30 U.S.C. § 207 : US Code - Section 207: Conditions of lease

Search 30 U.S.C. § 207 : US Code - Section 207: Conditions of lease

(a) Term of lease; annual rentals; royalties; readjustment of
conditions
A coal lease shall be for a term of twenty years and for so long
thereafter as coal is produced annually in commercial quantities
from that lease. Any lease which is not producing in commercial
quantities at the end of ten years shall be terminated. The
Secretary shall by regulation prescribe annual rentals on leases. A
lease shall require payment of a royalty in such amount as the
Secretary shall determine of not less than 12 1/2 per centum of
the value of coal as defined by regulation, except the Secretary
may determine a lesser amount in the case of coal recovered by
underground mining operations. The lease shall include such other
terms and conditions as the Secretary shall determine. Such rentals
and royalties and other terms and conditions of the lease will be
subject to readjustment at the end of its primary term of twenty
years and at the end of each ten-year period thereafter if the
lease is extended.
(b) Diligent development and continued operation; suspension of
condition on payment of advance royalties
(1) Each lease shall be subject to the conditions of diligent
development and continued operation of the mine or mines, except
where operations under the lease are interrupted by strikes, the
elements, or casualties not attributable to the lessee.
(2) The Secretary of the Interior, upon determining that the
public interest will be served thereby, may suspend the condition
of continued operation upon the payment of advance royalties.
(3) Advance royalties described in paragraph (2) shall be no less
than the production royalty which would otherwise be paid and shall
be computed on a fixed reserve to production ratio (determined by
the Secretary).
(4) Advance royalties described in paragraph (2) shall be
computed -
(A) based on -
(i) the average price in the spot market for sales of
comparable coal from the same region during the last month of
each applicable continued operation year; or
(ii) in the absence of a spot market for comparable coal from
the same region, by using a comparable method established by
the Secretary of the Interior to capture the commercial value
of coal; and
(B) based on commercial quantities, as defined by regulation by
the Secretary of the Interior.
(5) The aggregate number of years during the period of any lease
for which advance royalties may be accepted in lieu of the
condition of continued operation shall not exceed 20 years.
(6) (!1) The amount of any production royalty paid for any year
shall be reduced (but not below 0) by the amount of any advance
royalties paid under a lease described in paragraph (5) to the
extent that the advance royalties have not been used to reduce
production royalties for a prior year.
(6) (!1) The Secretary may, upon six months' notification to the
lessee cease to accept advance royalties in lieu of the requirement
of continued operation.
(7) Nothing in this subsection shall be construed to affect the
requirement contained in the second sentence of subsection (a) of
this section relating to commencement of production at the end of
ten years.
(c) Operation and reclamation plan
Prior to taking any action on a leasehold which might cause a
significant disturbance of the environment, the lessee shall submit
for the Secretary's approval an operation and reclamation plan. The
Secretary shall approve or disapprove the plan or require that it
be modified. Where the land involved is under the surface
jurisdiction of another Federal agency, that other agency must
consent to the terms of such approval.