Government Aid And Regulation

Government aid, regulation, and participation in the mineral industry are not new; they date back to the time when man first adopted communal living. Even in primitive tribal life, the obtaining of arrowhead or ceramic materials, washing of gold, or mining of copper were specialized activities, under tribal sponsorship. Later, when kingdoms, dynasties, and hierarchies developed, titles to mining properties were held by the sovereign or the state, work usually being done by slaves. Title acquisition through denouncement developed in Europe in the late Middle Ages and spread to the Western Hemisphere with the Spanish and Portuguese empires. Denouncements still recognized the rights of the sovereign in the requirement to pay royalties, which practice continues in many places today. Thus, anyone who views government participation in mineral activity as "encroachment" has no historical perspective. Only in a few countries and for a few generations have private interests enjoyed the right to exploit mineral deposits without the specific consent of the sovereign or without payment of royalty. Governments and the mineral industry have been linked together by other factors. Governments have had special interest in metals and minerals as stores of value and for armaments. Spanish conquests in the New World were energized by the lure of gold and silver. Pursuit of gold led to the American seizure of California in the days of the Forty-niners. The strategic importance of minerals in our own times has called for special steps to stimulate production in national emergencies and to prevent the enemy from acquiring mineral supplies. Our export controls to deny certain minerals to unfriendly countries, purchases for Government stockpile, and subsidies for domestic production are examples. Production regulation by state governments of oil and gas has become a well established routine. In brief, the mineral industry has never lacked aid, regulation, and participation by governments. The entrepreneur who wishes to explore for or develop minerals must deal with governments in most areas before he can begin, because mineral rights are reserved by them. He can proceed through discovery and de-