Mining rights and title in United Kingdom

Mining rights and title

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.

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.

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).

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.

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.

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.

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.

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.

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.