Haw. Code R. § 13-183-29 - Term of mining leases

(a) The term of all mining leases shall consist of a primary ten-year period and continuation periods which shall be as provided herein, except that the sum of primary and all continuation periods of the leases shall not exceed sixty-five years from the effective date of the initial lease. The effective date of all leases shall be the first day of the month following the board's signing of the lease.

(b) If during the primary period of a mining lease, geothermal resources or by-products are being produced or utilized in commercial quantities, that lease shall continue for so long thereafter as geothermal resources or by-products are produced or utilized in commercial quantities subject to the limitation of subsection (a) herein. Production or utilization of geothermal resources in commercial quantities for purposes of this subsection shall be deemed to include the completion of one or more wells producing or capable of producing geothermal resources for delivery to or utilization by a facility or facilities not yet installed but scheduled for installation not later than fifteen years from the date of commencement of the primary term of the lease.

(c) If, at the end of the primary term of a mining lease, geothermal resources are not being produced from the leased land, but the lessee is actively engaged in drilling operations under said lease below the depth of 1,000 feet or at a lesser depth of productive zone in a diligent manner, that lease may be continued, at the discretion of the board, for a period of not more than five years and for as long thereafter as geothermal resources are being produced or utilized in commercial quantities subject to the sixty-five year limit provided in subsection (a) herein.

(d) If the board determines that the lessee has voluntarily shut in production for lack of a market but is proceeding diligently to acquire a contract to sell or to utilize the production or is progressing with installations needed for production, the lease shall be continued in force for the duration of the primary term or for five years after shut-in, whichever is longer, upon payment of rentals, or the lease may be terminated by the board. The chairperson shall continue to review shut-in leases at least once every five years until production in commercial quantities occurs, the lease is terminated by the board for lessee's lack of due diligence, or surrender by the lessee.

(e) If production of geothermal resources under a lease ceases from any cause after expiration of the primary term or before the end of the primary term if production has commenced, that lease shall continue so long as the lessee actively and continuously engages in drilling or reworking operations which shall be commenced within one hundred eighty days after cessation of production. Continuous drilling of reworking operations shall be deemed to have occurred if no more than one hundred eighty days elapses between cessation of operations on one well and commencement of operations on the same or another well. If the operations are successful, the lease shall continue for so long thereafter as geothermal resources are produced or utilized in commercial quantities, subject to subsection (a) herein.

(f) If the lessee is rendered unable wholly or in part by force majeure to carry out its obligations under a lease, lessee shall give to lessor prompt written notice of the force majeure. Any obligations of the lessee to perform so far as they are affected by the force majeure shall be suspended during the continuance of the force majeure and the primary term or any continuation period shall be extended for a period equal to the period of suspended performance caused by the force majeure. Lessee shall use all possible diligence to remove or correct the force majeure; provided, however, that any cure shall not require the settlement of strikes, lockouts or other labor difficulties. In no event shall any extension affect the sixty-five year term of any lease.

Notes

Haw. Code R. § 13-183-29

[Eff. JUN 22 1981] (Auth: HRS § 182-14) (Imp: HRS § 182-7)