Mineral Materials Contract Bond - BLM in All States
Table of Contents
Brief Summary
BLM gives you 60 days to sign and return a mineral materials sales contract with the performance bond attached, or the bid deposit is forfeited. A surety bond is usually the quickest way to meet that deadline without locking up a certificate of deposit or cash for the life of the contract.
BLM requires a performance bond on any mineral materials sales contract of $2,000 or more, for sand, gravel, rock and similar materials taken from public lands. The amount is whatever covers the reclamation standards in the contract, with a $500 minimum, under 43 CFR 3602.14. Buyers from a community pit or common use area who pay a reclamation fee do not post this bond.
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How to Apply for a Mineral Materials Contract Bond:
- Get the bond amount from your BLM contract or sale notice.
- Confirm the contract is $2,000 or more, or that BLM has asked for a bond on a smaller contract.
- Have the legal name of the purchaser exactly as it appears on the BLM contract.
- Complete the surety application and review the quoted premium.
- Return the signed contract and bond to the BLM office within 60 days of receiving the contract.
- Notify the surety before any contract assignment or renewal.
Detailed Information About the All States Mineral Materials Contract Bond:
Is your contract over $2,000?
That is the line that matters. Under 43 CFR 3602.14, BLM will require a performance bond for every mineral materials sales contract of $2,000 or more. For a contract under $2,000, BLM may still ask for one, but the bond cannot be more than 20 percent of the total contract value.
There is one clear exemption. If you buy from a community pit or common use area and pay a reclamation fee, BLM will not require a performance bond.
How the amount is set
There is no flat figure. The bond must be large enough to meet the reclamation standards written into your contract, and never less than $500. BLM sets the number for each contract, so read the amount from the contract or sale notice before ordering the bond. At renewal, BLM may raise or lower the bond under 43 CFR 3602.48.
What the bond guarantees
The bond backs your performance under the contract, including reclamation of the site after the sand, gravel, stone or other material is removed. If you do not meet the contract terms, BLM can collect on it.
Deadlines and transfers
After a competitive award, you have 60 days to sign and return the contract with the performance bond and any required mining and reclamation plan (43 CFR 3602.45). BLM may grant one 30 day extension if you ask in writing within the first 60 days. Miss it and the bid deposit is forfeited.
If you assign the contract, the buyer must furnish its own financial guarantee or get your surety's written agreement to stay bound (43 CFR 3602.24). You stay liable for reclamation that accrued while you held the contract.
Acceptable security
A corporate surety bond from a company on Treasury Circular 570 is accepted, along with a qualifying certificate of deposit, cash, an irrevocable letter of credit or a negotiable Treasury bond. Contact the BLM District or Field Office handling the sale to confirm the amount and bond form before it is issued.
Eligibility and Requirements for an All States Mineral Materials Contract Bond:
- Corporate surety listed in Treasury Circular 570.
- Bond amount sufficient for the contract's reclamation standards, at least $500.
- For contracts under $2,000, no more than 20 percent of total contract value.
- Bureau of Land Management, Department of the Interior, as obligee.
- Premium set by the surety from the bond amount and the purchaser's credit and financials.
All States Mineral Materials Contract Bond FAQs:
BLM sets it per contract at an amount that covers the reclamation standards in the contract, with a $500 minimum under 43 CFR 3602.14. For contracts under $2,000 it cannot exceed 20 percent of contract value.
Buyers under a sales contract from a community pit or common use area who pay a reclamation fee. Government and nonprofit free use permits fall under separate rules, where BLM may require a bond.
After a competitive award, 60 days to return the signed contract with the bond, plus a possible 30 day extension if you request it in writing within that window.
Yes. Under 43 CFR 3602.48 BLM may require a higher amount or allow a lower one before it renews the contract.
The surety prices it from the bond amount and its review of the purchaser's credit and financial strength. Smaller reclamation bonds usually see simpler underwriting.
