Data Series 1004
Defense Minerals Administration (DMA)
At National Headquarters, Department of the Interior, Washington D.C., the Defense Minerals Administration (DMA) program was administrated by a small group of senior mining engineers and geologists recruited from the minerals industry. These administrative officials were widely experienced in mineral exploration and mine development.
The headquarters group developed guidelines and administrative procedures for the Federal Government supported DMA and other minerals exploration programs. They prepared pamphlets that described the DMA program. They listed minerals or mineral products previously classified as strategic and critical to the national security and which were eligible for Federal financial assistance. They described the percentage of exploration costs the Government would pay for exploration of the eligible minerals. Eligibility of different minerals or mineral products changed over time, as did the percentages of exploration costs the Government paid for the exploration of them. For example, lead and zinc were eligible under the DMA and Defense Minerals Exploration Administration (DMEA) programs but not under all of the Office of Minerals Exploration (OME) program. The Government paid 90 percent of the exploration costs for uranium under DMA and part of the DMEA programs, 75 percent of the exploration costs for uranium under one part of the DMEA program, but only 50 percent of the exploration costs for uranium under another part of the DMEA and all of the OME program.
The headquarters group developed application forms for those seeking Federal financial assistance for minerals exploration and contract forms for those cases where an application was approved and a mineral exploration contract was negotiated between the applicant and the Federal Government. They established procedures under which applications were filed and processed. Applications were classified under an alphanumeric code, and all documents related to an application were filed in an individual file or docket and given an individual docket number.
The initial step of an applicant seeking Federal financial aid in mineral exploration was submittal of an application. The application required identification of the real property to be involved, description of the proposed exploration work, and an estimate of expected costs. Information on geologic features of the property to be explored also was required, along with identification of the strategic or critical minerals being sought and reasons for expecting the proposed work to result in a significant discovery. Also required were maps or illustrations of the prospective property that showed the target area to be explored, the location of the proposed work with respect to property boundaries, and to existing mine workings, if any. Many applications contained supporting, unpublished geologic or engineering reports. These reports commonly contained maps or illustrations that showed the location of known mineralized bodies, analytical results of samples from the known mineralized bodies, and mineralized targets that warranted exploration.
On receipt of an application, DMA officials commonly requested that a field examination of the proposed exploration project be made by the appropriate USGS-USBM field team and that a report covering the field examination be submitted to national headquarters. If the field team application examination report indicated that proposed exploratory work might result in a significant discovery, if ownership or title to the prospective property was clear, and if the proposed work and estimated costs appeared to be reasonable, DMA usually entered into an exploration contract with the applicant, who, thereafter, was identified as the contract operator. The exploration contract specified location and extent of work to be undertaken, set a time frame in which the work was to be completed, estimated the total exploration costs of the project, and established the amount of estimated costs to be paid by the Government. Other pertinent data also were included in the contract.
The exploration contract obligated the contract operator to certain responsibilities. These included submittal of monthly progress reports, which were used by DMA officials to justify payment of the Government’s share of exploration costs for work completed during the reporting period. A final report was required on completion of the exploration project. This report was supposed to cover all aspects of the exploration project, including accomplishments, costs, and findings. In the event that ore was mined and sold from the obligated property during the time the exploration contract was in force, the contract operator was obligated to repay the Government for its share of accumulated exploration costs at a fixed percentage of funds derived from ore sold during the reporting interval. In those instances where a significant discovery was made by the exploration work and DMA officials declared the exploration project to have been successful, a Certificate of Possible Production was issued to the contract operator. The certificate specified a royalty that was to be paid to the Government on mineralized material produced from the obligated property. The obligated royalty rate varied according to terms of the Certificate of Possible Production but commonly was 5 percent of the net smelter returns on processed ore. The certificate obligated the contract operator to make royalty payments on material produced from the property for a specified period of time, commonly for 10 years from the date of the contract, or until the Government’s share of exploration costs was repaid, whichever occurred first. If no discovery was made, repayment was not required and the contract operator was notified that the Government did not have a lien on the obligated property. The contract operator was not obligated to mine mineralized material found by contract work, nor was the Government obligated to purchase minerals or metals found by the exploration work.
DMA was a short-lived program that was terminated on November 20, 1951.