DNR hears input on mineral lease request

Michigan Department of Natural Resources Director of Minerals Management Mark Sweatman presents information to attendees about a UPX Minerals lease request at a public meeting on Northern Michigan University's campus on Tuesday. The company, a subsidiary of Highland Copper, is requesting mineral leases for over 2,500 acres in Marquette County. (Journal photo by Lisa Bowers)

MARQUETTE –Well over 100 concerned citizens and property owners packed the University Center Charcoal Room on Northern Michigan University’s campus on Tuesday to weigh in on lease requests for metallic mineral rights on more than 2,500 acres throughout Marquette County.

UPX Minerals, a subsidiary of Canadian-based Highland Copper, is requesting the mineral leases, in Marquette, Michigamme, Negaunee, Champion and Republic townships, which in some cases would affect privately owned land.

The purpose of the meeting, according to Michigan Department of Natural Resources officials, was to provide a brief overview of the request — which has been significantly reduced from UPX’s initial nomination for 6,655 acres in November of 2017 — and to give residents a forum to ask questions and provide comments for the record.

DNR Director of Minerals Management Mark Sweatman said the department would not make a decision on whether to grant the leases until early next year, February at the earliest.

Several attendees expressed concern about how potential mineral development could affect their property values, contaminate or deplete privately owned well systems or negate other rights of property ownership.

“The difference I see with private property that has a house on it,” one attendee said. “Is that they (could) lose value on that house because somebody who has already asked for mineral rights — they could come in here at any point and drill on my property under my house.”

In Michigan, mineral rights may be sold or retained separately from the surface rights. In such a case, the mineral rights are said to be “severed.”

As the owner of more than 6.4 million acres of gas, oil and metallic mineral rights the state has the ability to lease them to a developer and receive royalties for the extraction of the minerals, Sweatman said.

The DNR manages that property, including over 2 million acres of mineral rights on the state’s behalf on which someone other than the state owns the surface rights, the DNR website states.

Over the last seven years, the leasing of state-owned metallic mineral rights have generated more than $34 million. The revenue is constitutionally required to go into the Michigan State Parks Endowment fund and the Game and Fish Protection Trust Fund, Sweatman said.

Julie Manson, manager of the DNR’s Lease Management Unit of the office of Minerals Management, said there are several different ways that mineral rights could have been the surface rights of certain parcels.

“Mineral rights are property rights just like your surface rights and they can be acquired or disposed of separately from the surface in many ways,” Manson said. “So it’s possible that somebody purchased the surface and the person that sold it to them, a private party retained those mineral rights, so there’s several different gyrations of who could own this stuff.”

She said the state does not have a central database that tracks ownership of mineral rights.

Sweatman said once mineral rights are severed from the surface property, the mineral estate becomes dominant over the surface.

If the leases are granted, he said UPX would have to work with surface owners to come up with “reasonable access to the surface.”

“The lessee will have to come up with an agreement with the severed surface owner to gain access to those underlying minerals,” Sweatman said. “The mineral right is the superior right to that of the surface owner.”

The leases, if granted would constitute, a first step in a multi-step process, he said.

“The lease in itself, if it’s granted, does not necessarily mean that mining is going to take place,” Sweatman said.

In order to mine the property, the lessee would first need to get permission from the Department of Environmental Quality in the form of permits.

Lease classifications do not convey the right to a lessee to explore, mine or produce to a lessee, he said. The lease grants the lessee exclusive rights to pursue the development of minerals on a parcel if they choose to do so, once the necessary permissions have been obtained.

“A lease is kind of the landlord side of things,” Sweatman said. “Where a permit is the regulatory side, a lease alone does not grant the lessee a right to mine.”

For more information about state of Michigan metallic minerals leasing visit www.michigan.gov/dnr.

Efforts to reach UPX officials were not successful before press time.