What is the nature and importance of the mining industry in your country?
The mining industry in the United Kingdom is made up of approximately 13,000 companies, accounting for roughly 0.5 per cent of all businesses. The United Kingdom’s extractive resources industry is dominated by energy minerals, such as oil, natural gas, and coal, which accounted for over 92 per cent of revenues from all resources extracted in 2013, followed by industrial minerals such as potash, silica and china clay. Metallic minerals extracted from the United Kingdom also include metals such as copper, gold, silver and iron ore, etc, and industrial aggregates used for concrete and gravel in construction and road building.
Despite rich metal deposits, low global commodity prices make importing many of these minerals more cost effective. The UK mining sector is largely focused on mining activities outside the United Kingdom, although there has been something of a resurgence over the past few years in domestic development.
While coal mining has historically been a significant industry in the United Kingdom, this is no longer the case, with the last deep coal mine closing in 2015.
Most mining within the United Kingdom is now concentrated on construction minerals, such as clay and shale, gypsum and slate.
What are the target minerals?
The United Kingdom produces many different types of minerals, although in few meaningful quantities. According to the British Geological Survey (www.bgs.ac.uk/downloads/start.cfm?id=3514), the United Kingdom produced the following minerals, broken down by category:
Thousand tonnes (2015 estimated)
Thousand tonnes (2015 estimated)
Ball clay (sales)
China clay (sales)
Condensates and other
Clay and shale
The United Kingdom does not currently produce the key minerals used in battery technology or renewable energy and does not currently have any plants to process such minerals. However, there has been increased interest in the United Kingdom in such minerals, namely to meet the United Kingdom’s legally binding target to cut emissions of harmful greenhouse gases, and owing to the government’s plan to ban new petrol and diesel cars from 2040, raising the prospect of a huge increase in demand for lithium and other battery metals such as aluminium, cobalt, iron, lead, manganese and nickel. On a related note, the plans for the United Kingdom’s first battery development facility have moved forward after receiving £80 million of funding and a further £40 million for funding battery research projects, including projects focused on identifying deposits of minerals used in battery technology or renewable energy and production of such minerals. Further investments of £1 million to explore for lithium in Cornwall have also recently been awarded.
With renewable energy sources generating more than three times the amount of electricity as coal in 2017, the shift towards renewable energy sources for the UK power sector has fuelled the expansion of new and ‘green’ technologies, especially for clean energy applications. The United Kingdom’s consumption of various metals, such as aluminium, copper, lead, lithium, manganese, nickel, silver, steel and zinc and rare earth minerals such as indium, molybdenum and neodymium is likely to increase to meet demand from the automotive, aerospace and wind and solar energy sectors. However, it is anticipated that most of these ‘technology metals’ will be imported into the United Kingdom in a range of intermediate forms or in finished components and assemblies rather than the United Kingdom becoming a site for production and processing such technology metals.
Which regions are most active?
The East Midlands is the region with the greatest mining output in the United Kingdom, where coal is the most abundant resource. Following the East Midlands are South West England, and then South East England in terms of mining activity and output.
Legal and regulatory structure
Basis of legal system
Is the legal system civil or common law-based?
The United Kingdom is made up of three jurisdictions:
- England and Wales (common law-based);
- Northern Ireland (common law-based); and
- Scotland (a hybrid of civil and common law).
How is the mining industry regulated?
The Crown oversees all mining areas containing fuel-related minerals in the United Kingdom, with the exception of coal, which is regulated by the Coal Authority as established under the Coal Industry Act 1994. The Coal Authority is responsible for the leasing and licensing of mining operations. All other minerals are privately owned (albeit that all gold and silver is owned by the Crown Estate).
Planning permission is required for mining developments generally. Mineral Planning Authorities (MPA) are responsible for granting planning applications. English county councils regulate mineral planning issues, with some areas in England split into separate districts and counties. Unitary authorities undertake mineral planning within their own jurisdictions in Scotland, Wales and Northern Ireland.
What are the principal laws that regulate the mining industry? What are the principal regulatory bodies that administer those laws? Were there any major amendments in the past year?
The main legislation regulating mining in the United Kingdom is contained within the Mines and Quarries Act 1954. The principal legislation that covers health and safety within UK mining is covered by the Mining Regulations 2014 (MR14), which became legally enforceable on 6 April 2015.
The Health and Safety Executive (HSE) administers health and safety regulations in the United Kingdom. The European Agency for Safety and Health at Work states that ‘broadly, HSE enforces health and safety law in industrial workplaces and over 400 local authorities enforce in commercial workplaces’. The Mines and Quarries Act 1954 covers a broad range of aspects including management issues, health and safety, and how to deal with abandoned and disused mines, among other issues. Minerals owned by the state are overseen by the Crown Estate and the Marine Management Organisation. While the United Kingdom is still a member of the European Union (until March 2019), EU legislation regarding the regulation of mines will also apply. Coal mining is regulated by the Coal Authority.
MR14 covers such things as ‘the use of electricity in mines’, ‘escape and rescue from mines’, and the ‘management and administration of safety and health in mines’, among other factors. MR14 also operates in correlation with the following piece of related legislation:
- the Health and Safety at Work Act 1974;
- Explosives Regulations 2014;
- Control of Substances Hazardous to Health Regulations 2002;
- Dangerous Substances and Explosives Atmospheres Regulations 2002;
- Management of Health and Safety at Work Regulations 1999; and
- Provision and Use of Work Equipment Regulations 1998.
As a result of Brexit, EU Regulations will continue to be in force as a result of section 3 of the European Union (Withdrawal) Act 2018, in the form in force immediately prior to departure. In some cases, the United Kingdom may immediately replace EU Regulations with new domestic laws.
Based on the position stated on the HSE website, health and safety protections and duties are unlikely to change with Brexit. While minor amendments have been made to the regulations to remove EU references, the legal requirements remain the same (see question 39).
What classification system does the mining industry use for reporting mineral resources and mineral reserves?
As is the case across the 28 EU member states, for securities listed in the United Kingdom any of the seven codes below provide an acceptable standard:
- the Australian Joint Ore Reserves Committee (JORC) Code;
- the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards;
- the Pan-European Reserves and Resources Reporting Committee (PERC);
- the South African Code for the Reporting of Mineral Resources and Mineral Reserves (SAMREC);
- the Certification Code for Exploration Prospects, Mineral Resources and Ore Reserves - Chile;
- the Public Reporting of Exploration Results, Mineral Resources and Mineral Reserves (NAEN) Code - Russia; and
- Society for Mining, Metallurgy and Exploration (SME) Guidelines - United States.
Mining rights and title
State control over mining rights
To what extent does the state control mining rights in your jurisdiction? Can those rights be granted to private parties and to what extent will they have title to minerals in the ground? Are there large areas where the mining rights are held privately or which belong to the owner of the surface rights? Is there a separate legal regime or process for third parties to obtain mining rights in those areas?
In the United Kingdom, the ownership of oil, gas, gold and silver is held by the Crown Estate. Exploitation of these resources is overseen and run by the Crown Estate. The ownership and licensing of unworked coal and coal mines in the United Kingdom is managed by the Coal Authority. All other minerals are within private ownership.
The rights to gold and silver are owned by the Crown Estate, which licenses mining rights to private parties via the Crown Estate Mineral Agent, Wardell Armstrong. The landowner must, in addition, grant rights of access and exploration to any private parties that wish to mine state-owned resources.
Apart from fuel minerals, coal, silver and gold, all other mineral resources within the United Kingdom are privately owned. There is no national licensing system relating to these resources, although a local mineral planning authority must still grant planning permission. A different process applies in Northern Ireland.
Publicly available information and data
What information and data are publicly available to private parties that wish to engage in exploration and other mining activities? Is there an agency which collects mineral assessment reports from private parties? Must private parties file mineral assessment reports? Does the agency or the government conduct geoscience surveys, which become part of the database? Is the database available online?
Information can be found on the British Geological Survey’s Mining website.
The British Geological Survey 2014 produces the ‘Industrial Minerals Assessment Unit’, which records the mineral distribution and composition across the United Kingdom. The Mineral Reconnaissance Programme reports provide ‘geological, geochemical, geophysical, mineralogical and metallogenic information on prospective areas in Britain. Work was carried out at various scales, from regional reconnaissance surveys or appraisal, to the drilling of a geochemical or geophysical anomaly’. The British Geological Survey website also contains information about potential further exploration and extraction of gemstones, gold deposits, etc, based on previous investigations and collated mineral deposit models. There is no general obligation on private parties to file mineral assessment reports.
Acquisition of rights by private parties
What mining rights may private parties acquire? How are these acquired? What obligations does the rights holder have? If exploration or reconnaissance licences are granted, does such tenure give the holder an automatic or preferential right to acquire a mining licence? What are the requirements to convert to a mining licence?
All minerals are owned privately, apart from fuel-minerals, silver and gold which are owned by the Crown and coal, which is owned by the Coal Authority (for more information see question 8). There is no country-wide extraction and exploration licensing procedure within privately owned areas of resources. In order to extract, planning permission is necessary from a mineral planning authority.
The Crown Estate owns all gold and silver in the United Kingdom in mines termed ‘Mines Royal’. In the jurisdiction of Scotland today, a private mining party would have to consult the Crown Agent, Wardell Armstrong, who is legally entitled to grant licences to prospective private parties wishing to mine the aforementioned precious metals. Such applicants must satisfy CEMA of their financial and technical standing and their ability to manage exploration through to completion and will be required to obtain all other necessary permissions for their activities. In the case of England and Wales, Wardell Armstrong should be consulted, although the Crown Estate may sometimes grant a lease of Mines Royal within a specific area directly. In either case, rights of access to the relevant land will also be required from the landowner.
In Northern Ireland, precious metals such as gold and silver belong to the Crown Estate Commissioners (CEC). An application is made to both CEC and the Department for the Economy Northern Ireland (DfENI) to explore these. Once DfENI has issued a licence, CEC will normally issue a licence. A separate licence is required for prospecting from DfENI.
All licensees must obtain local planning permission in addition to the licence.
For coal, a statutory licence is required for certain mining operations, including for the ‘winning, working and getting’ coal by surface or underground methods, and for the treatment of coal in the strata. Additionally, an operator would also need a proprietary interest in the coal, planning permission and any other required surface rights. The Coal Authority has published model licences and leases, as well as applications for surface and underground mining.
A conditional licence and an option for lease of coal can also be granted by the Coal Authority, based on the operator meeting certain requirements (eg, obtaining planning consent).
Renewal and transfer of mineral licences
What is the regime for the renewal and transfer of mineral licences?
In relation to gold and silver, the Crown Estate will grant an exclusive option-to-lease, which will normally cover an area up to 250km2. The option may be granted for up to six years with an option fee to be paid per annum.
When options are granted for long periods, the exploration company can progress automatically from one option stage to the next provided a progress report is submitted at least eight weeks before the end of each stage. The Crown Estate must be satisfied that the applicant meets the application and renewal criteria and that there is no competing application for the same area. The entity seeking application or renewal must submit certain information to the Crown Estate, including its previous mineral exploration activity, exploration programme, key personnel and its cash flow forecast.
Where there is a competing application, this will be reviewed by the Crown Estate and the area will be awarded to the most suitable applicant. A formal statutory process will generally be required to transfer the licence to a new entity.
Other non-fuel mineral rights go with the land, so when the owner of the surface land sells the freehold estate, the purchaser will inherit full title including any non-fuel minerals (except gold and silver). Such rights can also be transferred by way of deed or lease. Planning consents authorising such mining activities will run with the land. The transfer and renewal of leases and access rights granted by the owner of the surface land will generally be governed by private agreement between the parties.
Duration of mining rights
What is the typical duration of mining rights?
The option-to-lease granted by the Crown Estate may be granted for up to six years depending on the proposals in the application, funding and the experience of the company making the application. Options for longer periods are generally structured in three two yearly stages. There is no clear guidance from the Crown Estate regarding cancellation. As is the case with planning permission, any lease granted by the Crown Estate will involve conditions, any material breach of these could lead to the lease being cancelled or revoked.
There is no typical duration of planning permission granted in connection with the mining of other mineral rights. As noted planning permission will be required and this will always include conditions, these conditions will determine the life of the planning permission by imposing a time limit. Any breaches of these conditions may result in the permission being cancelled or revoked. Duration will also be affected by the length of the mining lease (or licence) the surface owner is willing to grant.
Acquisition by domestic parties versus acquisition by foreign parties
Is there any distinction in law or practice between the mining rights that may be acquired by domestic parties and those that may be acquired by foreign parties?
There are no rules particular to the mining sector governing foreign ownership of UK mining assets.
Protection of mining rights
How are mining rights protected? Are foreign arbitration awards in respect of domestic mining disputes freely enforceable in your jurisdiction?
Mining rights are protected via the Land Registry, an administrative body responsible for maintaining records of land ownership and proprietary interests in land such as mortgages and licences. Disputes arising out of ownership are dealt with by the Land Registration division of the Property Chamber, an administrative tribunal. The Property Chamber is totally independent of the Land Registry. Appeals from the Property Chamber are dealt with in the independent judicial system by the Upper Tribunal (Land Chambers).
As a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention), courts in England and Wales will recognise and enforce foreign arbitration decisions within the meaning of Part III of the Arbitration Act 1996.
What types of surface rights may mining rights holders request and acquire? How are these rights acquired? Can surface rights holders oppose these requests?
Mining rights for exploration and extraction of gold and silver are held by the Crown Estate. The mining company can apply for a licence to mine these metals from Wardell Armstrong. While there is no standard form to apply, the application must contain a programme of proposed works and financial and technical details related to the applicant. The licence does not confer any rights of access to land, instead, this will be a separate access agreement with the owner of the surface land.
For all other non-fuel minerals, two main rights are required to use the surface land for mining activities. First, planning permission, which in England and Wales this is granted by the Mineral Planning Authority (being the planning authority with responsibility for the control of minerals development, typically the county council). In Scotland, mineral planning permissions are granted by the local planning authority and in Northern Ireland it is dealt with centrally by the strategic planning unit. The United Kingdom operates a plan-led system; therefore, permission is granted in relation to the minerals development plan for that area. This will involve a public consultation process under which an environmental impact assessment will be conducted. Second, the mining company will need to negotiate appropriate land access rights.
Participation of government and state agencies
Does the government or do state agencies have the right to participate in mining projects? Is there a local listing requirement for the project company?
No government or state agency has an automatic right to participate in mining projects and there is no local listing requirement for the project company.
Government expropriation of licences
Are there provisions in law dealing with government expropriation of licences? What are the compensation provisions?
While uncommon, authorities may acquire mines and minerals by compulsory acquisition if empowered to do so under a relevant statute (eg, the Application of Land Act 1981). Where the mines and minerals belong to the same vendor as the surface, the purchase of mines and minerals is merely part of the purchase of the whole of the land. Compulsory acquisition of land for the purpose of mining and extraction is also available if expedient in the national interest. Compensation is generally available for those who have suffered as a result of the compulsory acquisition and is generally dealt with in accordance with the relevant provisions of the Act granting the authority the power.
Planning permission is required for any mining activity. The Town and Country Planning Act 1990 (TCPA 1990) contains revocation provisions if it appears to the local planning authority to be expedient to do so. Compensation is available, and a claim can be made through TCPA 1990 to the local planning authority to recover incurred expenditure and loss or damage directly attributable to the revocation.
Are any areas designated as protected areas within your jurisdiction and which are off-limits or specially regulated?
Land searches can be conducted in advance of applying for planning permission to conduct mining activities. This will reveal general information about the area and whether the relevant local authority or county council has made any declarations as to whether the land is subject to any conservation status. For example, if it is a national heritage site, a site of special scientific interest, national park, conservation area or subject to a tree preservation order. Although planning permission will be harder to obtain in this event, it is still achievable as evidenced by recent consents to construct a potash mine on (or more accurately under) the North Yorkshire moors.
Duties, royalties and taxes
Duties, royalties and taxes payable by private parties
What duties, royalties and taxes are payable by private parties carrying on mining activities? Are these revenue-based or profit-based?
The profits arising out of land used for mining activities are generally subject to the usual corporate income tax regime. No royalties (unless specified in the agreement with the landowner) are generally payable in the conduct of mining activities.
Stamp Duty Land Tax (SDLT) is payable on leases of mining rights. In the absence of exclusive possession, the lease may be deemed a licence (which is outside the scope of SDLT).
On the basis that a trade has commenced, the lessor of the mineral right may receive rent which should be taxed accordingly as part of that party’s income. Conversely, the lessee paying rent will usually treat this as a normal business expense.
Tax advantages and incentives
What tax advantages and incentives are available to private parties carrying on mining activities?
There is no special tax regime in place for private parties carrying on metallic mining activities in the United Kingdom.
Does any legislation provide for tax stabilisation or are there tax stabilisation agreements in force?
There is generally no concept of tax stabilisation in the United Kingdom in relation to the mining industry.
Is the government entitled to a carried interest, or a free carried interest in mining projects?
There is no state carried interest entitlement in the United Kingdom.
Transfer taxes and capital gains
Are there any transfer taxes or capital gains imposed regarding the transfer of licences?
There are generally no transfer taxes payable (save where a right in land is being transferred as opposed a right to extract from land), but there could be capital gains charges, based on the acquisition value of the licence and the transfer value, to the extent that the licence is owned by a UK company. If the transfer is to a connected party, the market value rule would apply.
Distinction between domestic parties and foreign parties
Is there any distinction between the duties, royalties and taxes payable by domestic parties and those payable by foreign parties?
There is no distinction. Duties, royalties and licences in the extractive industry are generally taxed according to the location of the resource, not the location or nationality of the parties involved.
Principal business structures
What are the principal business structures used by private parties carrying on mining activities?
The United Kingdom allows private parties significant flexibility in choosing business structures to carry on mining activities. The most common business form for mining is a company, typically one with liability limited by shares.
Local entity requirement
Is there a requirement that a local entity be a party to the transaction?
There are no requirements that UK persons be party to a mining transaction in the United Kingdom.
Bilateral investment and tax treaties
Are there jurisdictions with favourable bilateral investment treaties or tax treaties with your jurisdiction through which foreign entities will commonly structure their operations in your jurisdiction?
There are a number of bilateral and multilateral investment treaties with other states which the United Kingdom has ratified. These treaties provide protections to foreign investors that may be operating in the United Kingdom. As such, they are governed by public international law and provide companies with protections that are independent from any protections afforded by domestic laws and contractual relationships. Currently, in the United Kingdom, there are a total of 150 treaties in force. For further information, a list of the relevant treaties can be found via the United Nations (UN) Conference on Trade and Development website.
Principal sources of financing
What are the principal sources of financing available to private parties carrying on mining activities? What role does the domestic public securities market play in financing the mining industry?
The main sources of financing available to private parties carrying on mining activities are equity (either via a public offering or from a private or state-owned investor), debt (including convertible bonds, corporate bonds, senior loan facilities, project finance and asset finance) and alternative funding via royalty or streaming financing.
Private investors in mining companies range from state-backed entities (such as sovereign wealth funds) to corporates looking to guarantee their supply of certain commodities. Despite uncertainties in the world’s financial markets over the past decade, equity and debt financing retain the lion’s share of the mining finance market, but royalty and streaming financing are becoming increasingly common alternatives as equity values remain depressed. Royalty financing involves investors receiving a percentage of the mining company’s revenue, while streaming financing typically involves an investor making an upfront payment in exchange for the right to purchase a fixed percentage of the mining company’s future production, with ongoing payments made by the investor for each unit subsequently delivered pursuant to the streaming agreement.
The UK public securities market plays a significant role in financing the mining industry. The London Stock Exchange (LSE) is one of the largest international markets in the world and provides cost efficient access to a large pool of international equity. The Main Market is the LSE’s flagship market for larger, more established companies and is home to some of the world’s best-known companies. The LSE’s other market, AIM, is known for its balanced approach to regulation and is well suited to smaller, growing companies.
Direct financing from government or major pension funds
Does the government, its agencies or major pension funds provide direct financing to mining projects?
Government funding is not generally available for mining projects.
Please describe the regime for taking security over mining interests.
The regime for taking security over mining interests depends on the specific land interest held. For example, if the mining interest arises by virtue of being proprietor to the land, and the required planning consents are possessed, the interest in the land can be mortgaged in the usual manner.
If the mining interest arises by virtue of a licence, lease or permit they will be mortgageable provided the licence, lease or permit consists of a mortgageable interest. To determine if there are any restrictions in this regard, terms of specific instruments should be consulted.
What restrictions are imposed on the importation of machinery and equipment or services required in connection with exploration and extraction?
As a general rule, no restrictions apply to the import of mining equipment or machinery on a domestic level. As a member of the EU single market (at the date of writing), the United Kingdom is unable to introduce import controls on a national level, subject to limited exceptions that include the grounds of security and public health considerations. The United Kingdom’s open general import licence (OGIL) as a general principle allows the import of all goods into the United Kingdom. However, this is subject to certain restrictions imposed on particular classes of industrial goods (including military, firearms and chemicals), as well as goods from particular geographical regions or areas, such as those subject to sanctions. Of these restricted goods, some are restricted outright, and some are subject to a licensing obligation.
Restrictions are also dictated by national or supra-national (including European Union) policy and should be reviewed prior to importing goods, in particular chemicals or goods from countries subject to sanctions or trade embargoes, including Belarus, Crimea, Iran, Libya, North Korea, Russia and Syria. Attention should also be paid to any munitions or technology (including software and technology) imported that may have a military application, even if that is not the reasons for it being imported.
Other goods may be subject to quotas or surveillance as a result of EU trade defence measures (eg, antidumping, antisubsidy and safeguarding measures). These should be reviewed prior to importing goods potentially falling within scope.
In addition to the restrictions above, a number of other government agencies impose restrictions relating to individual classes of goods. Particularly relevant to the mining industry will be restrictions imposed on the following:
- chemicals - the ‘CLP Regulation’ (European Regulation (EC) No. 1272/2008 on classification, labelling and packaging of substances and mixtures) imposes requirements on suppliers and importers in relation to classification, labelling and packaging of chemicals;
- registration, evaluation, authorisation and restriction of chemicals (REACH) legislation requires registration of certain chemicals, or finished products containing certain chemicals (based on HSE guidance, published December 2018, the REACH regime will continue to apply to the United Kingdom following Brexit);
- vehicles - while a licence is not required, an importer must ensure a vehicle is registered and have a valid road tax licence before if driven on public roads;
- wood and wood packaging - certain requirements and restrictions are imposed by the Forestry Commission; and
- radioactive substances - a permit from the Environment Agency may be required.
Standard conditions and agreements
Which standard conditions and agreements covering equipment supplies are used in your jurisdiction?
All major supply companies are likely to have their own bespoke standard terms that they will aim to operate on. The potential to negotiate away from these templates is likely to vary according to the bargaining powers of the parties. Note that in a number of cases, the level of specialisation that a supply company may have means very limited or no competition with other supply companies; in these situations, there will be limited scope to negotiate.
For heavy machinery, the Institution of Mechanical Engineers also has certain model form contracts that may be used. In particular, MF/2 is the model form contract for supply of electrical, electronic or mechanical plant.
On major construction projects, International Federation of Consulting Engineers-based contracts are not uncommon.
What restrictions are imposed on the processing, export or sale of minerals? Are there any export quotas, licensing or other mechanisms that prevent producers from freely exporting their production?
Generally, the only restrictions imposed on the processing, export or sale of minerals derive from the relevant mineral being listed on an export control list, which are consolidated into the UK Strategic Export Controls List. This means that a licence is required from the relevant government authority (typically the Export Control Joint Unit). Broadly, this restricts the export of military items, or dual-use items that can be used for military purposes as well as their primary civil purpose, in addition to certain technologies, radioactive substances and other chemicals, and materials that may be used for torture. Whether or not a licence is granted will be dictated by the nature, destination and intended use of the goods, or whether the exporter is engaged in a licensable trade activity.
Exports may also be restricted under EU sanctions regimes. Any proposed exports to a destination subject to EU sanctions should be reviewed against the sanctions’ restrictions relevant to that destination.
Import of funds restrictions
What restrictions are imposed on the import of funds for exploration and extraction or the use of the proceeds from the export or sale of minerals?
There are no restrictions on importing or exporting funds, and there is no UK foreign exchange control. Note, however, that any tax implications, and relevant money laundering regulations, should also be considered.
Principal applicable environmental laws
What are the principal environmental laws applicable to the mining industry? What are the principal regulatory bodies that administer those laws?
The mining industry is regulated by independent government regulators, in particular the Environment Agency. Key legislation includes:
- the Environmental Permitting (England and Wales) Regulations 2010, which implements Directive 2006/21/EC1 of the European Parliament and the Council on the management of waste from extractive industries (the ‘Mining Waste Directive’);
- the Environmental Protection Act 1990;
- the Wildlife and Countryside Act 1981; and
- the Natural Environment and Rural Communities Act 2006 (in England and Wales).
Regulation can also be devolved further, to local authorities or Natural England. Additionally, specific localised policies may also apply to a particular area, including from the Conservation of Habitats and Species Regulations 2010, the Wildlife and Countryside Act 1981 and the Water Environment (Water Framework Directive) (England and Wales) Regulations 2003. A number of these implement European Union or national policies, applying in certain environments or contexts.
It is important to also consider common law obligations, including general principles of nuisance, which may impact, for example, how much noise, vibration or pollution mining operations (and ancillary) activities can make.
The above will be subject to Brexit as much of the United Kingdom’s environmental laws and policies are based on EU laws. As a general overview, the United Kingdom will remain a full member until the date that it formally exits the European Union (currently set for 31 October 2019), meaning it will remain bound by all EU Directives and Regulations until the exit date. Following Brexit, many EU Regulations and national-law implementing directives will remain in effect. However, EU Directives will no longer have to apply to the United Kingdom and while any UK implementing legislation would remain in effect, the United Kingdom would have greater scope to amend this legislation because it would no longer be bound by the Directive. The United Kingdom will also no longer be bound by the decisions of the Court of Justice of the European Union.
EU Regulations will (broadly speaking) continue to be in force as a result of section 3 of the European Union (Withdrawal) Act 2018, in the form in force immediately prior to departure. The government has powers to amend any retained EU legislation to deal with deficiencies arising out of Brexit (eg, change references of the European Union to references of the United Kingdom). In some cases, the United Kingdom may immediately replace EU Regulations with new domestic laws.
Currently, environmental decisions in the United Kingdom are overseen by the European Commission. However, in December 2018, the UK government set out a draft Environmental Bill (with a view to introduce a full Environmental Bill in 2019), which would introduce a statutory body, the office for Environmental Protection, to oversee environmental policy and implementation in the United Kingdom. The government has stated that the final bill will contain specific measures on environmental issues including:
- clean air;
- nature restoration and enhancement;
- resource efficiency; and
- waste management.
Environmental review and permitting process
What is the environmental review and permitting process for a mining project? How long does it normally take to obtain the necessary permits?
Planning policy in England is set by the Ministry of Housing, Communities and Local Government; this is then implemented and applied by local authorities responsible for making planning decisions. The main policies that these local authorities will follow is the National Planning Policy Framework. Specifically, the local authority responsible will be the Mineral Planning Authority.
As part of the general planning process, environmental requirements will likely be imposed under the terms of any planning permission granted by the Mineral Planning Authority. A Minerals and Waste Development Framework is required, and this will incorporate various environmental considerations. In particular, it is likely an environmental impact assessment - as required by EU policy - will be conducted as part of this. A strategic environmental assessment may also be required.
Given that the environmental planning process is integrated with the rest of the planning requirements, likely timings are interdependent on timings for the overall process. Generally, depending on the scale and scope of the project, this can be a long and complex process, requiring extensive public consultation and consultation with various entities. As such, the likely timetable can vary.
Closure and remediation process
What is the closure and remediation process for a mining project? What performance bonds, guarantees and other financial assurances are required?
There is no comprehensive and generally applicable framework. Rather, this is addressed through a combination of planning consents, and the relevant lease or licence terms. The Environment Agency monitors abandoned mines, and records those which are likely to cause environmental damage.
For mines closed after 1990, obligations to clean up contaminated land are imposed in certain circumstances through the Water Framework and the Environmental Protection Act 1990.
Restrictions on building tailings or waste dams
What are the restrictions for building tailings or waste dams?
Previous requirements imposed by the Mines and Quarries (Tips) Act 1969, the Mines and Quarries Act 1954, the Mines and Quarries (Tips) Regulations 1971 and the Quarries Regulations 1999 have largely been consolidated by the Mines Regulations 2014. Under this, there is an obligation to build tips (which is broadly defined) in such a way as to avoid instability or movement that could risk the health and safety of any person. This requires the mine operator to ensure that a competent person carries out an appraisal at appropriate intervals. If, following this, there is deemed to be a risk, a geotechnical specialist is required to carry out an assessment.
EU Regulations will (broadly speaking) continue to be in force as a result of section 3 of the European Union (Withdrawal) Act 2018, in the form in force immediately prior to the date of exit. The government has powers to amend retained EU legislation to deal with deficiencies arising out of Brexit (eg, change references of the European Union to references of the United Kingdom). In some cases, the United Kingdom may immediately replace EU Regulations with new domestic laws.
Health & safety, and labour issues
Principal health and safety, and labour laws
What are the principal health and safety, and labour laws applicable to the mining industry? What are the principal regulatory bodies that administer those laws?
The HSE is responsible for enforcing health and safety law, alongside local authorities. The primary health and safety legislation relating to mining is the Mines Regulations 2014.
Other more general health and safety legislation will also apply, including the Health and Safety at Work Act 1974 and the Management of Health and Safety at Work Regulations 1999. Additionally, employers have a common law duty of care to employees, which also impose health and safety requirements. General employment legislation including the Employment Rights Act 1996, the Working Time Regulations 1998 and the Equality Act 2010 will also apply.
Based on the position stated on the HSE website, health and safety protections and duties are unlikely to change with Brexit. While, minor amendments have been made to the regulations to remove EU references, the legal requirements remain the same, meaning that employers should continue to manage their business and employees, in a proportionate way to reduce health and safety risks.
Management and recycling of mining waste
What are the rules related to management and recycling of mining waste products? Who has title and the right to explore and exploit mining waste products in tailings ponds and waste piles?
The United Kingdom’s waste policy is derived from the EU Mining Waste Directive, which requires a waste management plan that addresses means of minimising waste generated, and the treatment, recovery and disposal of mine waste. An objective of this is the minimisation of environmental impact, which is likely to require the recycling, or at least infilling of any mined area, as far as is possible. Requirements will be determined on an individual basis.
A permit is required to operate a mining waste facility - this application will require a waste management plan, and, possibly, an environmental impact assessment. The rights will attach to whoever holds that permit, according to its terms. Note that a mining licence obtained for initial exploration and extraction may not automatically cover this - this must be reviewed on a case-by-case basis.
The impact of Brexit on the United Kingdom’s waste and recycling policies remains uncertain. However, following Brexit, EU Directives will no longer apply to the United Kingdom and while any UK implementing legislation would remain in effect, the United Kingdom would have greater scope to amend this legislation because it would no longer be bound by the Directive. The United Kingdom will also no longer be bound by the decisions of the Court of Justice of the European Union or subject to the oversight of the European Commission.
In December 2018, the UK government published a draft Environment (Principles and Governance) Bill setting out the government’s principles of green governance. The government is due to introduce a final Environment Bill in 2019, which is to contain specific measures on environmental issues including the United Kingdom’s position on waste management (see question 35).
Use of domestic and foreign employees
What restrictions and limitations are imposed on the use of domestic and foreign employees in connection with mining activities?
United Kingdom law does not impose specific restrictions or limitations on the use of domestic or foreign employees in connection with mining activities. However, general UK immigration laws may be applicable to foreign employees where they may qualify for a Tier 2 (General) work visa to work at mining operations in the United Kingdom if the employment is for a skilled job. The visa will only be valid for a maximum of six years.
Social and community issues
Community engagement and CSR
What are the principal community engagement or CSR laws applicable to the mining industry? What are the principal regulatory bodies that administer those laws?
Corporate social responsibility (CSR) initiatives are covered by general provisions applicable to companies as found within the Companies Act 2006. While companies must adhere to these general provisions they have also adopted their own CSR policy as they view complying with CSR guidelines as a ‘commercial necessity’. Both the government and independent associations publish these guidelines to urge companies to observe best practices (eg, the Association of British Insurers publishes guidance on CSR-related issues for companies and investors and the government sponsors a CSR website).
Specifically, the mining industry is subject to transparency and disclosure requirements under the UK Reports on Payments to Governments Regulations 2014 and EU Directive 2014/95/EU. The directive, implemented by the Companies, Partnerships and Groups (Accounts and Non-Financial Reporting) Regulations 2016, requires certain listed companies listed to disclose relevant environmental and social information in the management report, with the first reports to be published in 2018. The United Kingdom will also have to implement a new EU regulation on conflict minerals, which is for importers of tungsten, tantalum, tin and gold to ensure that their business does not contribute to armed conflict.
The above is subject to Brexit. Generally speaking, the United Kingdom will no longer be bound by EU Directives following Brexit. However, any UK implementing legislation would remain in effect (although this could be amended with greater flexibility as the directive would no longer be binding).
EU Regulations will continue to be in force as a result of section 3 of the European Union (Withdrawal) Act 2018, in the form in force immediately prior to departure. In some cases, the United Kingdom may immediately replace EU Regulations with new domestic laws.
Rights of aboriginal, indigenous or disadvantaged peoples
How do the rights of aboriginal, indigenous or currently or previously disadvantaged peoples affect the acquisition or exercise of mining rights?
There is no concept of native title in English law and thus no applicable rights of aboriginal or indigenous people. However, certain requirements designed to protect the Crown or government authorities may affect mining rights (see questions 6 and 10).
What international treaties, conventions or protocols relating to CSR issues are applicable in your jurisdiction?
The UN Global Compact is one of the CSR initiatives that the United Kingdom has adopted and encourages companies to sign up to. There is also international guidance that the United Kingdom encourages companies to adhere to, for example, the OECD Guidelines for Multinational Enterprises and the International Labour Organization’s Tripartite Declaration.
A number of other international treaties that cover CSR initiatives have been ratified by the United Kingdom, such as:
- the 2014 Protocol to the Forced Labour Convention;
- the International Covenant on Economic Social and Cultural Rights 1966; and
- the International Covenant on Civil and Political Rights 1966.
Anti-bribery and corrupt practices
Describe any local legislation governing anti-bribery and corrupt practices.
The primary legislation governing anti-bribery is the Bribery Act 2010. This criminalises offering, promising or giving of a bribe (active bribery) and the requesting, agreeing to receive or accepting of a bribe (passive bribery). It also covers offences related to commercial bribery. The only defence available to a company is that it had adequate bribery prevention procedures in place that were deliberately breached by a rogue individual or individuals.
Do companies in your country pay particular attention to any foreign legislation governing anti-bribery and foreign corrupt practices in your jurisdiction?
Multinational companies will often also seek to comply with the US Foreign Corrupt Practices Act, as well as local anti-bribery and corruption laws in other jurisdictions in which they operate.
The United Kingdom is a signatory to the UN Convention against Corruption and so companies are strongly advised to implement the convention procedures.
Disclosure of payments by resource companies
Has your jurisdiction enacted legislation or adopted international best practices regarding disclosure of payments by resource companies to government entities in accordance with the Extractive Industries Transparency Initiative (EITI) Standard?
The United Kingdom joined the EITI in 2014. As part of its commitment it has prepared a publicly available annual UK EITI Report that discloses information on company taxes and payments. The United Kingdom is also developing a publicly available register with information on who owns and controls companies, which is not an EITI requirement until 2020.
Foreign ownership restrictions
Are there any foreign ownership restrictions in your jurisdiction relevant to the mining industry?
There are no foreign ownership restrictions in the United Kingdom that are particular to the mining industry.
Applicable international treaties
What international treaties apply to the mining industry or an investment in the mining industry?
The United Kingdom has entered into at least 110 bilateral investment treaties with various countries. There are also at least 75 treaties to which the United Kingdom is a party with investment provisions (eg, Canada-EU Comprehensive and Economic Trade Agreement and Association of Southeast Asian Nations-EU Cooperation Agreement) and at least 30 investment-related instruments (eg, the New York Convention and the Agreement on Trade-Related Aspects of Intellectual Property Rights).
These treaties apply to investments in general rather than specifically to the mining industry.
The status of these treaties may change following Brexit. As a general overview, where the United Kingdom is a party in its own right, then it will continue to be a party to the relevant treaty. However, where the United Kingdom is a party by virtue of its membership of the European Union, the United Kingdom would need to negotiate its own agreement with the counterparty, which may not be identical to the existing treaty.