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Legal Risk Rating
49
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100
Score: 49
Substantial Risk
The modern mining code has found no place in the United Kingdom, which has held on to the archaic, yet rather quaint, notion of landowners maintaing their right to mine minerals, save, of course, for gold and silver (known as Royal Mines) which a court in 1568 (R. v. Earl of Northumberland) indicated rather presumptively belonged to the Queen (upon her application). In this regard, whilst the law of mining does not interfere with the miner, neither does it come to its aid in areas such as the licencing of competing mines, surface and access rights, and permitting. To say that the law is antiquated is an understatement when one must read the Royal Mines Act 1688 in order to fully appreciate a subtle aspect of mineral ownership in the country.

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Mining Overview Commentary plus sign

UNITED KINGDOM MINING REGULATION

GENERAL

During the 18th and 19th century, the United Kingdom’s (“UK”) economy grew rapidly due, in part, to the vast quantity and accessibility of important minerals; mining activity was often attributed as a significant factor in its industrial revolution. Today, however, exploration and mining activities are small in comparison with other sectors of the economy. In 2012, mining contributed £31.3 billion to the UK economy and £6.3 billion in exports; most of the production pertains to industrial minerals, such as coal, kaolin, potash and clays. The UK’s history of base and precious metal production is unlikely to ever return, albeit there is a mine under development in Plymouth that would see meaningful production of tungsten. Most of the iron ore, copper, gold and other resources remaining are uneconomic at current commodity prices. To date, the UK has not been ranked in either the Fraser Institute Policy Potential Index (2015) or the Behre Dolbear survey (2014).

PRINCIPAL LEGISLATION AND REGULATOR 

The primary legislation applicable to the UK is the Land Registration Act 2002 (“Land Act”) and the Coal Industry Act 1994 (“Coal Act”) both of which provide for the development of mineral resources and land use management. The UK does not have a single regulatory regime for mining and, with the exception of oil, gas, coal, gold and silver which are vested in the state (or the Crown Estate in the case of gold and silver), these minerals are vested with the landowner (s. 132(1)(c), Land Act). Generally, minerals are held in private ownership and may be found through a search of the Land Registry, as well as details of land surface ownership.

In relation to gold, silver and coal, the following applies:

 

  • Gold and silver – based on case law and statues dating from the 14th century, the Crown Estate (now administered for the benefit of the United Kingdom, rather than the monarchy) claims to hold the right to licence gold and silver mines. As a result, gold and silver mines are known as ‘Mines Royal’. The Crown Estate grants exclusive options to take a lease of 'Mines Royal' for a specific area. These options must be obtained from the Crown Estate Mineral Agent, currently Wardell Armstrong (the consulting firm). Exploration and access rights must be obtained from the relevant landowner.

 

  • Coal - pursuant to the Coal Act, ownership and control is vested in the Coal Authority (“Authority”), which regulates and issues mining titles (s. 2 Coal Act).

 

Other important legislation includes the Mineral Development Act (Northern Ireland) 1969 (“MDANI”), which vests mineral ownership in Northern Ireland with the Department of Enterprise, Trade and Investment (“DETI”), excepting gold and silver.

 GRANTS AND FORMS AND MINERAL TITLE

Types of licenses and mining grants available in the UK include:

  • Coal License (CL) - the Authority has the power to issue miners with coal licenses and transfer the proprietary interest in the coal from the Authority to the miner (ss. 25(2) and 26(1), Coal Act). When issuing a license, the Authority does not operate on a first-come / first-serve principle, but has a wide discretion to compare multiple applications (s. 26(5), Coal Act). A CL is issued subject to conditions and for a period that is deemed appropriate by the Authority (ss. 26(5), 27(2)(b), Coal Act). The Authority’s power to set conditions, and amend, revoke or modify conditions, is quite wide (ss. 28(1)-(9), Coal Act). A CL may be transferred or mortgaged if it contains the provision within the license (s. 27(5), Coal Act).

 

  • Gold and Silver (“Mines Royal Lease”) - the Crown Estate grants exclusive leases to companies via an application process. Each applicant must demonstrate that they possess the necessary skills/experience to undertake the mining activity, a costed work programme, and financial resources to demonstrate the ability to fund the project. The area subject to the lease is restricted to a maximum area of 250 km2. Each lease is for a period of one year and contains a provision for renewal, which is made to the Crown Estate which holds a wide discretion on whether to grant or refuse renewal. A charge of £5,000 per annum is payable for each lease, in addition to all legal and mineral agent’s fees. It is the holder’s responsibility to conclude separate agreements with landowners and to obtain all other consents and planning permissions for its activities.

 

With the exception of Northern Ireland, all other minerals generally belong to the landowner subject to any inclusions or exclusion on the title deed. Rather esoteric rights known as manorial rights (usually quarry rights reserved by the former Lord of the Manor) needed to be registered on title prior to October 2013 in order to be preserved against an innocent purchaser of title subsequent to such date; this has further bolstered the landowner’s title to minerals in most cases.

 There is no general licensing system for exploration or extraction of ‘other minerals’, although planning permissions and environmental consents must be in place in order to conduct the mining activity lawfully. Rights will need to be settled by agreement and may involve a sale, lease or option of mineral rights as in the case of surface rights. The lack of any generic mining law makes it extremely difficult for the miner to easily access, explore and develop mineral resources in the United Kingdom. The lack of such a regime inevitably leads to a stark division between brownfield and greenfield sites, where mining may be considered socially acceptable or unacceptable, respectively.

DEVELOPMENT CONSIDERATIONS

A miner must secure governmental permission for the proposed land use, which is governed by the Town and Country Planning Act, 1990 (“TCPA”). In applying for the planning permission, the miner will need to undertake a public consultation process, a key part of which will be an Environmental Impact Assessment ("EIA"). A developer will also need to consider land access rights, particularly where the mineral rights are held, but not the surface rights. Although surface rights may be expropriated under the Mines (Working facilities and Support) Act 1966, the Supreme Court will only approve expropriation if the grant is “expedient in the national interest”. Additionally, local planning authorities may also acquire land compulsorily for planning and development purposes (part IX, TCPA).

ENVIRONMENT REGULATION

See United Kingdom Environmental Regulation. 

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Environmental Overview Commentary plus sign

UNITED KINGDOM ENVIRONMENTAL REGULATION

GENERAL 

The United Kingdom (“UK”) is located off the north-western coast of continental Europe and has a total area of approximately 94,060 sq mi. It includes England, 1/6 of the island of Ireland (Northern Ireland), Wales and Scotland, including many small islands. It shares a 360 km international land boundary with the Republic of Ireland and is connected to France via a tunnel bored beneath the English Channel. The geography and climate of the UK varies. England consists of mostly lowland terrain with upland or mountainous terrain found in the northwest. Scotland is distinguished by the Highland Boundary Fault, which traverses the Scottish mainland and separates two distinctively different regions. Wales is mostly mountainous; and Ireland includes the Mourne Mountains and the Lough Neagh, the largest body of water in the UK. 

The ecology in the UK is somewhat impoverished compared to that of continental Europe. Since the mid eighteenth century, UK has gone through industrialisation and increasing urbanisation, resulting in over 100 species becoming extinct.

PRINCIPAL LEGISLATION AND REGULATOR

The primary legislation applicable to the UK is the Town and Country Planning Act 1990 (“TCPA”) and the Town and Country Planning (EIA) Regulations 2011 (“Regulation”). Both combine to provide the legal and institutional framework for mineral development and the sustainable management of the UK environment. In England and Wales, planning permission is granted by the mineral planning authority (“MPA”). In areas where there is a County Council, the MPA is the County itself, which grants planning permission for mineral working. In unitary areas, metropolitan districts and London boroughs, the local planning authority grants permission. In Scotland, the local planning authority grants mineral planning permissions and in Northern Ireland it is the strategic planning unit. If permission is refused, there is a right of appeal to the central Government (“Secretary of State”), which also has the power to recover jurisdiction of certain applications where it considers them to have more than local importance.

Other important legislative enactment include; the Land Registration Act 2002, the Coal Industry Act 1994 and the Planning and Compensation Act 1991.

EIA PROCESS

There are five stages to the EIA process in the UK: Staging, Scoping, EIA, Planning Application and Consultation, and Decision.

Mineral development is generally considered a ‘Schedule 2’ development, unless it concerns an open-cast mine where the surface of the site exceeds 25 hectares. A ‘Schedule 1’ project requires an assessment in every case; a ‘Schedule 2’ project requires the relevant authority to consider whether or not the impact on the environment will be significant (s. 4(6) and Schedule 3, Regulation).

The applicant must compile the information reasonably required to assess the likely significant environmental effects of the proposed mineral development and the totality of information compiled by the applicant is known as an “environmental statement” (ss. 15(1)-(5), Regulation). The environmental statement (and the application for mineral development) must be publicised. The statutory ‘Consultation Bodies’ and the public must be given the opportunity to give their views about the proposed mineral development and the environmental statement (ss. 16(1)-(2), Regulation)

The environmental statement, together with any other information that is relevant to the decision, and any representations made in respect of it, must be taken into account by the MPA and/or the Secretary of State in deciding whether or not to give consent for the mineral development. The public must be informed of the decision and the main reasons for it (ss. 24(1)-(3), Regulation). The MPA also has wide powers to modify, suspend, or cancel permissions once a mineral development project has been approved (s. 97, as well as Schedules 5 and 9, TCPA).

Since the right to mine hinges on the grant of an EIA and planning approval, the focus by the MPA is whether or not the planned development is an acceptable (and best) use of the land; the control of processes and emissions are subject to approval under pollution control regimes and are generally not part of the EIA process itself. One test that will be applied is whether or not the EIA provides appropriate mitigation and remedial provisions so as to ensure that the land is not classified as contaminated following the completion of mining. Of course, in areas of tranquillity, recreation or natural beauty, the miner is unlikely to obtain planning approval.

Other licensing, permits and permissions required to operate a mine will include: permits relating to surface water, groundwater and mining waste, which the Environment Agency is responsible for issuing; a licence for any extraction of coal granted by the Coal Authority, if applicable; and permission from landowner/s to access their land and conduct mining operations.

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