ABSTRACT

This chapter examines the impact of land status on mineral development particularly on federal land. Economists often explain the development of specific mineral deposits with economic theories that rely on assumptions about a free market economy. Classic location theory is based on economic principles such as "least cost, maximum profit, rent-paying ability, level of competition, economic or rational man, and economies of scale." Rational mineral-development decisions are difficult without a complete understanding of the federal land system. The laws controlling the development of mineral resources have developed into a complex mix, making them difficult to understand. Some early policies controlling mineral development existed, these laws were inapplicable to most of the western United States when the California gold rush began. In a lease system, mineral ownership is retained until minerals are extracted, with rentals and royalties compensating for the lost mineral values. Private mineral acquisition is controlled by each state's contract and property laws.