a lease?

215.13 How are royalty rates determined?

215.14 Who do you pay?

215.15 Who pays the gross production tax due to the State of

Oklahoma?

215.16 Lessee must have local representation.

215.17 How long are leases?

215.18 What forms are used?

215.19 Who can execute (sign) leases?

215.20 What is required for corporate leases?

215.21 What bonds are needed?

215.22 Can leases be assigned?

215.23 Can leases of developed land be extended?

215.24 Will we deny requests for lease extensions?

215.25 Can new leases be granted if a lease has been forfeited or

abandoned?

215.26 Exploration and mining operations.

215.27 When can operations and production be suspended?

215.28 Who owns the mine tailings?

215.29 How are mine tailings disposed of?

215.30 What can chat be used for?

Authority: Sec. 26, 41 Stat. 1248; 50 Stat. 68; Sec. 2, 53 Stat.

1127; 84 Stat. 325; 104 Stat. 206.

Sec. 215.0 Definitions.

Allottee means an Indian that has been allotted land, or an Indian

owner of land or interest as an heir or devisee in unpartitioned lands

under the supervision of the Government.

BLM means Supervisor, Geologic, Engineering and Mining Services

Team of the Bureau of Land Management.

Chat means the piles of mine waste and gravity concentration

tailings resulting from the operation of the lead-zinc mines.

Incompetent Indian means an Indian who we declared unable to

improve or manage his or her restricted or trust lands. This includes

minors and those Indians who are incompetent under State law.

Leased lands, leased premises, or leased tract means restricted or

trust lands under a lease.

Lessee means any person, firm, or corporation, their legal

representatives, heirs, or assigns, who has obtained a lease.

Lessor means any Indian owning or having an interest in restricted

or trust allotted or inherited lands that has been leased.

Mining operations means drilling, mining, or construction on leased

lands.

We means the U.S. Government, Department of the Interior, Bureau of

Indian Affairs, and anyone who is authorized to represent us in matters

covered in this part.

You means an allottee, lessee, lessor, or other interested persons.

Sec. 215.1 Purpose.

The purpose of the regulations in this part is to assist you with

the orderly and efficient development and production of your natural

resources (lead and zinc) without waste or avoidable loss of or damage

to deposits; avoid, minimize or correct damage to the environment,

land, water and air or other resources; and to obtain a proper record

and accounting of all minerals produced.

Sec. 215.2 Scope.

The regulations in this part apply to the leasing of and operations

for the discovery, testing, development, mining, and processing of all

lead and zinc minerals on Quapaw Indian lands under the supervision and

jurisdiction of the Miami Agency, Oklahoma.

Sec. 215.3 No operations until a lease is approved.

No operations are allowed upon any restricted or trust lands

allotted to or inherited by an Indian until we approve

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the lease covering the land and the activity.

Sec. 215.4 How are leases offered?

We will offer lead and zinc mining leases at public auction to the

highest responsible bidder.

Sec. 215.5 How are lands selected for a lease auction?

(a) Any one or a combination of Indian owners may request us to

offer the lead and zinc minerals on any of their restricted or trust

lands for sale at a lease auction.

(b) Before a tract of unpartitioned land will be offered for lease

at a public auction, a majority of the interest owners must agree to

the request.

Sec. 215.6 How do we advertise the lease auction?

(a) We will publish at least four notices starting 30 days before

the public auction. The notices will be in a newspaper of general

circulation in the county where the land is located, and in at least

one nationally circulated mining trade journal.

(b) The public auction notice will include the following

information:

(1) Date of auction;

(2) Time of auction;

(3) Place of auction; and

(4) How, who, and where to obtain information on participation in

the auction.

Sec. 215.7 How do I bid for a lease?

(a) You may submit sealed bids by mail to the address in the

notice. We must receive your bid before the public auction begins.

(b) You may submit your bid at the public auction.

auction. The agent must have your power of attorney to bid for you.

Sec. 215.8 What must your bid include?

Bids must include:

(a) Your offer of the stipulated and fixed royalty;

(b) Your bonus payment offer; and

and 25 percent of your bonus payment offer.

Sec. 215.9 How do we conduct public auctions?

(a) At the announced auction time, we will announce the bidder, the

amount, and terms of each sealed bid received.

(b) After the announcement of the sealed bids, public bidding will

begin. All bidders present can bid, whether or not you submitted a

sealed bid. Bidding is only on the bonus payment.

highest and best bid as the highest bonus offer.

(d) We reserve the right to reject any or all bids.

Sec. 215.10 What happens after the public auction?

(a) We review and select the highest and best bid for each tract

offered in the auction.

(b) We inform the owners of the bid selections.

of their lands and other necessary information to fully advise them of

the current status and mining potential of their lands.

(d) The owners accept the bid offer and execute (sign) the lease.

(e) We will notify you when you are awarded a lease.

(f) You will have 30 days after notice to execute the lease by the

terms of your bid and the regulations in this part.

(g) We will finalize the lease documents by approving the completed

lease package.

Sec. 215.11 What happens if we reject your bid or do not award you a

lease?

If your bid is not accepted or you are not awarded a lease, your

bid deposit will be returned to you.

Sec. 215.12 What happens if you fail to execute a lease?

If we award you a lease and you fail to execute it, you will

forfeit the money included with your bid. We will give these funds to

the land owner(s).

Sec. 215.13 How are royalty rates determined?

(a) If a lease is offered for sale at public auction, we will set

the royalty rate before the auction at a fixed percentage of gross

proceeds of all lead and zinc ores and concentrates extracted. We will

determine the royalty rate for each lease individually.

(b) If a lease is not offered for sale at public auction, we will

determine the royalty rate or approve a negotiated rate for each lease.

(1) The royalty rate must not be less than the highest and best

obtainable market price for lead and zinc ores and concentrates. We

will determine this minimum price at the usual and customary disposal

points at the time of the sale.

(2) We reserve the right to determine the market price if it is

necessary to protect the interests of the Indian lessor.

(3) We reserve the right, when it is in the best interest of the

Indian lessor, to require you to store the royalty share of ore instead

of selling it. If we do this, we will notify you in advance. You must

store the ore in your ore bins at no cost to the lessor. You will not

be required to store more than one-third of your bin capacity or for

longer than 6 months.

Sec. 215.14 Who do you pay?

We must collect all payments for rents, royalties, bonus, and any

other payments. We will then deposit the funds to the credit of the

Indian lessor(s).

Sec. 215.15 Who pays the gross production tax due to the State of

Oklahoma?

(a) We will pay the Indian owners share of the gross production tax

to the State from their royalty income.

(b) You are responsible to pay your share of the gross production

tax.

Sec. 215.16 Lessee must have local representation.

(a) You must designate a local or resident representative within

Ottawa County, Oklahoma. You must also give us the representative's

name and mailing address.

(b) We will notify and communicate with your local representative

in securing compliance with our regulations and the terms of your

lease.

primary representative is not available to us.

(d) If no designated local representative is available, any of your

employees, contractors, or other person in charge of mining operations

on the leased land will be considered your local representative for the

purpose of serving a notice to you.

(e) We will consider you to be notified when we mail the notice to

you or your local representative's last known address.

(f) Your response time begins with the day a notice is mailed or

received in person by you or your local representative.

Sec. 215.17 How long are leases?

Lead and zinc mining leases can be for 10 years. We may limit

leases to less than ten years.

Sec. 215.18 What forms are used?

We will prescribe the appropriate form for applications, leases,

other information, and collection requirements.

Sec. 215.19 Who can execute (sign) leases?

(a) A lease contract can be executed by competent adult Indian

owners.

(b) We will execute and approve leases for:

(1) Minors;

(2) Incompetent owners;

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(3) Undetermined heirs of a decedents's estate;

(4) Owners who can not be located; and

(5) Owners who have given us written authority to sign for them.

Sec. 215.20 What is required for corporate lessees?

(a) If the applicant for a lease is a corporation, your first

application must include evidence that your officers can execute the

lease. You must also submit:

(1) A certified copy of your articles of incorporation;

(2) If you are not a Oklahoma corporation, evidence that you are in

compliance with the corporation laws where you are incorporated;

(3) List of officers, principal stockholders, and directors, with

their addresses and the number of shares they possess;

(4) A sworn statement of your officers showing:

(i) The total number of shares of capital stock issued and the

amount of cash recovered into your treasury for each share sold or, if

paid in property, the kind, quantity, and value paid per share;

(ii) The amount per share of sold stock that is not paid for and

subject to assessment;

(iii) The amount of cash in your treasury and elsewhere and its

source;

(iv) The value of your property; and

(v) The amount of your indebtedness and the nature of your

obligations.

(b) You must submit a statement of changes in officers and

stockholders by January 1 of each year. We may request this statement

at other times during the year also.

the companies or persons or firms that have interest in lead and zinc

mining leases or Indian land in Ottawa County, Oklahoma, and if the

stock is held in trust or not.

(d) If you are required to submit any other applications, you will

only have to show the aggregate amounts of your assets and liabilities.

Sec. 215.21 What bonds are needed?

(a) Lessees must provide a surety bond when executing a lead and

zinc lease.

(b) The surety bond must be with a surety company(s) that is

acceptable to us.

deferred installments of the bonus, royalties, rentals, and the

performance of all covenants and agreements by you.

(d) The amount of the surety must cover the costs of repair and

restoration of the surface and natural resources.

(e) Minimum bond amounts are:

------------------------------------------------------------------------

Minimum

Acreage of lease amount of

bond

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Less than 80 acres......................................... $50,000

More than 80 but less than 120 acres....................... 100,000

120 or more acres.......................................... 250,000

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(f) We may reduce the amount of the bond below the minimum amounts

with the consent of the lessor.

(g) You may execute a penal bond to us with your power of attorney

in lieu of a surety. You can then submit United States bonds or notes

in the total amount prescribed in paragraph (c) of this section.

(h) You may provide one aggregate bond instead of several

individual bonds to cover all leases you have. We will determine the

amount of the aggregate bond.

(i) We may increase the amount of any bond if necessary to protect

the interests of the Indian lessor.

Sec. 215.22 Can leases be assigned?

(a) Yes. Leases can be assigned, subleased, or sublet only with our

approval of the terms and conditions of the assignment, sublease, and,

or subletting contract.

(b) You must notify us of any proposed assignment. The assignee

must submit a financial statement and bond. We will then notify all

restricted Indian land owners of the proposed assignment. They will

have ten days to file written objections to the assignment. We will

then approve or disapprove the assignment.

Sec. 215.23 Can leases of developed land be extended?

(a) Yes. If you request and it is in the best interest of the

Indian lessor, we may approve a new lease or extend an existing lease.

(b) New leases or extensions can be granted to lessees, assignees,

sublessees, mining contractors, or other parties who have expended

capital in the mining or development operations under the existing

lease.

(d) We must approve the bonus payment and royalty for the new lease

or extension.

(e) We will not consider a request for a new lease or extension

until the final year of the existing lease.

Sec. 215.24 Will we deny requests for lease extensions?

(a) Yes. If any of the following circumstances exist, we may deny

your request:

(1) If a new lease or extension is not in the best interest of the

Indian lessor;

(2) If any of the land under the extension request is encumbered by

another existing lease, sublease, assignment, or mining contract; or

(3) If any owner or person claiming rights or interests files an

objection.

(b) We will notify you about requests for extensions if our records

or the district court records show you have rights or interest in any

land involved.

after receipt of our notice.

(d) If an objection is submitted, they will have 20 days to submit

a statement supporting their objection.

(e) The extension applicant will have 10 days to defend their

application from objections.

(f) We will decide to approve or deny the extension based on the

facts we receive.

Sec. 215.25 Can new leases be granted if a lease has been forfeited or

abandoned?

Yes. If a lease on land where lead and zinc ores were discovered

was canceled, forfeited, or expired, we can approve a new lease. If you

apply for a new lease, your application must contain special offers for

the terms and conditions of the new lease.

(a) We will consider your offer and if it is in the best interest

of the Indian owner(s), we will approve it.

(b) If your offer is not in the best interest of the Indian

owner(s), we will reject your offer.

auction described in Sec. 215.9.

Sec. 215.26 Exploration and mining operation.

(a) Lessees must provide the BLM all notices, reports, drill logs,

maps, records, and other information on mining operations required by

us. The BLM will maintain a file for us.

(b) The files maintained by the BLM will be available for

inspection by employees of BIA. Employees of the BLM will provide the

BIA any information and technical advice we need. The BIA will provide

the same service to the employees of the BLM.

have the authority to issue and amend orders to mining operators on

production and operations. These orders will be prepared cooperatively

with the BIA.

(d) Leases granted or approved under this part shall be subject to

the

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provisions found in 43 CFR Parts 3590 through 3599, inclusive, and are

implemented in this part with relationship to:

(1) Exploration and mining operations.

(2) Obligations of lessees and permittees.

(3) Maps and plans.

(4) Bore holes and samples.

(5) Mining methods.

(6) Protection against mining hazards.

(7) Milling waste from mining or milling.

(8) Production records and audit.

(9) Inspection, issuance of orders, and enforcement of orders.

(10) Late payment or underpayment of charges.

Sec. 215.27 When can operations and production be suspended?

We may authorize the suspension of the operating and producing

requirements on mining leases for minerals other than oil and gas

whenever we find that marketing facilities are inadequate or economic

conditions unsatisfactory. You may apply for relief from all operating

and producing requirements to the BLM in triplicate and give a copy to

us. Complete information must be furnished showing the necessity for

relief. Suspension of operations and production will not relieve you

from the obligations of continued payment of the annual rental or the

minimum royalty.

Sec. 215.28 Who owns the mine tailings?

Mine tailings, mine refuse, ``chat'' and tailing piles are the

property of the lessors from whose lands the ores were removed and in

the percentage attributed thereto.

Sec. 215.29 How are mine tailings disposed of?

Disposal of mine tailings, mine refuse, ``chat'' or tailing piles

for purposes other than the recovery of lead and zinc concentrates must

be in the methods and manner we decide is appropriate and in the best

interest of the Indian owners.

Sec. 215.30 What can chat be used for?

(a) Chat must only be used for applications that are within one of

the following categories:

(1) Applications that bind the chat into a durable product (for

example, use as an aggregate in batch plants preparing asphalt or

concrete);

(2) Applications where the chat is applied below paving on asphalt

or concrete roads or parking lots;

(3) Applications where the chat is used as a raw product for

manufacturing a safe product (for example, glass manufacturing); or

(4) Applications where the chat is covered with at least twenty-

four (24) inches of clean material in areas that are not likely to be

used for residential or public area development (for example, deep fill

on industrial sites).

(b) Any other applications, including residential applications, are

prohibited. Use of chat for any unauthorized applications may result in

immediate termination of a chat purchase contract, prosecution for

trespass, or other sanctions.

subject to the provisions in 25 CFR part 216.

Dated: August 6, 1996.

Ada E. Deer,

Assistant Secretary--Indian Affairs.

[FR Doc. 96-21741 Filed 8-26-96; 8:45 am]

BILLING CODE 4310-02-P

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