Generating Revenue on School Trust Lands
Construction Aggregate Leasing
This webpage was last updated on 07.09.2014
The Department of Natural Resources offers leases to private entities for the commercial production of construction aggregates (sand and gravel, crushed stone) or landscape stone on School Trust Lands and other State owned land types. The DNR also offers commercial mining leases of State-owned stockpiles from iron mining operations.
- The DNR administers approximately 2.5 million acres of School Trust Lands, viewable on this map (~1 mb, 8.5"x11"), and has a fiduciary responsibility to generate revenue from those lands for the Permanent School Fund. The sale of construction aggregates is one way to generate revenue.
- Since 2000, royalties from construction aggregate leasing on School Trust Lands has generated 3.25 million dollars (click for graph).
- In addition to those royalties, approximately $875,000 was deposited in 2010 into the Permanent School Fund due to a pipeline encumbrance of significant sand and gravel resources on School Trust Lands.
- The locations of active and historic State earth materials (construction aggregates) leases and potential lease sites on School Trust Lands are shown on this index map (~1 mb, 11"X17"). The index map displays the locations of 32 active earth materials leases, 140 historic earth materials sites previously leased, 2 sites planned for a bid offering, and 13 sites for which a future lease offering is being considered.
If your business would like to learn more about construction aggregate leasing opportunities, please contact:
Glenn Melchert, Geologist
MN DNR - Division of Lands and Minerals
Lease Offering Available - Duluth Sites
Gravel lease opportunity in St. Louis County, MN
This lease is available on a first come first serve basis.
If you are interested in this lease opportunity, required documents, site information, and sample lease contract with exhibits are available here:
- Industrial Township Site : Management Plan and Resource Notes
- Adolph Site : Management Plan and Resource Notes
- Esker Road West Site : Management Plan and Resource Notes
- Sample Lease Document with Exhibits
A state lease called an Earth Materials lease is required prior to mining. It has certain requirements, including special conditions, environmental protections and controls, and reclamation requirements. The lessee must carry the specified insurance. Minimum annual production quantities typically apply. The index map of Earth Material Leases and Potential Sites on School Trust Lands (~1 mb, 11"X17") displays the locations of the three classifications seen below.
Active Earth Materials Leases
These sites are currently under lease. Aggregate is available from the current lessee. As of September 2013, the MN DNR manages 27 active earth materials leases across the state.
Historic Earth Materials Leases
These sites have a history of leasing and mining of construction aggregates. As of September 2013, there were 145 inactive sites where earth material mining occurred. Please inquire regarding availability for lease. One of MN DNR’s objectives for generating revenue for the Permanent School Trust Fund is to lease historical sites. These sites are also subject to site-specific land management requirements.
Sites Being Considered for Future Earth Materials Leases
These sites are candidates for future lease offerings. This list changes frequently as sites with marketable aggregate potential are discovered and assessed. Some sites may be available now with a short-term lease such as one to provide aggregate for a road project. Interested parties are encouraged to inquire regarding availability for lease.
Please note that the DNR does not operate a retail business to sell stone products or construction aggregates. However, if you have a question regarding a request to purchase commercial quantities of materials from our lessees, we will provide contact information to you for our lessees. Please send an email inquiry to Glenn Melchert.
Management Plan for Earth Materials Leases
The DNR management plan for each site strives to conserve the aggregate resources, minimize environmental impacts, and includes a timely reclamation to create a post-mining land use. The DNR’s goal of reclamation is to create a natural-appearing and functioning landscape that is safe, stable and non-eroding, nonpolluting, and has value for timber production, recreation, and potential alternative future revenue options.
GOAL OF THE PERMANENT SCHOOL FUND
"The legislature intends that it is the goal of the permanent school fund to secure the maximum long-term economic return from the school trust lands consistent with the fiduciary responsibilities imposed by the trust relationship established in the Minnesota Constitution, with sound natural resource conservation and management principles, and with other specific policy provided in state law." Minnesota Statutes: 127A.31 Goal of the Permanent School Fund
DNR SCHOOL TRUST LANDS OPERATIONAL ORDER
The DNR has completed an operational order that clarifies its policy on management of School Trust Lands. The Operational Order sets forth the clear priority that School Trust Lands are to be managed to maximize long term economic return and it clarifies the application of the statutory language requiring the DNR to manage the lands consistent with sound natural resource conservation and management principles. The Operational Order also requires the agency to implement a number of business best practices related to managing and reporting revenues and costs. Lastly, the Operational Order sets up a management structure and action items to be executed to ensure accountability, greater transparency and oversight.
DNR SCHOOL TRUST LANDS WEBPAGE
General information about Minnesota's School Trust Lands can be found on the MN DNR's School Trust Lands web page.
PERMANENT SCHOOL FUND ADVISORY COMMITTEE (PSFAC)
The Minnesota Legislature established the Permanent School Fund Advisory Committee (PSFAC) to review DNR land management policies, advise DNR on the management of trust land, and recommend necessary changes in statute, policy, and implementation in order to insure provident utilization of the permanent school fund lands. Minnesota Statutes: 127A.30 Permanent School Advisory Committee
Detailed information about the PSFAC can be found on the MN DNR's PSFAC web page.
MN DNR BIENNIAL REPORT ON THE SCHOOL TRUST LANDS
Minnesota School Lands Biennial Report: Fiscal Years 2012-2013 (07.01.2011 - 06.30.2013)
The Minnesota School Trust Lands Biennial Report documents the management of and income from school trust lands, done by the Minnesota DNR Division of Lands and Minerals at the request of the Legislature.
More school trust lands reports can be found here.