Alternatives For Handling Nonconsent in Joint Mining Operations
Events of the past decade have confirmed forecasts of a pronounced increase in multiparty mining operations;1 and most of us have necessarily become familiar with many variations of agreements governing joint mining operations. Along with this trend, an excellent “standard” form of operating agreement has evolved;2 however, significant differences between mining methods and the variety of structures available for joint operations have prevented mining attorneys from taking advantage of standardization to the same extent as our oil and gas counterparts.3 As predicted by the Committee Report presented to the Seventeenth Annual Rocky Mountain Mineral Law Institute,4 the Model Form Operating Agreement often serves as a starting point, saving countless hours in negotiating and drafting, but is inevitably altered in substantial respects as negotiations progress toward a final draft.
This paper will focus on the subject of nonconsent,5 which as the Committee Report indicated, is the one aspect of agreements for joint mining operations least adaptable to standardization.6 Recognizing that the alternative methods for handling nonconsent “almost defy enumeration,”7 the Committee did not attempt to draft standard language for each possible variation. Rather, the Model Form reflects one method commonly employed in the industry.8 Although many draftsmen borrow freely from the conce
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