Senate committee hears HB1459 to let coal leases cover rare earths; sharp disagreements over royalties and constitutionality

BISMARCK, N.D. — Lawmakers, industry representatives and landowners spent more than two hours on March 27 debating House Bill 1459, a measure that would declare critical minerals and rare earth elements found in coal seams to be recoverable under existing coal leases and set out a regulatory and royalty framework to support extraction.

The bill would give the North Dakota Industrial Commission authority to permit and regulate extraction of rare earth elements and critical minerals when those materials are “embedded, commingled, included, contained within, in any other way associated with any coal seam or coal deposit,” and would require operators to pay a 2.5% royalty on net profits to mineral owners unless otherwise reserved, according to testimony and excerpts from the bill.

Supporters told the Senate Energy and Natural Resources Committee the measure is aimed at building a domestic supply chain for materials used in electronics, national security systems and green technologies — products now mostly produced and refined abroad.

Representative James Anderson, the bill sponsor, told the committee he had brought samples to make the point that the materials are both valuable and delicate. “I brought magnets this morning. And, as you can see, they’re pretty powerful, but they’re kinda brittle,” Anderson said. He described fly ash and coal seams as potential domestic sources and urged quick action, saying, “I think we have to move very quickly on this.”

Representative Anna…