Locating underground mineral deposits can unlock hidden value as farms look to diversify, but the process isn’t without its risks. Julie Liddle, a director of Robson & Liddle, explains more about what’s involved.
Tapping into the wealth beneath your feet
Mineral extraction may seem like an industry lost to the depths of time, but it is not without recent precedent. Mining for minerals saw a high-profile comeback in 2015 when the first metal mine to open in the UK for more than 40 years started operations on the edge of Dartmoor in Devon. The £130m Hemerdon tungsten mine will exploit the world’s fourth-largest deposit of the metal, delivering up to four per cent of global tungsten production.
Meanwhile, a £1.7bn potash mine – with potential to create more than 1,000 jobs – has been given permission to sink a mile-deep shaft under heavily protected moorland overlooking Whitby and Robin Hood’s Bay in North Yorkshire.
Working with an operator to identify opportunities
Clearly, farmers and landowners should be aware of legal, technical and regulatory issues before they start burrowing for subterranean riches. For example, the law around ‘severed title’ means owning land does not automatically translate into owning what lies beneath.
Title to minerals is something often claimed but not always with much to support the statement. What appears on many sales brochures as, ‘mines and minerals included, or, included insofar as they are owned,’ can mean very little is actually known, the claim being more in hope than expectation. Unless the property deeds expressly state mines/minerals to be included, and better still, the type of minerals present, then you may find things are not always as you had believed. Careful research is required but that is a whole chapter on its own so I don’t propose to expand on it here.
If the result of investigation both into the deeds and the type of mineral(s) present are encouraging, many landowners collaborate with a mining company to evaluate the commercial prospects and help with development costs, which can be substantial. The next step is to obtain a prospecting licence between the parties that enables borehole samples to be acquired and analysed.
This will give the landowner and mineral operator enough data to decide whether to agree terms for a minerals lease. If they proceed, the land can be promoted for inclusion in the Minerals Local Plan as an area for mineral extraction, and a planning application made to develop the site.
Why it’s important to prepare for long-term operations
Mineral mining is rarely a quick way to realise value and the process sometimes takes many years. It involves the operator extracting the mineral and then restoring the land to a pre-agreed condition set out in the terms of the planning consent.
If a quarry is developed on your land, ownership represents appealing long-term revenue from rentals and royalties. Just as importantly, when the quarrying operations eventually come to an end, the landowner can influence the restoration of the site, for example returning to agricultural use or pursuing another diversification enterprise. If you own the surface only, then your concern is the top and tail of the arrangement; accommodation works at commencement and restoration at the end are your only involvement but you still need to have suitable arrangements in place.
Weighing up the environmental and reputational concerns
Mineral mining on your land is not something to be entered into lightly as it can often put the landowner at odds with the local community over issues such as noise, traffic and property values.
Applying for permission to extract minerals on your land can also attract scrutiny from environmental campaign groups if the proposed methods of extraction are particularly controversial.
While the process will include measures to minimise environmental risks and restore the land after the minerals are taken out of the ground, it’s important to remember that you and your neighbours will still be living there long after the diggers have gone. Concerted effort will be required to consult and communicate your plans with the local community in order to maintain a relationship throughout the whole process.
For more information on mining for minerals on your farmland, call Julie on 01768 254 354