Unlike other jurisdictions, such as the US and Angola, the UK does not have a single mining / mineral code or legislative framework. Instead, different laws and regulations apply according to the mineral type and the nature of the activities being undertaken.
Main mineral rights
Oil & Gas
Ownership of oil & gas within the land area and territorial waters of the UK is vested in the Crown, i.e. the British monarchy. Licences from the Oil & Gas Authority – the authority responsible under the Petroleum Act 1998 for regulating offshore and onshore oil & gas operations, including exploration and production, licensing, and infrastructure – are required to explore and exploit all oil & gas resources. For offshore oil & gas operations, there are some differences to the permitting regime which, for example, requires operators to obtain permits from the UK Government department for Business, Energy & Industrial Strategy ("BEIS") for discharges of oil or chemicals. Consent from the BEIS is also required to commence hydraulic fracturing.
Coal
Ownership of almost all coal resides with the Coal Authority – the authority responsible under the Coal Industry Act 1994 for regulating the exploration and extraction of coal. Licences are required to explore and extract coal reserves, which must be obtained from the Coal Authority.
Gold & Silver
By virtue of the Crown Estate Act 1961, ownership of gold & silver is vested in the Crown. The mines of these metals are known as "Mines Royal". Exclusive options to take a lease of "Mines Royal" for specific areas must be obtained from the Crown Estate – an independent commercial business, created by an Act of UK Parliament, with a diverse portfolio of UK land – to explore and extract gold & silver reserves. This requires the entity to firstly request an option to explore from the Crown Estate. If the entity then wants to commercially exploit gold / silver, it must then convert that option into a lease.
Other minerals
Other minerals are largely in private ownership and so exploration and extraction rights must be obtained from the landowner directly.
Acquiring mineral rights
Acquiring entity qualifications
There are no requirements or restrictions as to the type of legal entity that can be granted reconnaissance, exploration and/or mining rights under UK law. That said, unincorporated entities cannot hold assets under UK law. For partnerships, this means that the ownership of assets, such as mineral rights, lies with the individuals comprising the partnership and not the partnership itself.
There are, however, restrictions on foreign entities looking to invest in and/or acquire entities that have already acquired reconnaissance, exploration and/or mining rights. Foreign entities looking to acquire entities that already hold such rights therefore have to check if they are in scope of, and thereby need to comply with, the Enterprise Act 2002 (as amended) (the "EA") and the National Security and Investment Act 2021 (and underlying regulations) (the "NS&I"). The EA and the NS&I require certain in-scope transactions to meet certain merger control thresholds and comply with certain notification requirements, respectively. For further information about the NS&I, read our legal update here.
Reconnaissance and exploration rights
As discussed in the "Main mineral rights" section above, the rights required for reconnaissance and exploration depend on the type of mineral. For state-owned minerals, such as oil & gas, coal and gold & silver, prospective licensees must comply with the licensing requirements and procedures are set by the relevant competent government authority or public body. The licensing requirements for oil & gas, coal and gold & silver are set out in model form documents on the Oil & Gas Authority, Coal Authority and Crown Estate websites, respectively.
Generally, prospective licensees must submit an application for an option, lease or license (as appropriate) to the relevant competent government authority or public body. Prospective licensees will be asked to submit information supporting their proposals, including, for example, information on the financial standing and experience of the applicant, the applicant's proposals for operation and post-completion restoration of the mine, and the timescales for progressing such proposals. The relevant competent government authority or public body will subsequently grant (or refuse the grant of) an option, lease or licence for a specified period of time and usually subject to certain conditions that the licensee will undertake to fulfil during the term of the grant.
For other privately-owned minerals, reconnaissance and exploration rights are determined by, and must be agreed with, the landowner directly.
Right to access land
Having the right to conduct reconnaissance or exploration works does not automatically grant licensees the right to access the land where the minerals are located. Such rights must be obtained directly from the landowner, generally in the form of a lease or license. Alternatively, the freehold title to the land could be acquired, if the licensees believe that is a more commercially viable option.
The lease or other document pursuant to which the licensee is granted access to the land will specify the obligations owed by the licensee to the landowner. These obligations typically include the payment of rent or royalties and the obligation to ensure adequate support for the land surface. Such land rights may also need to be registered with the UK Land Registry.
As an alternative to acquiring a lease or license to access the land, rights to access the land can be obtained using compulsory acquisition under the Mines (Working Facilities and Support) Act 1966. To acquire such rights, licensees must submit an application to the relevant UK government department, who will then instigate proceedings in the High Court. The High Court only grant such rights if can be proven that to do so would be "expedient in the national interest".
Planning Permission
In addition to acquiring the right to access the land, exploration works for both state-owned and privately-owned minerals often require planning permission, which needs to be obtained from a local authority that has responsibility for mineral planning, i.e. a Mineral Planning Authority ("MPA"). In some parts of the UK, the responsibility for mineral planning resides with unitary authorities, which deal with all planning issues within their areas. In those parts of the UK with two tiers of local government (i.e. counties and districts), MPAs are the county councils. National parks are also MPAs in certain parts of the UK.
Applications for planning permission require licensees to submit a range of documentation to the relevant MPA, including details of the development and how environmental factors have been considered, for example. If the relevant MPA grants planning permission, it is likely to be subject to a number of conditions, such as a requirement to conduct an environmental impact assessment and to adopt measures to control restoration and aftercare post completion of the works (see the "Environmental compliance and restoration" section below for further details).
Extraction rights
Once operators have acquired reconnaissance and exploration rights, the right to access the land and planning permission, they will also need to obtain extraction rights. This requires the operator to obtain a production-type license from the owner of the mineral resource, which may be a relevant competent government authority, public body or private landowner depending on the mineral type (as discussed in the "Main mineral rights" section above).
Transferring mineral rights
If operators hold mineral rights through licences granted by competent government authorities or public bodies, operators will have to follow a formal statutory process if they wish to transfer their licenses to a new entity.
If operators hold mineral rights through deals agreed with private landowners, whether a transfer is possible or not will be determined by the underling contract.
Planning permission tends to be awarded for the specific land area where the mining activities are carried out and so does not need to be transferred.
The transfer of operational permits, such as environmental permits (as discussed in the "Environmental permitting" sub-section below) is governed by specific statutory rules that vary depending on the nature of the activity.
Environmental compliance and restoration
Environmental permitting
The Environmental Permitting (England and Wales) Regulations 2016 (the "EPR") require operators to obtain a permit to crush, grind or reduce minerals, unless certain exceptions apply, such as where the crushing, grinding or reducing of the minerals is unlikely to result in the release of matter into the air or ground. The EPR also require operators to obtain a permit to manage extractive waste and discharge pollutants. These permits can be obtained from the Environment Agency and/or the MPA.
UK conservation law may also require operators to obtain a license to undertake activities if their activities are likely to disturb certain species and/or habitats protected under legislation such as includes the Wildlife and Countryside Act 1981, the Conservation of Habitats and Species Regulations 2017, the Protection of Badgers Act 1992 and the Offshore Marine Conservation (Natural Habitats, &c.) Regulations 2007.
Environmental impact assessment
As discussed in the "Planning Permission" section above, planning permission is often granted on the condition that the applicant undertakes an environmental impact assessment.
For oil & gas operations, operators are also required to undertake geological studies and submit a Hydraulic Fracture Plan to the Oil & Gas Authority and the Environment Agency. The Hydraulic Fracture Plan should outline how the operator proposes to control and monitor the fracturing process and assess the risk of induced seismic activity, for example.
Restoration
As discussed in the "Planning Permission" sub-section above, planning permission is often granted on the condition that the operator undertakes restorative works post completion of the mining works.
For coal operations, the Coal Mining Authority can also impose requirements for forms of restorative works to be completed.
Health & Safety compliance
The Mines Regulations 2014 and the Quarries Regulations 1999 constitute the primary legislation governing health & safety in the context of mining operations. The legislation governing health & safety in the workplace more generally also applies to mining operations. The principal legislation governing health & safety in the workplace is the Health and Safety at Work etc. Act 1974, which has several sets of regulations under it (e.g. the Management of Health and Safety at Work Regulations 1999) that govern individual aspects of worker health & safety, such as handling work equipment, hazardous substances and explosives, and managing the risk of incidents.
The entity in day-to-day control of safety will most likely be the entity acting as the mine "operator", which is the person with overall control of the operation of the mine. Where this is a different entity from the mine owner, the mine owner is responsible for appointing an operator that has sufficient resources to be able to operate the quarry safely and to exercise a degree of continuing oversight of health & safety management.
Operators have a number of duties under the Mines Regulations 2014, the Quarries Regulations 1999 and the Health and Safety at Work etc. Act 1974 (and underlying regulations) including (but not limited to):
- an obligation to build tips in such a way as to avoid instability or movement that could risk the health & safety of any person;
- an obligation to have a written health & safety policy which is to be brought to the notice of all workers; and
- a duty to take all steps reasonably possible to ensure the health, safety and wellbeing of workers.
The Health & Safety Executive is responsible for enforcing health & safety law and has a number of powers to enable it to do so, including (but not limited to) the ability to enter premises, examine mining operations, take samples, issue enforcement notices and initiate prosecutions.
Exporting minerals
Under UK law, there are no restrictions on exporting unprocessed minerals. There are, however, restrictions on exporting certain processed minerals. The UK registration, evaluation, authorisation and restriction of chemicals ("UK REACH") framework includes a Prior Informed Consent regime, which requires businesses exporting or importing listed chemicals from or to the UK to (among other things) notify exports to the Health and Safety Executive ("HSE"). The relevant listed chemicals under UK REACH can be found on the HSE website.
There are no specific tax or duties that apply to the export of mineral resources.
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