§207 — Title 30 Mineral Lands and Mining | U.S. Code

Summary

Leases must last for 20 years and keep going as long as coal is being produced in commercial amounts each year. If no commercial production happens by the end of 10 years, the lease ends. The Secretary sets yearly rent and a royalty on the coal’s value. The royalty must be at least 12½ percent, except from July 4, 2025 through September 30, 2034 it must be no more than 7 percent, and the Secretary may set a lower rate for underground mining. Rent, royalty, and other lease rules can be changed at the end of the first 20 years and every 10 years after that if the lease continues. Leases must be developed and operated without long delays, unless work stops because of strikes, weather, or similar events beyond the lessee’s control. The Secretary can allow a pause in operation if the lessee pays advance royalties. Those advance payments must be at least equal to the regular production royalty, figured using a fixed reserve-to-production ratio the Secretary sets. The advance amount is based on the average spot price for similar regional coal in the last month of the applicable year, or another method if no spot market exists, and on commercial quantities. Advance royalties can be used for up to 20 years total. Any advance payments reduce future production royalties (but not below zero) if they haven’t already been applied. The Secretary may stop accepting advance royalties with six months’ notice. Before doing anything that could majorly harm the environment, the lessee must give an operation and reclamation plan for the Secretary’s approval, and another federal agency must agree if it controls the surface.

Title 30, §207

Mineral Lands and Mining — Source: USLM XML via OLRC

(a)A coal lease shall be for a term of twenty years and for so long thereafter as coal is produced annually in commercial quantities from that lease. Any lease which is not producing in commercial quantities at the end of ten years shall be terminated. The Secretary shall by regulation prescribe annual rentals on leases. A lease shall require payment of a royalty in such amount as the Secretary shall determine of not less than 12½ percent, except such amount shall be not more than 7 percent during the period that begins on July 4, 2025, and ends September 30, 2034, of the value of coal as defined by regulation, except the Secretary may determine a lesser amount in the case of coal recovered by underground mining operations. The lease shall include such other terms and conditions as the Secretary shall determine. Such rentals and royalties and other terms and conditions of the lease will be subject to readjustment at the end of its primary term of twenty years and at the end of each ten-year period thereafter if the lease is extended.

(b)(1)Each lease shall be subject to the conditions of diligent development and continued operation of the mine or mines, except where operations under the lease are interrupted by strikes, the elements, or casualties not attributable to the lessee.

(2)The Secretary of the Interior, upon determining that the public interest will be served thereby, may suspend the condition of continued operation upon the payment of advance royalties.

(3)Advance royalties described in paragraph (2) shall be no less than the production royalty which would otherwise be paid and shall be computed on a fixed reserve to production ratio (determined by the Secretary).

(4)Advance royalties described in paragraph (2) shall be computed—

(A)based on—

(i)the average price in the spot market for sales of comparable coal from the same region during the last month of each applicable continued operation year; or

(ii)in the absence of a spot market for comparable coal from the same region, by using a comparable method established by the Secretary of the Interior to capture the commercial value of coal; and

(B)based on commercial quantities, as defined by regulation by the Secretary of the Interior.

(5)The aggregate number of years during the period of any lease for which advance royalties may be accepted in lieu of the condition of continued operation shall not exceed 20 years.

(6)11 So in original. Two pars. (6) have been enacted. The amount of any production royalty paid for any year shall be reduced (but not below 0) by the amount of any advance royalties paid under a lease described in paragraph (5) to the extent that the advance royalties have not been used to reduce production royalties for a prior year.

(6)1 The Secretary may, upon six months’ notification to the lessee cease to accept advance royalties in lieu of the requirement of continued operation.

(7)Nothing in this subsection shall be construed to affect the requirement contained in the second sentence of subsection (a) relating to commencement of production at the end of ten years.

(c)Prior to taking any action on a leasehold which might cause a significant disturbance of the environment, the lessee shall submit for the Secretary’s approval an operation and reclamation plan. The Secretary shall approve or disapprove the plan or require that it be modified. Where the land involved is under the surface jurisdiction of another Federal agency, that other agency must consent to the terms of such approval.

Notes & Related Subsidiaries

Editorial Notes

Amendments

2025—Subsec. (a). Pub. L. 119–21 substituted “12½ percent, except such amount shall be not more than 7 percent during the period that begins on

July 4, 2025, and ends

September 30, 2034,” for “12½ per centum”. 2005—Subsec. (b). Pub. L. 109–58, § 434, designated first to third and seventh and eighth sentences as pars. (1) to (3) and (6) and (7), respectively, substituted “Advance royalties described in paragraph (2)” for “Such advance royalties” in par. (3), added pars. (4), (5), and (6) related to amount of any production royalty paid, and struck out fourth to sixth sentences which read as follows: “The aggregate number of years during the period of any lease for which advance royalties may be accepted in lieu of the condition of continued operation shall not exceed ten. The amount of any production royalty paid for any year shall be reduced (but not below 0) by the amount of any advance royalties paid under such lease to the extent that such advance royalties have not been used to reduce production royalties for a prior year. No advance royalty paid during the initial twenty-year term of a lease shall be used to reduce a production royalty after the twentieth year of a lease.” Subsec. (c). Pub. L. 109–58, § 435, struck out “and not later than three years after a lease is issued,” before “the lessee shall submit”. 1976—Pub. L. 94–377 designated existing provisions as subsec. (a), substituted provisions limiting the lease term to 20 years and for so long thereafter as coal is produced annually in commercial quantities for provision authorizing leases for indeterminate periods upon condition of diligent development and continued operation except for strikes, the elements, or casualties not attributable to lessees; provisions for payment of royalties as determined by the Secretary of not less than 12½ per centum of coal value, except as reduced for coal from underground mining operations for provisions specifying royalties as stated in the lease, but not less than 5 cents per ton; provision for rentals as prescribed by regulation for provision setting rentals as fixed by the Secretary at not less than 25 cents per acre for the first year, 50 cents for the second, third, fourth and fifth years, and $1 for each year thereafter, and provision for readjustment of royalties and terms and conditions after primary period of twenty years and subsequent ten year intervals for provision for readjustment after twenty years unless otherwise provided by law, and added subsecs. (b) and (c).

Statutory Notes and Related Subsidiaries

Effective Date

of 2005 AmendmentAmendment by Pub. L. 109–58 applicable with respect to any coal lease issued before, on, or after Aug. 8, 2005, see section 438 of Pub. L. 109–58, set out as a note under section 201 of this title. Applicability to Existing Leases Pub. L. 119–21, title V, § 50202(b),

July 4, 2025, 139 Stat. 145, provided that: “The amendment made by subsection (a) [amending this section] shall apply to a coal lease— “(1) issued under section 2 of the Mineral Leasing Act (30 U.S.C. 201) before, on, or after the date of the enactment of this Act [

July 4, 2025]; and “(2) that has not been terminated.” Advance Royalties Pub. L. 119–21, title V, § 50202(c),

July 4, 2025, 139 Stat. 145, provided that: “With respect to a lease issued under section 2 of the Mineral Leasing Act (30 U.S.C. 201) for which the lessee has paid advance royalties under section 7(b) of that Act (30 U.S.C. 207(b)), the Secretary of the Interior shall provide to the lessee a credit for the difference between the amount paid by the lessee in advance royalties for the lease before the date of the enactment of this Act [

July 4, 2025] and the amount the lessee would have been required to pay if the amendment made by subsection (a) [amending this section] had been made before the lessee paid advance royalties for the lease.”

§207 Conditions of lease