North of 60 Mining News - The mining newspaper for Alaska and Canada's North

In an earlier column (Dec. 24, 2017), the question of proposed regulations affecting mining on State land was flagged for readers’ attention because the initial scope of the contemplated changes did not bode well for the industry. Unfortunately, space constraints precluded in-depth analysis of the half-dozen ideas that had been laid on the table.

Since that column, however, the problems identified in the suggested regulations have evolved into broad disarray, due in part to the introduction of ostensibly curative legislation by the Governor. Initially, it must be acknowledged that the Administration has its heart in the right place; but, at this point, the remedy is worse than the disease.

In essence, the elephant in the room relates to the when, if ever, a mining claim must be deemed abandoned if it fails to recite specific magic words. The current position of the department seems to be that the moment a miner records an affidavit of annual labor which contains the tiniest error in the essential facts the claim is immediately and irretrievably abandoned “by operation of law.”

Based on that interpretation, no regulatory fix is available.

The statutory language that precipitates this Draconian result is found in AS 38.05.265 which says that “Failure to properly record a … statement of annual labor … constitutes abandonment or all rights acquired under the mining claim. … A statement of annual labor that does not accurately set out the essential facts is void and of no effect.”

Assuming, as the State seems to do, that an incorrect affidavit of annual labor cannot be properly recorded, no miner on State land can ever be safe. Effectively, if there ever was an error on any affidavit, the associated claims – and all the work done thereon, and all the value recovered – has been under a dark cloud of trespass.

The State, in its infinite wisdom, has flung itself, and with it the State’s second largest industry, over the brink of the slippery slope, hell-bent for calamity.

Due to the Administration’s myopic interpretation of the law, the Legislature has been dragged into a legally technical, horrendously complex, sinkhole that puts at risk the vocation of thousands of hardworking constituents. By extension, that will place a significant burden on an overtaxed bureaucracy.

No matter what the statutory fix may prove to be, certain parameters must be accommodated. First, the industry must not be thrown into a state of disarray. This probably means an emergency statutory fix that says something to the effect that, “Effective immediately and notwithstanding anything to the contrary contained in AS 38.05.265, no mining claim that is the subject of an affidavit of annual labor that fails to set forth the essential facts prescribed by the Alaska Department of Natural Resources shall be deemed abandoned until the affiant has a reasonable opportunity to file a corrected affidavit resolving the defect or omission.”

With that statutory bandage in place, the state will have a window within which to cure this immediate crisis.

Notably, this is not the first major legal crisis Alaska’s mining industry has been confronted with. Those who are long enough in the tooth will recall the controversy at the time of Statehood wherein Alaskans wanted a system similar to the federal mining law whereby the locator of a mining claim on state land could acquire title to the minerals contained therein. Alaska miners lost that battle and the state was statutorily debarred from alienating its title to unmined minerals.

Legendary Alaskans Phil Holdsworth and Chuck Herbert did what they could to make the Alaskan system mirror the federal system while following the law. Nonetheless, their efforts were ultimately rewarded by a decision of the Alaska Supreme Court that despite the language of the State Constitution, Section 6(i) of the Statehood Act meant that State of Alaska mining claims were really leases for which claimholders had to pay annual rent.

In 1997, known problems with the Alaska Land Act resulted in an in-depth re-examination of the utility of locating mining claims on the ground versus “paper staking” claims. The conclusion was that paper staking was a bad idea, and although some changes in the law were desirable, actual monumentation should be preserved.

Currently, the problem presented by AS 38.05.265 gives rise to the question of whether annual labor and the associated affidavits ought to be done away with. Virtually no one with whom I have spoken favors doing away with affidavits of annual labor, because irrespective of the problem of deemed abandonment, elimination of the obligation to perform labor on State mining claims invites a bevy of complications, such as the willingness of locators to sit on large tracts of prospective State land for extended periods of time simply by forwarding a rent check to the State once a year.

Generally, the elimination of the requirement to perform annual and to file an affidavit attesting to the performance of annual labor is thought to frustrate resource development rather than facilitate it.

No matter how the State comes down with its regulations or statutory amendments, the time for miners to take notice is at hand. The Alaska Miners Association State Oversight Committee is hard at work on this problem. Holders of State mining claims should consider weighing in before it is too late.