Mining rights in Alberta are typically obtained by entering into a lease with the provincial Crown or a freehold mineral rights owner. This article gives a brief overview of the process to obtain mining leases, as well as the ability to transfer and grant security over them.
Land ownership can be broken down into two categories: a surface rights owner and a mineral rights owner. A mineral rights owner owns all of the minerals granted by the mineral title on and under the subject property and has the right to explore for and recover those minerals, as long as they do so in a manner that does not significantly affect the surface owner's rights.
In Alberta, 81% of mineral rights are owned by the provincial Crown and the remaining 19% are owned by individuals, companies and the federal government. Mining rights can be obtained by either purchasing or leasing mineral rights from a mineral rights owner. However, transfers of the fee simple mineral title are a much less common method of acquiring mineral rights than leasing; this is particularly true since the Crown will not sell its mineral title.
There are two forms of mining interests typically granted by mineral owners: a lease of the minerals coupled with a grant (i.e., an in situ demise of the minerals coupled with a licence to mine and remove them) or a profit à prendre (i.e., the right to enter the land and mine and remove the minerals). Both types of interests are considered interests in land.
PROCESS OF OBTAINING MINING LEASES
Leases obtained from freehold mineral owners are the result of private negotiations. Provincial Crown mineral rights, however, are obtained through either a public offering or direct application process. The process will depend on the type of mineral being leased. Alberta Energy, the department responsible for leasing the Crown's mineral rights, keeps track of all Crown mineral dispositions and administers a separate process for each type of mineral (i.e., coal, metallic and industrial minerals, ammonite shell, oil sands, etc.). For example, metallic and industrial minerals are typically leased by first applying for a permit for mineral exploration rights, fulfilling the terms and conditions of such permit and then applying for a metallic and industrial minerals lease. The lease grants the lessee the exclusive right to develop and mine the metallic and industrial minerals in a specified location. However, a mineral surface lease granting approval to occupy the location and conduct mining activities is also required. Mineral surface leases can be obtained through the Alberta Sustainable Resource Development.
REGISTERING OF OBTAINING MINING LEASES
Pursuant to the provisions of the Alberta Land Titles Act, before any disposition of mines and minerals can be registered, the land titles office must conduct a mineral search and issue a mineral certificate. A mineral certificate verifies the proper ownership of the mines and minerals and it is only issued in conjunction with a disposition document, such as a transfer or a lease, which has been submitted to the land titles office.
The ability to grant security over, or transfer, a freehold mineral lease will be determined by the terms of the lease agreement. For Crown leases, the Alberta Mines and Minerals Act (the Act) states that a transfer may be made by a lessee if the transfer complies with the Alberta Crown Minerals Registration Regulation (the Regulation) and the transfer conveys the whole of the lease agreement, a specified undivided interest in the lease agreement or a part of the location contained in the lease agreement.
The Act and the Regulation also govern the registration of security interests against Crown mineral leases. The Act provides that a security notice in respect of a security interest may be submitted to the Minster for registration, with some restrictions (for example, security interests acquired before December 16, 1981 by a person other than a bank cannot be registered). The Regulation provides procedural rules for continuations and cancellations of registrations, as well as more general provisions providing that security notices must be in the prescribed form and executed in the proper manner.