States may enter lands that are chiefly valuable for building stone under the provisions of the law in relation to placer mineral claims. *** [Italics added] 30 U.S.C. § 161. The Act of 1872 contains no language that admits of limitation on the location of claims, save that they must be for valuable mineral deposits. The Act of 1892, relating to building stone, however, requires as an additional prerequisite for a valid claim for building stone that the lands embraced within such claims must be chiefly valuable for the located mineral. Therein, Congress has expressly mandated a comparison of values approach. But it is equally clear that Congress has chosen not to amend the Act of 1872 to the effect that all claims must embrace lands chiefly valuable for located minerals. We do not believe that anything in NEPA would hint that Congress intended so drastic a revision. Nor have the amici curiae pointed to anything in the legislative history of the Act that would justify such a reading of the statutory language. Accordingly, we hold that under the Act of May 10, 1872, supra, if the discovery of a valuable mineral deposit be shown, a valid claim exists, regardless of a more beneficial use to which the land might be put. See United States v. Iron Silver Mining Co., 128 U.S. 673, 684 (1888). While the existence of other values does not qualify the locator's rights under the mining law if he has a valid claim, it may be a factor in determining whether a valid claim exists. It may be considered in assessing the weight and credibility to be accorded the locator's testimony in determining whether a discovery has been made. Helen V. Wells, 54 I.D. 306, 309 (1933); E. M. Palmer, 38 L.D. 294 (1909). And it may be an issue in evaluating his bona fide intention to develop a mining operation. As the Court stated in United States v. Coleman, 390 U.S. 599, 602 (1968): Under the mining laws Congress has made public lands available to people for the purpose of mining valuable mineral deposits and not for other purposes. We note that the East Bay Regional Park District has applied for the land under the Recreation and Public Purposes Act, 43 U.S.C. §§ 869 et seq. (1970), and that Contra Costa County, within which the land is situated, supports this action. We believe they have the requisite interest to participate in further proceedings, and they will be recognized as parties in the hearing below. The other amici curiae. have only a general concern for the environment of the area and the application of the mining law. Accordingly, they will not be granted status in the hearing as parties but may remain as amici for the limited purpose of filing briefs to the Judge or this Board. Contestant requests that the Board reverse its decision of September 3, 1971. In support of its request contestant asserts that the decision of the Board is unclear as to exactly what standard was applied in connection with the marketability test. The test to be applied (ON RECONSIDERATION) in determining whether the locator [W]here minerals have been found and the evidence is of such a character that a person of ordinary prudence would be justified in the further expenditure of his labor and means, with a reasonable prospect of success, in developing a valuable mine, the requirements of the statute have been met. This test has met the approval of the Supreme Court on several occasions. Best v. Humboldt Placer Mining Co., 371 U.S. 334 (1963); Cameron v. United States, 252 U.S. 450 (1920); Chrisman v. Miller, 197 U.S. 313, 322 (1905). In United States v. Coleman, 390 U.S. 599 (1968), the Supreme Court again approved the prudent man test and specifically recognized the marketability test as a logical complement to and refinement of the prudent man rule. In Coleman, the court stated: Minerals which no prudent man will extract because there is no demand for them at a price higher than the cost of extraction and transportation are hardly economically valuable. Thus, profitability is an important consideration in applying the prudent-man test, and the marketability test which the Secretary has used here merely recognizes this fact. 390 U.S. at 602, 603. In our view, this Board applied the proper legal standard in our original decision. While we recognize that a mining claimant's bur den of proof may be more difficult to Contestant next argues that the evidence adduced at the original hearing does not support a finding of discovery on each claim. Upon re-examination of the record, we conclude that the evidence is insufficient to make a final determination as to the validity of the claims. Therefore, all parties are afforded a further opportunity to produce evidence on those issues which were insufficiently covered at the first hearing. Upon rehearing, in order to establish a discovery on each claim in issue, evidence should be further developed on the following points: 1. Significant variations in value occurred between the samples taken by contestant and contestee. Therefore, further sampling is necessary to demonstrate clearly the quality and quantity of silica sand on each claim. In the analysis of the samples care should be taken to avoid combining samples from different claims. As this Board stated in United States v. Bunkowski, 5 IBLA 102, 79 I.D. 43, 51–52 (1972): [T]here must be a discovery on each claim. The appellants must show as to each claim that they have found a mineral deposit which satisfies the prudent man rule as complemented by the marketability test. (Italics in original) In order to avoid further problems in connection with sampling, we recommend that joint sampling be conducted on each claim. 2. The quantity of sand on the claims should be considered in con nection with the existing and foreseeable market; i.e., evidence should be presented on the presence of sufficient reserves within the limits of each claim. The record contains no such evidence. Should the validity such evidence. Should the validity of one or more of the claims be established, the issue of possible excess reserves must be considered. See United States v. Anderson, supra. 3. Different grades of silica sand produce different types of glass. Thus, the critical issue in establishing marketability is the nature and extent of the market for each grade of glass sand and the approximate amount of each grade on each claim. 4. The milling and flotation process described by contestee in the original hearing needs further clarification in order to determine whether the costs of beneficiation permit the silica sand to be marketed at a profit. In developing this evidence, to the extent it is reasonably possible, similar costs of other producers should also be presented. Contestant contended, and the Judge so held, that absent an actual pilot testing of the proposed process, it cannot be determined whether the process can be worked at a profit. We reject such a position. Certainly, the existence of a successful pilot plant would greatly increase contestee's ability to demonstrate the costs of producing its silica sand and the feasibility of its process. When the contestee's case rests on a proposed flotation process which has yet to be tested, expert corroborative evidence would be helpful and might be essential in determining the potentiality of success. The Government, of course, may rebut such evidence. 5. Evidence relating to the costs of transportation should be further developed on rehearing. The subject claims are closer to the existing markets than the deposits of present suppliers. It does not necessarily follow, however, that contestee's costs of transportation will be lower. While distance is an important factor in determining transportation costs, it is not necessarily the only factor. Transportation costs may vary depending upon whether sand is shipped by road, rail, or water. Costs may also vary depending upon the difficulty presented by the geographic conditions of the route, as well as other factors. (ON RECONSIDERATION) Contestee argues that silica sand is shipped "f.o.b. plant at $4.25 per ton" and that transportation costs under these terms are incurred by the glass producers rather than the sand suppliers. We recognize that where a glass producer quotes a price for sand and incurs the transportation costs, the producer, in all likelihood, reflects this cost in the price per ton he is willing to pay a particular supplier for silica sand. However, we cannot determine from the present record whether glass producers would quote the same terms to contestee as they apparently have quoted to existing sand suppliers. It may be that, because of geographic conditions or the mode of transportation, glass producers will offer better terms to contestee than they apparently have made to existing suppliers. On the other hand, because of geographic conditions or the mode of transportation, glass producers may not want to incur the expense of transportation, and therefore may offer contestee a price for its sand which does not reflect transportation as a cost. In the latter instance contestee would have to produce evidence to establish its cost of transporting sand from its claims to the glass producers. Whatever the situation might be, evidence should be developed on transportation costs so that an informed determination can be made with regard to this issue in applying the marketability test. 6. Since water is relatively scarce in the area of the claims, its availability, the contestee's right to use it and the cost related to such use are all items which must be considered on remand. 7. As discussed above, evidence, if any, as to additional costs necessary to meet pollution control standards, under such applicable federal, state, and local laws as may apply, is relevant to determine whether production may be reasonably foreseen as returning a profit to contestees. 8. In applying the legal standards to the facts of the case, all factors must be considered as of the time of the hearing and as of the time the land in issue was officially classified for disposition under the Recreation and Public Purposes Act, 43 U.S.C. §§ 869 et seq. (1970). 9. In addition to determining whether a discovery has been made and still exists on each of the claims, the date on which each discovery was made must be considered. The date is important for two reasons. First, the claims were located by Steve Kosanke and others in 1963 and 1964 as association placer claims of 40 acres each. Three of the claims remaining at issue, Earache No. III, Earache No. V and Pete, still contain 40 acres. Although the exact date of transfer does not appear in the record, Kosanke's patent application, filed July 30, 1964, states that the claim had been conveyed to Kosanke Sand and Gravel Company. Unless a discovery is made prior to the transfer of an association placer claim to a single claimant, the transferee is only entitled to perfect each claim as to 20 acres. United States v. Harenberg, 9 IBLA 77, 86 (1973); United States v. Lease, 6 IBLA 11, 27; 78 I.D. 379, 386, n.5 (1972). Therefore, unless there was a discovery on each of these three claims prior to the date of the transfer to contestee, each claim can be valid for 20 acres at most. The date of discovery is also crucial for another reason. On September 30, 1970, the California State Director, BLM, classified the lands covered by these mining claims for lease or sale for recreational use under the Recreation and Public Purposes Act, 43 U.S.C. §§ 869 et seq. (1970). The classification withdrew the land it covered from disposition under the public land laws, including the mining laws, but did not adversely affect valid existing rights. Buch v. Morton, 449 F.2d 600 (9th Cir. 1971). Therefore, all the requirements essential to a valid mining location must have been completed by that date at the latest. The classification was made pursuant to an application filed on October 24, 1964, by the East Bay Regional Park District. East Bay Regional Park contends that equity and the doctrine of de facto withdrawal require a relation back of the classification decision to the date of its application. While the Department has held that in some circumstances the classification or other disposition of public land re lates back to the date of filing of the application leading to such action, Frank Melluzzo, 72 I.D. 21 (1965); Harry E. Nichols, 68 I.D. 39 (1960), it has not ruled upon whether an application under the Recreation and Public Purposes Act falls within this principle. See R. C. Buch, 75 I.D. 140, 144 (1968), aff'd, Buch v. Morton, supra.1 Since the issue may not arise in this case, depending on resolution of other factual questions, we do not decide it now. However, to resolve all possibly pertinent matters, we request the Judge to consider in his findings whether a discovery existed as of October 24, 1964. At the hearing, the parties may develop such other evidence as is pertinent. This case has engendered considerable public and legislative comment within the San Francisco and Sacramento areas. Nevertheless, we are confident that each Administrative Law Judge situated in Sacramento would conduct the hearing with judicial detachment and fairness. We are concerned, however, not only with the substance of justice, but also with its appearance. Consequently, to remove any basis for doubt as to the impartiality of further proceedings, we direct that a Judge be assigned from the Salt Lake City Office, Hearings Division, Office of Hearings and Appeals, to hear this case. 16 For a discussion of the resolution of a cenflict between an oil and gas lessee and a mineral locator, see Union Oil Company of Cali fornia, 65 I.D. 245 (1958), aff'd, Union Oil Company of California v. Udall, 289 F.2d 790 (D.C. 1961). |