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Antitrust Considerations in Mineral Exploration and Exploitation Ventures

Philip W. Coyle, Mining Agreements (1979)

Restraint of trade and prevention of improper monopoly practices are the concerns of the United States antitrust laws. Congress considered that the preservation of competition and the prevention of monopolies was a national concern and it reflected this concern in the enactment of the various antitrust laws.1

Monopoly has been defined as:

...when one firm controls all or the bulk of a product's output, and no other firm can enter the market, or expand output, at comparable costs. In such circumstances, the firm has the power to raise prices above competitive levels by restricting its output, because the output reduction cannot be offset by expanding output of others.2

In the mining business, monopoly may occur when two competitors merge to form a single unit, or there may result from such merger a significant lessening of competition. In the exploration side of the mining business, merger or consolidation to form a single ongoing joint corporation seldom occurs. Rather, the usual procedure is for two or more persons to join together in an exploration venture which has as its principal objective the finding of an ore body. Thus, in the exploration aspects of the mining business, the principal focus of the antitrust laws is on the preservation of competition. Because of the almost unbearable risk associated with the task of finding an ore body, mining c