Mineral Leasing

 

 



Mineral Leasing


The Minerals Leasing Program of the State of Idaho is administered by the State Board of Land Commissioners
(Land Board) through the Idaho Department of Lands (IDL). Complete information is available from IDL's Bureau of Surface and Mineral Resources or any of the IDL Supervisory Area offices.

The Land Board has statutory authority to administer the leasing of minerals on approximately three million acres of land, as well as the beds of navigable waters which were granted to the State in trust at statehood in 1890.This mineral ownership does not include lands held by the Idaho Departments of Fish and Game, Parks and Recreation, Transportation or other state agencies. If other state agencies allow their lands to be leased for minerals, IDL will issue and administer the leases.

PURPOSE

The State leases minerals to generate revenue for the owning endowment fund, such as Public Schools, or for the general fund when public trust lands are involved. Leases are issued for metals and other mineral commodities, oil and gas and geothermal resources on both land and navigable waters.

Any individual, company or governmental agency that desires to mine minerals owned by the State must obtain a mineral lease from IDL.

Application forms are available from IDL. IDL also maintains a central land records system at the Director’s office in Boise with up-to-date information on lands that are open for mineral leasing.

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CONDITIONS

TERMS: All mineral leases are issued for a maximum term of ten years with the right of renewal if the lease is being developed or in production.

SIZE: The maximum lease size is 640 acres or one section.

RENTAL: Rental is paid annually with the rental amount based on the acreage under lease.

ROYALTY: Royalty is paid on all minerals mined and removed from the lease. Royalty rates vary by commodity. Rental can be used as a credit against production royalty during a given lease year except on oil and gas and geothermal leases.

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LEASABLE COMMODITIES

OIL AND GAS: Oil and gas leases are offered periodically through competitive bidding at oral auction. Available lands are described in a tract list by legal subdivision with each tract having a designated tract number. Tracts receiving no bids at auction are available over-the-counter for a six-month period following the auction.

The minimum opening bonus bid is $0.25 per acre with bidding increments of $0.25 per acre. The total bonus bid is the sum of the amount bid per acre times the acres in the tract. Successful bidders must pay the bonus bid as well as the first year's annual rental of $1.00 per acre.

Annual rental for the remaining term of the lease is one dollar per acre per year. Starting with the sixth, year a drilling penalty of one dollar per acre or unit per year is assessed if the lease is not producing or being drilled. The drilling penalty is in addition to the annual rental.

There is a 12.5% royalty on any oil and gas produced and saved from the lease.

A $1,000 bond is required for exploration on each lease. The bond must be increased to $6,000 prior to drilling. An additional bond is required under the drilling permit, which is issued by the Idaho Oil and Gas Conservation Commission.

The Idaho Oil and Gas Conservation Commission, which regulates oil and gas well drilling on state, federal and private land, is based in the IDL Director's office at 954 West Jefferson in Boise.

Seismic exploration on state land requires a permit from IDL prior to entry. The permit fee is $100 per mile if the land crosses contiguous tracts of state land; otherwise the permit fee is $100 per section.

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GEOTHERMAL: Geothermal leases are available through over-the-counter filing of applications on a first come, first served basis. If two or more applications are received at the same time on the same day, it is considered a simultaneous filing which will be resolved by competitive auction.

Annual rental is one dollar per acre per year for the first through the fifth year, two dollars per acre per year for the sixth through the tenth year and three dollars per acre per year thereafter if the lease is extended.

There is a 10% royalty assessed on the amount or value of the geothermal resource or on any form of heat or energy derived from the production of geothermal resources.

A $2,000 bond is required to hold each lease. This bond must be increased to $10,000 prior to drilling a geothermal well 1000 feet or deeper. Additional bonding is required under a drilling permit issued by the Idaho Department of Water Resources.

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Triumph Mine PortalOTHER MINERALS: This category includes metals, gemstones, phosphate, coal, uranium and other fissionable minerals, sand, gravel, rock and clay, among others.

Mineral leases for these commodities are available through over-the-counter filing on a first-come first-served basis. Applications filed by two or more individuals or companies for the same commodity on the same tract of land are considered simultaneous filings and are resolved by competitive auction.

The annual rental for mineral leases is one dollar per acre per year with a minimum of $160. Phosphate leases are assessed a $3.00 per acre minimum royalty. Some mineral leases have prepaid royalty requirements that vary with the commodity leased. Minimum or prepaid royalties are paid with the annual rental in advance.

A $5,000 bond is required to hold a mineral lease, except for phosphate leases, which require a $2,000 bond.  Bonds on lands where the state owns the mineral rights but not the surface rights are set at $2,000 if the surface owner is the lessee, otherwise they are $5,000. Additional bonding is required on producing leases in accordance with either the Idaho Surface Mining Act or the Idaho Dredge and Placer Mining Protection Act.

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BEDS OF NAVIGABLE RIVERS: The Land Board has statutory authority to lease the beds of navigable waters for various minerals. Applications for riverbed leases are reviewed on a case by case basis.

Each application is advertised in a newspaper legal notice in the county or counties where the riverbed under application is located. The Land Board may order a public hearing to receive oral and written testimony if requested by 10 individuals whose lawful right to use the water applied for may be injured.

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EXPLORATION LOCATIONS: Most state endowment lands and navigable waterways are open to exploration locations.  Each location is limited to 20 acres in size and has a two-year term upon payment of a $100 fee for land locations and a $250 fee for riverbed locations.

One hundred dollars worth of work must be done on each location annually. Exploration is the only mining activity that is allowed. The locator must take out a lease after the two-year term has expired if he wishes to continue working the site.

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SPLIT ESTATE LAND

What is a split estate?

A split estate occurs when the mineral estate is severed or separated from the surface estate upon sale or transfer of the surface estate.  The federal government retained mineral ownership on some lands that were transferred under Homestead Acts, including the 1916 Stock Raising Homestead Act.  Idaho Law enacted in 1923 requires the State of Idaho to retain the mineral estate on lands they sold subsequent to May 8, 1923.  Private land owners sometimes retain minerals when they sell the surface of land.

Both the surface and mineral estate owners on split estate lands have property rights.  Since minerals have no value unless they can be accessed and mined the mineral estate owner has the right to enter onto the surface estate to access the minerals.  Provisions are included in both federal and state law to protect and or compensate the surface owner for damaged to the surface.

 How do you find out if the surface estate is severed from the mineral estate?

Deeds issued by the State of Idaho and patents issued by the federal government should show if the mineral estate was separated and reserved to the grantor when the surface estate was sold.  Land Sale Certificates and deeds issued by the State of Idaho contain mineral reservation language that has varied over time.  In some cases both the federal government and the State of Idaho have reserved minerals on the same parcel.  Copies of deeds or patents can be obtained from the issuing agency or are sometimes available at the recorder’s office in the county courthouse in the county where the lands are located.

What is included in the reserved mineral estate?

The reserved mineral estate can include all minerals of what so ever kind or character including geothermal resources, rocks and sand and gravel or it could only include specific minerals such as precious metals, oil and gas and/or coal.  What is reserved depends on the reservation language in the deed or patent and is often open to interpretation. 

What rights does the mineral estate owner have? 

When the mineral estate is reserved to the State of Idaho the state and persons authorized by it have the right to prospect and mine minerals and occupy so as much of the surface of the land as is reasonably necessary.  Federal law might require the mineral estate owner or persons authorized by the federal government to mine to notify the surface estate owner in advance of entry on to the land.

What rights does the surface estate owner have?

When the mineral estate is reserved to the State of Idaho state law specifies the mineral estate owner has the right to enter upon the surface estate provided he does not injure, damage or destroy the improvements of the surface owner.  The mineral estate owner shall be liable to and shall compensate the surface owner for all damages to the surface of the land and the improvements in accordance with Idaho Code 47-708.  Federal law has similar provisions to protect improvements of the surface owner.

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Publications and Maps

A list of historical and geological publications and maps is available from:

Idaho Geological Survey
Morrill Hall Third Floor
University of Idaho
Moscow, Idaho 83843
Phone (208) 885-7991
Fax (208) 885-5826

Additional Information

Address Questions to:

Sharon Murray
Minerals Program Manager
Idaho Department of Lands
300 North 6th Street Suite 103 - PO Box 83720
Boise, ID 83720-0050
Phone (208) 334-0231

or contact Idaho Department of Lands Supervisory Areas

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