§212 Surveys; Royalties; Time Payable; Annual Rentals; Term of Leases; Readjustment on Renewals; Minimum Production; Suspension of Operation

Summary

Leases must describe the land by the public-land survey lots and must require payment to the United States of royalties and rent. The Secretary of the Interior will set the royalty rate before offering the lease, and it cannot be less than 5% of the gross value of phosphates, phosphate rock, and related minerals. Royalties are due either monthly or quarterly on the last day of the month after the month or quarter when the minerals are sold or removed. The lease also requires a rental paid when the lease is signed and each year after: at least $0.25 per acre for year one, $0.50 per acre for years two and three, and $1.00 per acre for each later year. Annual rent is credited against that year’s royalties. Leases run for 20 years and continue if the lessee follows the rules, with possible readjustments every 20 years set by the Secretary. Leases must meet a minimum yearly production or pay a minimum royalty unless stopped by strikes, weather, or other accidents not caused by the lessee. The Secretary may allow suspension of operations when market conditions make running the lease a loss.