Does anyone have any experience with hard rock mineral rights/ownership? I’m trying to learn more about private mineral ownership for things like tin, graphite, coal, etc., but don’t know where to start. Is it anything like oil and gas mineral rights or a completely different beast? I’m used to the pretty well-defined world of oil and gas leases and not sure if there are similar contracts outside of oil and gas. Anything helps, but hopefully someone out there might actually own some interests and could add some detail around similarities or differences.
From what I remember, all minerals are minerals whether they are gold or coal or lithium. Minerals are minerals! Sorry can’t be more specific! Best of luck.
In Texas, coal rights stay with the surface rights. I have mineral rights on land that was once owned by my father-in-law but is now a coal mine. He was forced to sell when a power plant was built nearby. We receive a royalty check every month from a producing gas well on the property. We get nothing from the coal the mine produces.
A quick rule of thumb is if the surface is destroyed to retrieve the “mineral,” then the proceeds go to the landowner. The slower rule of thumb is to check prior deeds for mineral reservations that may have included specific references to items like coal, iron ore, etc.
The newest issue is about lithium extraction from saltwater produced from new wells explicitly drilled for the saltwater deposit. Water of all types generally belongs to the surface owner unless they were sold.
Interesting read on some old wells in southwest Arkansas. I just got some old wells, and Exxon is going to re-enter them for the lithium.
Jim, our family has had in our estate 12 sections of oil & gas & dry minerals rights. I am not schooled in geology but taking free courses on YouTube by Nick Zentner. And 60 years ago I had some encounters with land men & oil drillers for our great Uncle drilled for oil in Lander County, Nevada the 10 out of 15 wells ever drilled for oil in that county.
And recently I had to do a crash effort on learning dry mineral rights as opposed to oil & gas.
What I can as a civilian tell you is that oil & gas leasing has some similarities but mostly not.
Oil & gas rights can be legally separated from dry mineral rights from your holdings beneath the earth. And surface rights have their own laws & regulations of access, water rights, environmental concerns.
Dry rights composed of precious metal like gold & silver & other rare earth metals, lithium, uranium & can be singled out or specially designated in a lease on how it’s handled even the depth of drilling or mining.
And gravel & sand & other construction minerals? I have no idea about coal. I’m not familiar with practices & laws of any of these materials.
Oil & gas usually is a 5-year lease & with a 5-year option. There may be upfront money & an annual rent per acre payout, which is a modest amount because to stimulate exploration keeping cost down initially.
But where the big money is in the royalty of 1/8 to 1/4 of production paid usually monthly. But each lease varies according to negotiations & laws. But every lease has infinite variation thanks to lawyers & liberal state laws to collect taxes. Lol
Now gold & silver & other precious metal royalties are a much smaller percent 2% to 5% of what is extracted and smelted from the metal-bearing ore. It could be lithium or other rare earth metals or minerals. But each lease is negotiated & absolutely needs a lawyer and expert to judge whether the offer is fair & acceptable. These leases also have upfront cash & periodic payment as rent per acre. And so many variations of royalty types.
But coal & gravel, sand I am not familiar with & would not even pretend I know anything.
There are landsmen who manage your sale or leases for a fee, there are auction platforms to do on your own if you know what you are doing.
And title search companies, geology mining engineers & expert companies to tell you what your rights are valued at to determine if you are getting a good deal.
Good luck & I hope I did not overwhelm you. But the simple answer is Oil & Gas, Gold & Silver, Coal & Construction Materials are totally different & have distinct industry practices & laws to dealing with management of your rights & extraction of your assets.
1 Like
Thank you for sharing this information! I have continued to look for my mineral that my father left me and so far a lot of luck with some company helping me! The only one I have had a problem with is Exxon! They never want to return calls! So I have an estate lawyer that is doing their best to help, needless to say they have no idea of what is what. I had to do all the hunting of these royalties to get them, again thanks for sharing!
This topic was automatically closed after 90 days. New replies are no longer allowed.