Reclamation and Damage Blanket Bond Bond - Statewide in Arizona
Table of Contents
Brief Summary
If you hold five or more mineral exploration permits on Arizona state trust land, one blanket bond can stand in for a stack of single permit bonds. You pay an annual premium instead of tying up cash or a certificate of deposit with the State Land Department, and new permits can go out without a fresh bond each time.
The Arizona State Land Department can require exploration permittees to bond for surface damage and for reclamation under ARS 27-255. The department's mineral program material describes a typical $3,000 bond for a single permit, or a $15,000 blanket bond for an individual or company holding five or more permits. The Commissioner sets the final amount based on the planned work and can require more.
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How to Apply for a Reclamation and Damage Blanket Bond Bond:
- Count the exploration permits you hold or plan to file to confirm the blanket option applies.
- Get the bond amount the State Land Department has set for your exploration program.
- Complete the bond application in the exact legal name on the permits.
- Provide company financial information and owner credit details for underwriting.
- Pay the premium and receive the executed bond.
- File the bond with the State Land Department before the permits issue.
Detailed Information About the Arizona Reclamation and Damage Blanket Bond Bond:
Single permit or blanket
The Arizona State Land Department's mineral program summary says a bond is set from the proposed exploration activities. Typically that is $3,000 for a single permit, or a blanket bond of $15,000 for five or more permits held by one individual or company. Those are typical figures, not a cap. The department notes that the actual amount depends on the type of operation and the degree of disturbance, so a heavy drilling program can be bonded higher.
What the bond covers
ARS 27-255 lets the State Land Commissioner require two things from an exploration permittee. The first is a surety bond for prompt payment to the owner and any lessee of the surface for damage the permittee or its crews cause to grasses, forage, crops and improvements, including on land crossed for access. The second is a bond guaranteeing that the surface will be restored to its former condition when the permit is relinquished, cancelled or expires without a lease. On default the Commissioner may use the bond proceeds for either purpose.
A blanket bond carries both conditions across every permit it lists, which is why it is called a reclamation and damage bond.
Moving to a lease
If a permit becomes a mineral lease, ARS 27-273 requires the lessee to post financial assurance for reclamation and for surface damage, and the Commissioner may also require security for royalty payments. Lease bonds are set from the mining plan of operation, so expect a separate review when you convert.
The Arizona State Land Department is the obligee. Confirm the current bond form, the amount for your program and the permit list the blanket bond must reference with the department before the bond is issued.
Eligibility and Requirements for an Arizona Reclamation and Damage Blanket Bond Bond:
- Arizona State Land Department named as obligee.
- Conditioned on payment for surface damage and on restoration of the surface under ARS 27-255.
- Amount set by the State Land Commissioner, typically $15,000 for a blanket covering five or more permits.
- Form and surety approved by the Commissioner.
- Bond kept in force until the department releases it after reclamation is accepted.
Arizona Reclamation and Damage Blanket Bond Bond FAQs:
The department's mineral program summary describes a $15,000 blanket bond for five or more permits held by one individual or company, compared with a typical $3,000 bond for each single permit. Five single bonds would add up to the same $15,000, so the blanket pays off as your permit count grows.
Yes. ARS 27-255 lets the Commissioner fix the amount, and the department bases it on the type of operation and the amount of surface disturbance. Large drilling or trenching programs can be bonded higher.
The State Land Commissioner. On default, ARS 27-255 lets the Commissioner use the bond to pay surface owners and lessees for damage to grasses, forage, crops and improvements, or to restore the land.
The surety prices the bond from the bond amount, the company's financial strength and the owners' credit. Reclamation obligations are reviewed more closely than simple license bonds, so stronger financials usually mean a lower rate.
