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Land Exchanges With the Bureau of Land Management and the Forest Service

Chuck Rech, Steven P. Quarles, Land and Permitting (1994)

Mineral-related exchanges can be undertaken for a variety of reasons. The largest mineral exchanges have achieved consolidation of mining units under the proponents' control. This was the goal of the major coal exchanges with which the authors have been involved. Both the Circle West and the Bull Mountains exchanges in Montana were initiated to consolidate logical mining units.1

Consolidation through exchange has two major benefits. First, it allows the exchange proponent to acquire the federal minerals at the time of its choosing and avoid the diligence requirements that often accompany mineral leases. In the case of coal, the Federal Coal Leasing Amendments Act of 1976 established a ten-year period for bringing the reserves in the lease or the logical mining unit of which the lease is part into production.2 While this may not be a problem for an operating mine or a proposed mine that clearly will have a market as soon as it can be permitted and opened, it can be a concern where the future timing for development is less certain. In the case of saleable minerals the timing problem is even more severe. Under the Material Act of 1947 and its implementing regulations, the sales contracts for an aggregates operation may not exceed five [14-2] years for noncompetitive sales and ten years for competitive sales.3 These deadlines, together with unrealistic sales volume restri