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Mineral Rights & Mining PDF Print E-mail
Written by Greg   

Mineral Rights are a sub-class of real property that defines who owns, controls, and sells extractable minerals from the subsurface earth underlying a parcel of land. In most cases, land owners purchase the mineral rights when they buy their parcel unless the mineral rights are excluded in the purchase-sale contract.

The value of mineral rights depends on the value of earth resources that lie underground and the costs required to extract the resources. Mineral rights transactions occur during the development of oil, gas, and coal deposits. For example, oil companies extract oil from underground oil fields which requires them to send royalty checks to the mineral rights owners whose property lies above those oil fields. Other minerals such as precious metals (gold, silver, copper), industrial metals (lithium and lead), and quarry stone offer land owners other sources of mineral rights royalty income.

To convert mineral rights into commercial materials the owner needs to mine, excavate, drill, and refine the raw materials. The huge costs and risks associated with mining activities prohibit land owners of small parcels from pursuing this land use opportunity. Therefore, this website will only discuss mineral rights as a transaction value within the Real Estate transactions section of this website.

Mineral rights owners can buy and sell their property rights without consideration of the parcel owner, however two parties can have land use conflicts just as neighbors conflict over a property line. The material rights owners and parcel owners can co-exist without impacting one another if the extraction methods have no impact on the parcel usage, such as oil and gas drilling when the oil derrick is located several miles away. However, if the mineral rights owner requires surface access to the property to extract the minerals, the access and land use damages of the extraction require both permission and fair compensation to the parcel owner. Since the mineral rights extraction depends on the cooperation of the parcel owner in many cases, the mineral rights and parcel owner rights are usually retained together.
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