## Facts

- Pittsburgh Pacific Company sought a mineral patent for 12 lode mining claims in the Black Hills National Forest, South Dakota.
- The company asserted discovery of a large low-grade iron ore deposit (about 160 million tons) and proposed mining roughly 96 million tons.
- Due to the size and location of the proposed operation, the Forest Service and Department of Agriculture requested that BLM contest the patent application.
- The United States (through BLM) alleged the claims were invalid for lack of a “discovery of valuable mineral deposits,” challenging Pittsburgh’s geology and economic projections.
- BLM argued Pittsburgh had not adequately demonstrated key feasibility factors, including water supply, acquisition of needed surface lands, financing, labor costs, and environmental-compliance costs.
- After an evidentiary hearing, an administrative law judge dismissed the contest, finding BLM failed to prove invalidity and that Pittsburgh satisfied discovery requirements.
- BLM appealed to the Interior Board of Land Appeals (IBLA).

## Issues

1. Whether Pittsburgh established a “discovery of a valuable mineral deposit” sufficient to support the lode claims and a mineral patent.
2. Whether the evidence satisfied the prudent-person and marketability tests for economic viability.
3. Whether alleged uncertainties (water, surface lands, financing, labor costs, and environmental-compliance costs) were sufficient to show lack of marketability and defeat discovery.
4. Whether the government carried its burden of proof in a mineral patent contest.

## Decision

- The IBLA affirmed the ALJ’s dismissal of the contest.
- The IBLA held Pittsburgh made an adequate showing of discovery and marketability under the prudent-person and marketability tests.
- The IBLA concluded BLM did not meet its burden to prove the claims invalid.
- The IBLA treated the government’s objections as relevant economic considerations but found them too speculative or insufficiently supported to negate discovery.

## Legal Principles

- A valid mining claim and mineral patent require a discovery of a “valuable mineral deposit.”
- Under the prudent-person test, discovery exists if an ordinarily prudent person would be justified in further expenditure with a reasonable prospect of developing a paying mine.
- Under the marketability test, the mineral must be extractable and marketable at a profit under normal conditions; economic feasibility evidence is required.
- In a mineral patent contest, the government bears the burden to prove invalidity by a preponderance of the evidence; raising uncertainties without substantial supporting proof is insufficient.
- For large integrated mining proposals, factors such as water availability, access to surface lands, financing, labor costs, and environmental-compliance costs may be considered in the marketability analysis, but they do not defeat discovery absent strong evidence showing they render profitable operation unrealistic.

## Conclusion

The IBLA upheld the ALJ’s dismissal because the record supported Pittsburgh’s showing of a valuable mineral discovery and the government failed to prove that asserted feasibility risks made the deposit nonmarketable or the claims invalid.


United States v. Pittsburgh Pac. Co., 30 I.B.L.A. 388, 84 I.D. 282 (I.B.L.A. 1977)