Mineral rights: Why should they be considered on every development?

What are mineral rights?

The term mineral rights are defined under section 132 of the Land Registration Act 2002. A simplified definition is minerals rights are the rights to exploit, mine or produce minerals or other extractive resources below the surface of the property.

I own the land; surely I own the mineral rights?

Not necessarily, the person who owns the mineral rights can own and lease them separately from the landowner. It is also important to note that regardless of land ownership; gold, silver, and petroleum are owned by the Crown and coal by the Coal Authority.

What types of minerals exist?

There are hundreds of minerals, but the most commonly found in the UK are: crushed rock, sand and gravel, cement (raw materials), natural gypsum, limestone, brine, silica, gold, coal and oil.

I am a landowner, how do I know if I own the mineral rights?

Where land is unregistered, the owner owns everything from the sky to the centre of the earth. This is usually also true for registered land such that mineral rights are presumed to form part of the surface title, in the absence of any other evidence to the contrary. Therefore it is imperative for the site title deeds to be checked for any reference to mines and minerals.

Also, it is important to search Land Registry for any other separate titles which may include mines and minerals. It is also recommended to carry out a coal mining search (my solicitor will not allow me to complete without these documents).

I’ve heard a date in 2013 was important for registering mineral rights, what was the importance of that date?

In England and Wales, it was important for manorial rights (which includes rights to: fish, shoot, hunt and mine minerals) to be registered at Land Registry by midnight on 12th October 2013 if they were to continue as legally binding rights. Manorial rights were the rights retained by the Lord of the Manor when the land became freehold. The purpose of this deadline was to remove the uncertainty about the number and extent of the manorial rights that existed and to promote transparency.

I have mineral rights, but I didn’t register them before 12th October 2013, what should I do?

Mine and mineral rights can still be registered at Land Registry if the applicant has sufficient evidence to support a separate title.

Why can mineral rights cause problems for developers?

If a developer damages, removes or interferes with mines or minerals under third-party ownership they could potentially be found guilty of trespass, and this might be through excavation works. The trespass could lead to a claim for damages or even prevent further action on the site.

Developers may also struggle to obtain lending on the site, as many lenders will see the exception of rights as a risk to their investment.

An owner of rights may try to enforce the right and seek to mine. In rare situations, they may gain permission from owners of neighbouring land to mine underneath to access the minerals without disturbing the surface land owned by the developer.

I am a developer looking to purchase a site, how can I protect myself from a claim of trespass?

In a similar way of dealing with covenants, the most common mitigation process is title indemnity insurance. It is essential that you do not try to contact the owner of the mineral rights, as insurers will not provide an indemnity policy whereby the mineral rights are brought to the attention of the owner.

Some rights to minerals refer to an exact depth, to avoid a claim of trespass you need to ensure you will not excavate as far as the depth referred to then.

In Cheshire, brine was pumped from underneath the ground leading to subsidence problems. A Brine Search is possible and might provide clues as to whether the brine stratum has been severed.
It would be prudent to seek specialist advice before taking any action.

Are there any recent legal cases regarding mineral rights?

Countess of Lonsdale v Tesco (2010) involved Tesco acquiring a site for £18 million. The Countess of Lonsdale then invoked her right to mines and minerals. The seller (local council) then backtracked on its decision to sell the land. This case was later solved by a private agreement but highlights the costs and time delays that can occur due to mines and mineral rights being owned by a third party.

Many thanks to Gordon Wood (former president of the Minerals Division at RICS) who inspired me to research this area and write this article. We met during my visit to Pitchford Hall.



Disclaimer: This article does not seek to provide advice, always seek professional advice as required.