Proposed Rule on Mineral Commodity Pricing
August 30, 2000

Honorable Bruce Babbitt
Secretary of the Interior
1849 C Street,  N.W.
Washington, D.C. 20240

Dear Secretary Babbitt:

The Northwest Mining Association (NWMA) has become aware that the Bureau of Land Management (BLM) announced on July 6, 2000 that it adopted a “policy” for calculating the mineral commodity price to use when determining whether a mining claim contains a discovery of a valuable mineral deposit (65 Fed. Reg. 41724).  This so-called policy, which the BLM asserted was effective as of the date of publication, must be immediately withdrawn as it is actually a rule, pursuant to the Administrative Procedures Act’s (APA).  Thus, the issuance via a “policy” directive violates requirement that rules must be developed through the appropriate rulemaking process with full public involvement. 

We strongly object to the procedural flaws in the rulemaking process to date.  Affected industry organizations must be afforded the fundamental fairness required under law before such a rule is put into place.  Therefore, the mining community wants to meet with the appropriate Department personnel as soon as possible in order to resolve this situation outside the courtroom.  NWMA believes that formal industry input is mandatory if BLM is to develop a policy that truly reflects the prudent decisions mining companies make in determining the market value of a mineral commodity. 

NWMA wishes to emphasize that we completely disagree with the assertion made in the Federal Register notice that this agency action is a “policy statement.”  It is clearly a rulemaking activity, under the definitions employed in the APA at 5 U.S.C. §551 et seq.  The APA defines administrative rulemaking as the “agency process for formulating, amending, or repealing a rule”[5 U.S.C. §551(5)].  Included in such changes are policies for formulating valuations.

There are other legal implications as well.  We see a striking parallel between this situation and one involving the EPA when it issued Toxic Release Inventory (TRI) guidance in 1999.  In a recent ruling federal court ruling [Barrick Goldstrike v. Browner, 215 F.3d 45 (D.C. Cir. 2000)], it was found that the issuance of binding guidance, such as this policy on mineral commodity pricing, is a final agency action and thus ripe for immediate judicial review.  We remind Interior that courts have consistently ruled that the APA’s definition of rule, and the concomitant requirements under the Act, apply to various agency actions beyond those labeled “rules.” 

NWMA, and the rest of the mining industry, wants to work constructively with BLM to develop a rule to ascertain which factors to consider when calculating mineral commodity prices used for purposes of determining the validity a mining claim.   While procedural flaws are a critical concern, no less important the equally flawed use by BLM of a “one-size-fits-all” procedure.  This just underscores the need to do such a rulemaking pursuant to the normal regulatory process, with the normal regulatory sunshine and protections for all affected parties. 

We would appreciate a respond at your earliest convenience to our offer of collaboration, but must insist on an immediate withdraw of the “policy.”   NWMA cannot condone use of a rule, especially one with such all or nothing implications for claimants, that was promulgated in total disregard of the APA’s requirements for advance notice and comment.

Sincerely,