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Mining rights in Alberta are typically obtained by entering into
a lease with the provincial Crown or a freehold mineral rights
owner. This article gives a brief overview of the process to obtain
mining leases, as well as the ability to transfer and grant
security over them.
Mining Rights
Land ownership can be broken down into two categories: a surface
rights owner and a mineral rights owner. A mineral rights owner
owns all of the minerals granted by the mineral title on and under
the subject property and has the right to explore for and recover
those minerals, as long as they do so in a manner that does not
significantly affect the surface owner's rights.
In Alberta, 81% of mineral rights are owned by the provincial
Crown and the remaining 19% are owned by individuals, companies and
the federal government. Mining rights can be obtained by either
purchasing or leasing mineral rights from a mineral rights owner.
However, transfers of the fee simple mineral title are a much less
common method of acquiring mineral rights than leasing; this is
particularly true since the Crown will not sell its mineral
title.
There are two forms of mining interests typically granted by
mineral owners: a lease of the minerals coupled with a grant (i.e.,
an in situ demise of the minerals coupled with a licence
to mine and remove them) or a profit à prendre
(i.e., the right to enter the land and mine and remove the
minerals). Both types of interests are considered interests in
land.
Process of Obtaining Mining Leases
Leases obtained from freehold mineral owners are the result of
private negotiations. Provincial Crown mineral rights, however, are
obtained through either a public offering or direct application
process. The process will depend on the type of mineral being
leased. Alberta Energy, the department responsible for leasing the
Crown's mineral rights, keeps track of all Crown mineral
dispositions and administers a separate process for each type of
mineral (i.e., coal, metallic and industrial minerals, ammonite
shell, oil sands, etc.). For example, metallic and industrial
minerals are typically leased by first applying for a permit for
mineral exploration rights, fulfilling the terms and conditions of
such permit and then applying for a metallic and industrial
minerals lease. The lease grants the lessee the exclusive right to
develop and mine the metallic and industrial minerals in a
specified location. However, a mineral surface lease granting
approval to occupy the location and conduct mining activities is
also required. Mineral surface leases can be obtained through the
Alberta Sustainable Resource Development.
Registering, Transferring and Granting Security over
Mining Leases
Pursuant to the provisions of the Alberta Land Titles
Act, before any disposition of mines and minerals can be
registered, the land titles office must conduct a mineral search
and issue a mineral certificate. A mineral certificate verifies the
proper ownership of the mines and minerals and it is only issued in
conjunction with a disposition document, such as a transfer or a
lease, which has been submitted to the land titles office.
The ability to grant security over, or transfer, a freehold
mineral lease will be determined by the terms of the lease
agreement. For Crown leases, the Alberta Mines and Minerals
Act (the Act) states that a transfer may be made by a lessee
if the transfer complies with the Alberta Crown Minerals
Registration Regulation (the Regulation) and the transfer conveys
the whole of the lease agreement, a specified undivided interest in
the lease agreement or a part of the location contained in the
lease agreement.
The Act and the Regulation also govern the registration of
security interests against Crown mineral leases. The Act provides
that a security notice in respect of a security interest may be
submitted to the Minster for registration, with some restrictions
(for example, security interests acquired before December 16, 1981
by a person other than a bank cannot be registered). The Regulation
provides procedural rules for continuations and cancellations of
registrations, as well as more general provisions providing that
security notices must be in the prescribed form and executed in the
proper manner.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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