Mines & Property Issues

Right to Open Mine

Planning permission is required for the development of land.  The opening of a mine will require planning permission. Questions arise in many cases as to whether mines have been continuously in use prior to the commencement of planning legislation, such as to be exempt from planning permission.  Special provisions in the 2010 Act deal with issues concerning quarries.

Apart from planning permission and other requirements required from the Minister, an owner in fee simple may work mines and dispose of their produce.

If the ownership of the surface is severed from ownership of the mine, the mine owner has the same absolute powers of leasing the space in which the minerals have been worked and exploiting the minerals. If the ownership of minerals only is severed, the owner of the minerals has no power to use the empty space except for the purpose of obtaining the remaining minerals.

Co-Owners

In the case of co-owned mines, each co-owner is entitled to enter and work provided he takes no more than a share and does not commit waste.  If he does so, he may be liable to account for his fellow owners.  He will be allowed the costs of taking the minerals.

If there has been an ouster, the person who is excluded may recover mesne profits.  In the case of disagreement, the courts may not be willing to appoint a receiver.

Co-owners of the land are not automatically partners whether or not they share the profits of mines.  Co-owners may set themselves up as partners in a mining business, without the mine necessarily becoming partnership property.

In the above cases, each partner may take part in working the mine as long as he works it properly and does not obstruct and interfere with the other.  He may seek an account against the others without dissolving the partnership.  A receiver may be appointed in the event of dissolution.

The co-owners may be partners in the mine and in which event the partnership law generally applies.  Each partner is entitled to take part in the working as long as he has regard to the rights of the other partners.  Each may bind the other in incurring debts in the course of the trade.  Partners are entitled to monies paid by him for the purpose of carrying on the business.

Limited Owners

The rights of limited owners are governed by the law of waste in the context of mines. Working new or on open mines is presumptively waste.  Working an existing mine is not a waste.  A tenant for life or a tenant or a term for a period of years is not automatically entitled to commit waste.  Express provision to the contrary might be made in the relevant instrument.

At common law, a limited owner may make a lease for no longer than the length of his own estate.  Under the Settled Lands Acts, a tenant for life or persons with such powers may grant mining leases. Lases of mines opened are renewed for a term not exceeding 100 years.  The court may enlarge its powers in certain circumstances.

The owner of severed minerals which have been improperly worked may bring an action for trespass or an action or an account of profits.  Limited owners and remaindermen will not be permitted to collude to circumvent restrictions against trustees who may take action to take the interest of persons with remainder interests and future interests which have not yet been ascertained.

If a lease grants the land with mines already in it and the land contains open and unopened mines, he may only work open mines unless there are no open mines.

Under the Settled Land Acts, a tenant for life is entitled to receive the profits of mines worked when the lease is made by the settlor, life tenant or trustees under powers. If the lease grants mines to a tenant, he may open new mines.

A limited owner who exceeds the power of working may escape liability if he has improved the land.  He may not, however, deliberately commit waste on the basis that improvement is his objective.

If minerals are improperly worked by a limited owner, their value belongs to the person entitled to the fee simple interest in possession.  If such persons do not yet exist, the proceeds are to be invested, and the income accumulated during the life of the wrongdoer and after his death is to be paid to the person entitled.

Mortgages and Trusts

A mortgagor may be prevented from committing waste if there is insufficient security.  A mortgagee in possession may work open mines. If security is insufficient, he may work new mines but not otherwise.

A mortgagee who opens new mines does so at his own risk and cannot draw any loss on the mortgagor.  Mortgagee in possession, whether or not security is sufficient, will be prevented from working mines wastefully or improperly.

Trustees may be granted power to make mining leases.  However, unless they have express authority, they are not entitled to do so.  Presumptively a trust for sale does not authorise the grant of a mining lease. A general power to lease does not authorise the grant of lease of an unopened mine.

Sale of Land

A contract for the sale of leasehold land includes mines and minerals under the land unless excluded expressly.  If land is taken compulsorily by a public authority,  mines are not acquired unless expressly purchased.

If a seller under a contract for the sale of freehold land has no title to mines and minerals, he may not enforce the contract even if he is willing to pay an offsetting compensation to the purchaser.  This is the case even if there is no evidence of any value in the minerals.  If a seller has no title to mines and minerals, a buyer may be entitled to compensation if the contract provides that errors are to be the subject of compensation.

A mining contract or contract for the sale of a mine does not imply any guarantee as to the existence or value of minerals.  It is a matter for the buyer to ascertain the extent of mines and minerals that are available.

The purchaser of land may have knowledge of the existence or value of minerals.  If he has wrongfully worked minerals under the land before purchasing he must disclose this.  Similarly, if he stands in a fiduciary position, he must disclose and cannot take advantage of it.

A court will not enforce a contract to sell minerals from a mine by specific performance.  This is because it is treated as the sale of goods and not of land.  For the same reason, breach will not be restrained by injunction.

Rights to mines and minerals are granted by deed.  In the absence of a reservation to the contrary the conveyance of land passes mines and minerals. However, if they have been previously severed, the title to them remains unaffected.

Land may be conveyed excepting and reserving the mines and minerals.  In this case, they remain the property of the grantor. The extent of the exception depends on the wording used.

Mining Lease

The general law of property applies to the creation of an interest in a mine.  Accordingly, a contract for the grant of such interest must be in writing, evidenced by the person entitled to grant such interest.  The interest itself must be granted by deed.

A mining lease coupled with a grant must be by deed.  A lease may be granted on the surface of the land or the minerals only or both.  A contract to work materials is sometimes referred to as a mining lease, although it is not a lease in the technical sense in many cases.  It is in effect a sale of part of the land at price payable by instalments by way of rent or royalty spread over a number of years in some cases.

Mines and minerals are usually described in a lease by reference to the surface above.  A plan may define the extent of the locus of the mines. Geological knowledge may inform what seams or veins are included in the demise.

Rights may be reserved in a mining lease for the protection of the surface.  These may include rights of support in addition to natural rights of support.

Lease Terms

Lease of mines and minerals, by implication, gives a right to take out the minerals.  However, the power goes no further than to do what is necessary for the convenient working of the mine and minerals.  If necessary to work the mine, the lessee may be impliedly authorised to bore through the land of the lessor not included in the demise in order to provide a shaft to reach them.

If a lease contains a covenant to work, the mine cannot be worked; otherwise, the lessee may be bound to sink shafts. Ultimately, it is a matter of interpretation of the document concerned.

In mining leases, it is usual to have both a fixed rent together with a royalty varying with reference to the minerals worked. A royalty in the context of mining leases is a payment proportionate to the value of minerals worked in the period.  It is in the nature of a rent.

Covenants in a mining lease may oblige the lessee to work the mine continuously.  If he fails to do so, he will be in breach in such an event.  Specific performance of a covenant to work cannot be granted as the court will otherwise be obliged to supervise the working of the mine.

The terms of mining leases follow the principles of land leases generally. There may be a covenant to work the mine in a particular manner.  There will usually be obligations in respect of repair and maintenance of the mining against incursion of water and damage.

There will usually be a provision for re-entry and forfeiture for breach of the covenants/terms of the lease.

Licence

There may be a license to work the mines and carry away minerals.   It may be on such terms as may be agreed.

A bare license grants no property in the minerals found.  It may be granted for test purposes.

A license under hand only may be enforceable and irrevocable if the licensee incurs expenses on faith, in reliance on it.