Nonmetallic minerals leasing

The DNR’s authorization to enter into contracts for the taking of nonmetallic minerals from state-owned lands comes from section 324.502(3) of the Natural Resources and Environmental Protection Act, 1994 PA 451, as amended (NREPA).

The DNR has three nonmetallic minerals lease forms, depending on the product being produced:

• PR4315 (Salt, includes Rock Salt, Sodium Chloride and Potash)
• PR4332 (Construction Sand, Gravel, Cobbles, Boulders and Clay)
• PR4331 (Generic form for products not covered under the other two lease forms, such as limestone, gypsum, peat)

Any qualified party can apply to lease state-owned mineral rights by nominating a specific property(ies).  A nomination does not mean the mineral rights will be offered for lease.  Staff thoroughly review the application and determine if the rights will be offered for potential lease and whether the rights will be offered via a direct (non-competitive) lease, an auction, or not at all if the requested rights are unleasable.

Yes, leasing of state-owned nonmetallic mineral rights for exploration and development generates revenue.  Types of revenue generated include, but are not limited to, bonus payments, rental payments, minimum annual royalties, production royalties, shut-in payments, and interest due.

Solution mining, to produce commodities such as salt and potash, is regulated by the Department of Environment, Great Lakes, and Energy (EGLE).  For more information please visit the Mineral Wells page on the EGLE website.  Other nonmetallic mineral commodities mined in Michigan, such as gypsum, dimension stone, limestone, and aggregates (sand & gravel), do not require a mining permit from EGLE, but may be subject to other federal, state, or local regulations and air, water, or land use permits.  A DNR approved Mining and Reclamation Plan is required if the surface is not owned by the lessee.

In the DNR’s leasing process, there are several means of identifying and addressing potential environmental concerns associated with nonmetallic mineral development.  For example:

• Parcels nominated for leasing go through a classification review by resource specialists to determine the appropriate level of surface use that could be allowed (see related information regarding lease classifications and stipulations for further information).
• The lease is subject to all applicable existing or subsequent federal and state laws and rules.
• The lease within itself is not an authorization to mine.  Separate application(s) and approval(s) by federal, state, and local authorities are required prior to mining activity.

Severed minerals occur when the mineral estate, which may include nonmetallic mineral rights, is severed from the surface estate.  In this case, one party may own the right to farm the land, build a house, or graze cattle, while another party may own the right to explore for and produce the nonmetallic minerals from beneath the land at the same property, if such minerals exist.

That depends.  The amendment to Michigan law, Public Act 125 of 1964 (specifically MCL 322.212, now MCL 324.503), clarified that in deeds executed after May 16, 1964, for the sale of state-owned land, general reservations of “all minerals” or “mineral rights” does not encompass rights to sand, gravel, clay, or other nonmetallic minerals.  Only when reservations specifically identify those minerals would they be included as rights reserved to the state.  Prior to this amendment, a broad reservation of "mineral rights" was interpreted by some courts to include sand, gravel, clay, and other non-metallic minerals.  The specific language used in a deed reservation is crucial in determining the scope of the reserved mineral rights.

To determine who owns the mineral rights under your property, a title search would need to be performed.  An individual can search the records at the Register of Deeds office in the county where the property is located, or an individual can hire someone to do the title search for them. A landowner can determine whether the DNR owns the mineral rights by contacting Minerals Management Section at 517‑284-5850.

The DNR oversees a program which allows for the reunification of surface and mineral rights in some circumstances.  For more information, contact the Minerals Management Section at 517‑284‑5850.

Not necessarily.  State ownership of the nonmetallic mineral rights signifies that the state owns any nonmetallic minerals that may exist, along with the right to explore, mine, and produce them.  It does not mean that any valuable nonmetallic minerals are present.

Nominated parcels are classified for leasing after a review by biologists, foresters, the state archeologist, and other professionals to determine the appropriate level of surface use for the parcel based on its resource features.  There are four categories of lease classification:

1. Leasable Development (LD) – The LD category allows for nonmetallic mineral rights to be leased and allows surface use after all necessary permissions have been granted. The Lessee must follow all standard lease provisions and obtain all necessary permissions before commencing surface activities.
2. Leasable Development with Restriction (LDR) – The LDR category allows for a parcel’s nonmetallic mineral rights to be leased and allows surface use after all necessary permissions have been obtained. In addition to standard lease provisions, LDR leases contain other specific restrictions (stipulations).  Examples of such restrictions include development time restrictions within Kirtland’s Warbler habitat management area.
3. Leasable Nondevelopment (LND) – The LND category allows for a parcel’s nonmetallic mineral rights to be leased, but it does not allow the parcel’s surface to be used for metallic or nonmetallic mineral development without separate written permission from the Department of Natural Resources.
4. Nonleasable (NL) – The NL category prohibits the leasing of the parcel’s nonmetallic mineral rights. It is used when there are no means to adequately protect surface resources or when deed restrictions prohibit leasing.

Lease classifications do not convey a right to explore, mine, or produce to a Lessee.  It is only the first of many steps required in the nonmetallic minerals production process.  A lease, regardless of its associated classification, merely grants a Lessee the exclusive right to pursue development of the leased nonmetallic mineral rights if they choose to do so, provided that all necessary permissions are obtained.

Stipulations are additional restrictions or requirements that are added to a lease.  They are determined by the DNR based on a pre-lease classification review of nominated tracts.  For example, the DNR may add a stipulation to the nonmetallic lease to restrict development to certain times of the year.  Other stipulations might address the placement of equipment or roads on a parcel, or address wildlife and other natural resource issues.

Administrative rules are adopted by the various state agencies to guide them and the public in the conduct of their agency responsibilities.  The DNR has developed and implemented rules to guide the process of nonmetallic minerals leasing on state lands.  See “Rules for Leasing State-Owned Nonmetallic Mineral Rights” on the DNR Nonmetallic Minerals web page.

The DNR uses a variety of methods to notify the public regarding the leasing of state-owned mineral rights:

• The DNR website contains a variety of information regarding the leasing of state-owned mineral rights – including nomination information, maps, mineral leasing procedures, and forms.
• A public notice regarding proposed leasing is posted in newspapers serving areas of proposed lease activity that meets criteria as defined in section 1461 of the revised judicature act of 1961, 1961 PA 236, MCL 600.1461.  Public notices are distributed to local newspapers in time to give the public 30 days to review and comment on tracts nominated for leasing before any decision is made regarding the application to lease the mineral rights.
• The DNR sends information regarding proposed mineral leasing to the county commissioners and township supervisors, house representatives, and state senators where nominated parcels are located.
• Information including maps and parcel classifications are posted on the DNR Nonmetallic Minerals web page.
• The DNR sends information regarding all mineral leasing activities to interested parties who have signed up to receive email notifications on the GovDelivery mail server system.

Yes.  Public comment is an important component of nonmetallic mineral leasing.  Written questions or comments may be sent to:

Michigan DNR
Minerals Management Section
P.O. Box 30452
Lansing, MI 48909

OR

DNR‑LeaseManagement@michigan.gov