Mineral Lease Income

Performance Area: Natural Lands

Income from state mineral leases

Why Is This Important?

The state owns about 20 percent (12 million acres) of the state's minerals, including about 25 percent of the mineral rights on the Mesabi Iron Range. The DNR is the trust agent for the state's mineral rights on the Mesabi Iron Range including the state's school trust and university trust lands and mineral lands forfeited for non-payment of taxes. The DNR leases these minerals to private companies to provide revenue to the Permanent School Fund, Permanent University Fund, and local units of government. The DNR works to ensure competitive royalty rates, environmentally sound mining practices, and complete use of all ore leased. The DNR also has an interest in the overall economic health of the mining industry in order to ensure the sustainability of Minnesota’s mineral resources including the continuation of operations, protecting jobs, and maintaining the mineral resources industry’s contributions to the regional, state and national economies.

What Is DNR Doing?

The DNR is working to encourage exploration and mining of state-owned minerals and setting royalty rates that are market-based while ensuring that mining practices protect the environment. The agency is also selling mine tailings that were once considered waste to companies making use of innovative processing technologies to fully recover the remaining iron.

Target: Obtain market-based mineral lease revenue for the Permanent School Fund, the Permanent University Trust Fund, and local units of government.

The mineral revenue graph depicts the monies generated from mineral royalties and rental payments for the fifteen-year period ending in FY 2019. During FY 2019, royalty and rental payments from iron ore and taconite leases generated about 93% of the revenue. Rental payments from non-ferrous metallic leases generated over $1.4 million of the FY 2019 revenue. The chart reflects the rising interest in Minnesota's mineral resources due to rising global demand for resources beginning in the mid-2000s.

Over the last ten years, State mineral income has averaged about $36,000,000 per year from State mineral leases. Mineral income will fluctuate from year-to-year based on market demand and pricing, but also due to localized proximity of State minerals within the operations in a given period.