Changes to Alaska’s Mining Laws – Annual Labor

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When Alaska amended its mineral tenure statutes, it significantly changed the statement of labor that must be filed annually to maintain state mining claims. We previously provided an overview of the changes and now explain them in more detail. Neither the amount of labor required nor the deadline for filing the annual statement has changed. Rather, the amendments clarify what counts as labor and what must be reported on the annual statement.

The law now clearly recognizes that labor that occurs on adjacent federal or private mineral interests held in common with state claims can be credited toward the claims so long as the claims benefit from the labor. While most miners believed the prior statutory language—providing that all work benefiting the state claims counted toward the labor requirement—allowed work on non-state lands to satisfy the labor requirement, the new language removes any room to question this long-standing practice.

The information that must be included in the annual statement of labor—commonly referred to as an affidavit of labor, or AOL—is now set forth in the statute, rather than the regulations. There are a few significant changes from the prior requirements.

First, the AOL must include both the claim name and the state’s serial, or ADL, number. Although industry typically refers to claims by name, the state Department of Natural Resources (“DNR”) tracks everything by ADL number. Requiring the miner to include both facilitates communication and coordination with DNR.

Second, the AOL must include the amount of labor required for the claims that it covers. This is an entirely new requirement to facilitate the calculation of carryforward work. Because different size claims require different amounts of work, and the size of each claim is not typically included in the AOL, it has been a labor-intensive process to determine how much of the work reported would carry over to future years. That is now a simple matter of subtraction.

Finally, the AOL requires the name and mailing address of an owner designated to receive notices regarding the mining claim. Previously, the law required the name and address of all owners. The term “owner” was not defined so it was not clear whether both lessors and lessees needed to be listed, whether to include an optionee, and whether the owner of a royalty was to be included. And the failure to identify all owners could arguably invalidate the AOL under the prior law. Today, identifying a single owner with mailing address is sufficient.

Mineral tenure is protected from past errors through two new provisions. The statute now provides that the validity of a state mining claim cannot be challenged based on defects in an AOL that is more than five years old. If a defective AOL is not challenged within five years, it is essentially cured by the passage of time. In addition, a miner may correct or amend an AOL at any time and DNR cannot declare a mining claim invalid based on a defective AOL until after notice and a 90-day cure period. Finally, the previous provision that an AOL that failed to accurately set forth the essential facts is void and of no effect has now been deleted.

The final change to the labor requirement that we note here is that the law now includes a list of the types of work that qualify as labor. The list expressly recognizes that reclamation work under an approved plan counts as labor. Also, in-state transportation of workers and equipment to or from a mining site can be counted up to 50% of the total labor value reported for the year.

The statutory amendments took effect on April 30, 2020, when Governor Dunleavy signed SB 155, so all of the above requirements apply to the AOLs that must be filed by November 30, 2020.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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