Mining Comparative Guide -

1 Legal and regulatory framework

1.1 Which legislative and regulatory provisions govern mining in your jurisdiction?

Mining in the United Kingdom is governed primarily according to mineral type and the particular aspect of mining activity. There is no overarching or unified regulatory regime in the form of a general mining and minerals act, as is the case in many other jurisdictions.

In broad terms, regulation can be categorised according to specific minerals as follows:

gold and silver;
coal;
oil and gas; and
other minerals.

Gold and silver: Under common law, gold and silver are the property of the Crown. Gold and silver mines constitute ‘Mines Royal', originating from the Inclosure Awards and Acts of the early nineteenth century.

Mining of gold and silver in the United Kingdom is regulated by the Crown Estate who grant exclusive options to take a lease of these minerals for a specific area. Such leases are obtained from Wardell Armstrong LLP, the Crown Estate Mineral Agent.

Removing gold in any form requires the permission of the Crown Estate, as well as the need for rights of access from the owner of the surface of the land. The option is in a standard form and is for a one-year period (two in Northern Ireland).

Coal: Mining of coal in the United Kingdom is regulated by the Coal Authority – an executive, non-departmental public body, sponsored by the Department for Business, Energy and Industrial Strategy (BEIS). The Coal Authority owns the vast majority of unworked coal and coal mines (courtesy of the Coal Industry Act). The Coal Authority's responsibilities include, among others, the licensing of coal mining operations in the United Kingdom and the administering of coal mining subsidence damage claims.

Oil and gas: Under the Petroleum Act 1998 and the Continental Shelf Act 1964, oil and gas (including onshore and in territorial waters and the United Kingdom Continental Shelf) is owned by the Crown.

A licence is required to conduct onshore exploration, which grants exclusive rights to exploit for and develop oil and gas onshore within Great Britain. However, the rights granted under these licences do not include rights of access, and the licensees must also obtain any consent under current legislation, including planning permissions.

The Oil and Gas Authority is a government company limited by shares with the secretary of state for BEIS as the sole shareholder. It is responsible for the regulation of offshore and onshore oil and gas operations in the United Kingdom, including licensing, exploration and production, and oil and gas infrastructure.

Other minerals: Generally, the rights to other minerals in the United Kingdom (with the exception of Northern Ireland – see below) belong to the particular landowner (which is held to own everything beneath the surface of their land down to the centre of the earth). Details of minerals held in private ownership are held at the Land Registry.

There is no United Kingdom licencing system for mineral extraction and exploration, but planning permission must be obtained from a mineral planning authority for the extraction of minerals. In addition, numerous environmental consents and safety systems must be in place in order to conduct any specific mining operation.

In Northern Ireland, the Mineral Development Act (Northern Ireland) 1969 vested most minerals in Northern Ireland in the Department of the Economy. The Department of the Economy can grant prospecting and mining licences to companies for the exploration and development of minerals. There are three main exceptions:

gold and silver;
minerals which were being worked at the time of the 1969 Act; and
‘common' substances (including aggregates, sand and gravel).

1.2 When was the mining legislation last reviewed?

There has never been a comprehensive review of all mining legislation. This is largely due to the fact that mining legislation and its regulation in the United Kingdom are dependent on mineral type and is not codified into one single law or code having general application across the mining industry (see answer to question 1.1).

However, some of the most recent relevant legislation for the sector includes:

the Mining Regulations 2014, which relate to health and safety in mines;
the Petroleum Act 1998, the regulatory regime applying to oil and gas exploration and production in the United Kingdom; and
the Coal Industry Act 1994 which established the Coal Authority and provides the framework for the regulation of the coal industry.

1.3 What other legislative and regulatory provisions have relevance for mining operations in your jurisdiction?

Planning law: The Town and Country Planning Act 1990 defines ‘development' as including the ‘mining' of land. Planning legislation therefore shapes both the regional planning policies for mineral extraction and the granting of planning permission for particular mining projects.

Health and safety law: Employers at a mine or quarry owe a common law duty to each employee to take reasonable care for safety in all circumstances and exposure against unnecessary risk. Similarly, the occupier of a mine or quarry owes a common law duty of care to those lawfully visiting the premises under the Occupiers' Liability Act 1957.

Furthermore, the Mines Regulations 2014 regulate health and safety in mines. Where a person suffers injury by reason of a breach of any mining legislation creating a duty that person may be entitled to

recover damages in a civil action for breach of statutory duty. A quarry or mine owner may potentially be liable both in negligence and for breach of statutory duty as the Mines Regulations 2014 are not to be construed as derogating from the legal duties owed by an employer to its employees.

Law of nuisance: Common law principles of nuisance apply to the use of land as a mine or quarry. The emission of dust or noxious fumes, noise creation and vibration, the discharge of polluting effluents into a river and the projection of debris by blasting are some examples of how mining activities could constitute a nuisance under common law.

1.4 Are there any regional treaties or laws that need to be taken into account?

The United Kingdom has ratified several bilateral and multilateral investment treaties made with other states that offer protection to foreign investors carrying out business activities that include mining work in the United Kingdom. Public international law governs these treaties and provides separate protection to any contractual provisions or domestic laws that such foreign investors may also benefit from.

A list of the relevant treaties is available on the websites of the following: United Nations (UN) Conference on Trade and Development, United Kingdom Foreign & Commonwealth Office and International Centre for Settlement of Investment Disputes.

1.5 Which bodies are responsible for enforcing the applicable mining laws and regulations? What powers do they have?

Main bodies: The main bodies responsible for administering mineral rights, which vest in the Crown, are as follows:

Coal Authority: The Coal Authority's powers includes the licensing of coal mining operations in the United Kingdom and the administration of coal mining subsidence damage claims.
Crown Estate: The Crown Estate's powers include the granting of exclusive options to take a lease of gold and silver for a specific area.
Marine Management Organisation (MMO): The MMO is an executive, non-departmental public body sponsored by the Department for Environment, Food and Rural Affairs. The MMO's powers include the licensing of mining operations on the sea bed.

Other bodies: Planning authorities play a large part in the regulation of mines in the United Kingdom. This is both at a regional level (regional planning policies for mineral extraction) and at a project-level (granting permission for specific mining projects).

Environmental regulation is undertaken by independent government regulators. The principal environmental regulator for England is the Environment Agency. However, in some cases, the regulator will be the relevant local authority or Natural England. Natural Resources Wales is the environmental regulator for Wales. The Scottish Environmental Protection Agency, together with Scottish Natural Heritage, is the relevant regulator for Scotland. The Northern Ireland Environment Agency is Northern Ireland's environmental regulator.

The Health and Safety Executive (HSE) enforces health and safety law in England, Wales and Scotland, together with local authorities and other bodies authorised under statute. The Health and Safety Executive for Northern Ireland enforces health and safety at work standards in Northern Ireland.

1.6 What is the regulators' general approach in regulating the mining sector?

As there is no single regulatory body or official responsible for the UK mining sector, it is not possible to comment on a general approach.

2 Mining industry

2.1 How mature is the mining industry in your jurisdiction?

The United Kingdom has a mature mining industry and a long history of mining, dating back many generations. At present, the industry is made up of approximately 13,000 companies, which accounts for around. 0.5% of all businesses.

UK mining and the quarrying of non-coal production have slowed in recent years. Coal production volumes (traditionally the focus point of the UK mining industry) have experienced a constant drop over the past three decades. Historically, coal mining was a significant industry in the United Kingdom. The closure of Kellingley Colliery as the last deep coal mine in 2015 illustrates a trend that is not specific to the United Kingdom, but reflective of the global shift from coal and other fossil fuels as energy sources.

2.2 What are the key minerals which are mined in your jurisdiction and where is mining activity typically based?

The United Kingdom has relatively diverse and large deposits of minerals that have been mined historically.

Key sectors include:

energy minerals – coal;
construction minerals – aggregates, brick clay and cement raw materials;
industrial minerals – kaolin (china clay) and ball clay, silica sand, gypsum, potash, salt, industrial carbonates, fluorspar and barytes; and
metal minerals – tungsten, gold.

The majority of mining and quarrying within the United Kingdom is now focused on construction minerals, which is the largest bulk market for non-energy minerals, such as clay and shale, gypsum and slate.

The United Kingdom does not currently produce the key minerals used in battery technology or renewable energy. The United Kingdom does have an interest in these minerals, which would assist in meeting the United Kingdom's legally binding target to eliminate emissions of greenhouse gases, and eventually assist the UK government with its plan to ban new petrol and diesel cars by 2040.

The East Midlands in the United Kingdom is the region with the greatest mining output and where coal is the most abundant resource, followed by Southwest England and then Southeast England in terms of mining activity and output. Traditional mining heartlands, such as the Northeast and Scotland, have been significantly affected by the decline in the UK coal industry in the last 30 years.

2.3 Are any minerals deemed strategic and, if so, what impact does this have?

The United Kingdom informally considers a number of minerals to be strategic. These are generally considered integral to advanced manufacturing and low-carbon technologies. Most of these minerals are imported. One particular example is cobalt, which is critical to a number of increasingly important industries, including electric vehicles, medical implants and large scale grid-connected energy storage facilities.

The UK government has particularly noted the importance of some rare earth elements for the transition of the UK economy to low carbon and advanced manufacturing. However, despite all this, there is currently no specific strategy ensuring the availability of ‘strategic' minerals in the United Kingdom. This is unlike certain countries where host governments have formally identified by law strategic minerals within their countries and have sought to apply specific fiscal and operational regimes to the mining and processing of those minerals.

2.4 Who are the key players in the mining industry in your jurisdiction?

While large-scale mining operations in the United Kingdom generally do not exist, a number of the world's largest mining companies are listed on the London Stock Exchange. For example, British-Swiss multinational Glencore was by far the biggest mining company in the United Kingdom in terms of revenue in 2019, at £174.6 billion.

2.5 In addition to exploration rights and mining rights, what other mining rights and titles exist (eg, artisanal or small-scale mining rights)?

There are no distinct artisanal, small-scale or equivalent mining rights or titles in the United Kingdom.

3 Exploration rights

3.1 What licences are required to undertake prospecting and exploration activities in your jurisdiction? Do these vary depending on the type of mineral or the location of the activity?

Exploration licences are required for seismic contractors that wish to gather data to sell geological resources themselves, but also for holders of production licences that wish to explore outside the areas where they hold or require exclusive rights.

Onshore exploration activity requires access rights granted by the landowner or obtained through the acquisition of land, in addition to the exploration licence. For coal, an exploration licence from the Coal Authority is required, together with the necessary surface rights and any other necessary permissions or consents (eg, planning consents).

3.2 What requirements must be satisfied to obtain a licence?

In order to obtain a licence, all licensees must demonstrate that they have the ability to meet the requirements for operations within the framework specified by the licence. Such requirements include:

having suitable technical and managerial ability in terms of experience and staff numbers; and
appointing an operator capable of carrying out its functions and discharging its duties under relevant statutory provisions to a satisfactory degree.

The Oil and Gas Authority (OGA), for example, further expects the corporate governance arrangements of all licensees to reflect their portfolio in terms of the hydrocarbon lifecycle, the nature of operations and whether the underlying assets are operated or non-operated. The OGA may also assess a licensee's governance arrangements to ensure they reflect best industry practice, should the circumstances dictate.

Finally, licensees must meet certain financial criteria to demonstrate that they have the financial capability to exploit the exclusive rights granted by the licence.

3.3 What is the procedure for obtaining a licence? How long does this typically take?

Exploration licence procedures vary depending upon the type of mineral. The ownership of oil, gas, coal and precious metals in the United Kingdom is held by the Crown Estate and exploitation of these resources is overseen and run by the Crown Estate. All other minerals are within private ownership. An exploration licence can be applied for at any time, and without competition by completing and submitting the relevant application form. Timing also varies in obtaining an exploration licence dependent upon the applicable public body. As an example, the Coal Authority aims to determine a coal exploration licence application within five weeks.

3.4 Who can own exploration rights in your jurisdiction? Do specific requirements or restrictions apply to foreign operators?

The general principle in the United Kingdom is that mineral rights can be held by either natural persons or corporate entities. This principle applies whether the rights derive from the authority of the Crown (in the case of hydrocarbons, coal and gold and silver) or have been leased from the landowner (in the case of all other minerals).

Direct ownership of mineral rights through ownership of land, whether by a natural person or a corporate entity, is subject to a number of rules which govern ownership rights and are specific to land. For example, land cannot be owned by minors.

There are no requirements or restrictions relating to the mining sector which govern foreign ownership of mining rights.

3.5 What fees and other charges are incurred in obtaining a licence?

Fees vary depending on mineral type. The licencing application fee for oil and gas, for example, is £500 and must be paid before the licence will be issued. Additionally, an exploration licence carries an annual payment of £2,000. The licensee will be invoiced for the first year's annual fee shortly after the licence comes into force.

There is a possibility that the licensee may bear a number of different fees and charges to cover various processing and administrative costs incurred by the OGA. These include, for example, well consents, FDPs and licence assignments.

The Coal Authority charges an application fee at a rate of £5.75 per hectare, ranging from a minimum of £575 to a maximum of £11,500. There is also a licence grant fee of £575 and an annual fee of £575 too.

3.6 What is the duration of a licence? What is the process for renewal?

The duration of the licence will be specified in the terms of the licence itself.

The OGA will only extend a licence if it becomes absolutely necessary. As such, licensees that anticipate that an extension will be needed should formally inform the OGA six to 12 months prior the licence's expiration date.

The Coal Authority will typically grant an exploration licence only for four months. Any variation to the licence can be effected using the same application form as an application for a new licence.

3.7 What are the operator's rights and obligations under the licence?

For oil and gas, an exploration licence grants rights to explore only, not to produce. It is non-exclusive, meaning that it covers all acreage outside those areas covered by any corresponding production licences that are in effect at the time.

For coal, an exploration licence can be exclusive or non-exclusive; but again it only grants the rights to explore and bore for sampling and testing.

An exploration licence is granted pursuant to a lease or other governing document, which will specify the obligations owed by the licensee to the landowner, as agreed between the parties. These will normally include the obligation to pay rent, to ensure adequate support for the surface and to make good any damage caused to the surface or others.

3.8 Are there any requirements re relinquishment of an exploration licence or part of the area covered by an exploration licence?

For minerals held by the Crown, there is no legal requirement for the holder of an exploration licence or mining right to relinquish such licence or right (other than in petroleum licences for offshore exploration,). However, in respect of a privately granted licence for other minerals the licence terms will need to be consulted carefully to determine whether relinquishment penalties might apply if, for example, the licence holder had not completed an exploration work programme within the timeframe set out in the licence.

3.9 Can licences be transferred? If so, how and subject to what consents? Do any restrictions or taxes apply to direct or indirect transfers?

For oil and gas, unless OGA prior consent is granted, licence assignments are prohibited in the United Kingdom. Any assignment made without prior consent is considered to be a very serious breach of the model clauses attached to every licence. As such, it is grounds for immediate revocation of the licence or to reverse the assignment using powers granted by Section 76 of the Energy Act 2008.

In processing applications in respect of onshore exploration licence transfers, the OGA Licensing Team will consult with the OGA and will also circulate details of each application to Her Majesty's Revenue and Customs. If there are no reasons to withhold it, the OGA will approve the assignment or transfer.

Coal exploration licences can be assigned by using the same application form as mentioned above, which allows for assignment as a form of variation to the licence.

For all other licences of other minerals, the terms of the relevant licence will apply, and it is most common for consent to be required for licence transfers.

3.10 Does an exploration licence give any priority when applying for a mining right?

There is currently no extraction and exploration licensing procedure within privately owned areas of resources in the United Kingdom. In order to extract, planning permission must be obtained from a mineral planning authority.

4 Mining rights

4.1 How is ownership of mining rights determined in your jurisdiction?

As set out above, ownership of mining rights to minerals in the United Kingdom is based on specific mineral type and is divided between those minerals owned by the Crown and those owned by private entities with legal title to the relevant land over the minerals.

The general principle in the United Kingdom is that mineral rights can be held by either natural persons or corporate entities. This applies whether the rights stem from the authority of the Crown or have been leased or otherwise acquired from the landowner.

Information in respect of the ownership of mineral rights is kept by the Land Registry, where available, together with details of title ownership of the land surface.

Direct ownership of mineral rights through ownership of land, whether by a natural person or a corporate entity, is subject to a number of rules which govern such rights and that are specific to land ownership – for example, land cannot be owned by minors.

The ownership of mines and the minerals may be severed from the ownership of the surface rights to the land above such minerals. This is achieved by either the sale of the mines and minerals themselves by the owner of the land surface title or the reservation of those minerals on a sale of the surface title of the land to a third party.

Since ownership of mines and minerals can be severed from the ownership of the surface, more mines and mineral owners are seeking to protect their interests by pursuing voluntary registration of their interests at the Land Registry. This means that is becoming less common to encounter separate titles for underground mines and minerals. Notably, the Land Registry will not necessarily notify the surface land title owner that the title has been severed.

Where mineral rights are held through licences granted by government bodies (the Coal Authority in the case of coal; the Oil and Gas Authority in the case of oil and gas; and the Crown Estate in the case of gold and silver), there will generally be a formal statutory process to arrange for these licences to be transferred to a new entity.

Further, operational permits such as environmental permits authorising particular activities must also be transferred to any new operator, which is also regulated by statutory rules governing transfer process. Planning permission tends to be awarded in favour of the specific property area on which the mining and related activities are conducted, but any transfer of the title must have consideration for the conditions and requirements of the relevant planning award.

4.2 What are the key requirements in order to apply for a mining right?

Application requirements differ by reference to the mineral type. These will be set by the Crown Estate, the Coal Authority, the Oil and Gas Authority (OGA) and the individual land owners, depending on the minerals being worked and mined. In additional, planning laws and Health and Safety Executive legislation will determine further application requirements.

For example, in England and Wales, applicants should also consult the Crown agent, Wardell Armstrong LLP. However, the Crown Estate may sometimes grant a lease of Mines Royal (ie, gold and silver in the United Kingdom owned by the Crown Estate) within a specific area directly.

The application process in Scotland requires a private mining party to consult the Crown agent, Wardell Armstrong LLP, which is legally entitled to grant licences to prospective private parties wishing to mine. Such applicants must satisfy the Crown Estate mineral agent that their financial and technical standing is of good order and that they have the ability to manage exploration through to completion. Applicants will still be required to obtain all other necessary permissions for their activities.

In either of the above, the applicant must also be granted rights of access and exploration from the relevant land from the landowner.

In Northern Ireland, precious metals such as gold and silver belong to the Crown Estate Commissioners (CEC). Therefore, an application must be made to both the CEC and the Department for the Economy Northern Ireland (DfENI) for exploration rights is respect of such minerals. It is for the DfENI to issue a licence, in which case the CEC will normally follow suit.

In addition to obtaining a licence, all licensees must obtain local planning permission.

4.3 What fees and other charges are incurred in obtaining a mining right?

Fees and charges will differ and, again, are dependent upon the mineral type. There is no single list of fees and charges for general application across all mining operations in the United Kingdom.

As an illustration, fees for coal mining are payable to the Coal Authority in respect of the licences granted by them. These include:

fees payable in regard to licences for carrying out coal mining operations (such fees are payable for licences both which are operating and which are conditional on planning permission); and
fees payable for licences for coal exploration.

Fees can also be payable to the Coal Authority where the authority agrees to allow a person to access or pass through its coal estate. Such agreements are typically reached for processes including:

coal bed methane;
deep energy exploitation;
mine water heat recovery; and
abandoned mine methane extraction.

Separate to fees payable to the Coal Authority are any fees owed to the local planning authority in regards to any planning application associated with the mining operations.

4.4 What is the duration of a mining right? What is the process for renewal?

Durations of mining rights will differ. There is no general rule as to the minimum or maximum time period for operation. Operations will also be time limited by reference to the planning permission terms.

The option to lease granted by the Crown Estate, for example, may be granted for up to six years, depending on the proposals in the application, funding and the experience of the company making the application. Options for longer periods are generally structured in three two-yearly stages. There is no clear guidance from the Crown Estate regarding cancellation. As is the case with planning permission, any lease granted by the Crown Estate will involve conditions. Any material breach of these conditions could lead to the lease being cancelled or revoked.

There is no typical duration of planning permission granted in connection with the mining of other mineral rights. As noted, planning permission will be required and this will always include conditions. These conditions will determine the term of the planning permission by imposing a time limit. Any breaches of these conditions may result in the permission being cancelled or revoked. Equally, the duration will also be affected by the length of the mining lease (or licence) the surface owner is willing to grant.

When options are granted for long periods, the exploration company can progress automatically from one option stage to the next, provided that a progress report is submitted at least eight weeks before the end of each stage. The Crown Estate must be satisfied that the applicant meets the application and renewal criteria and that there is no competing application for the same area. The entity seeking application or renewal must submit certain information to the Crown Estate, including its previous mineral exploration activity, exploration programme, key personnel and cash-flow forecast. Where there is a competing application, this will be reviewed by the Crown Estate and the area will be awarded to the most suitable applicant. A formal statutory process will generally be required to transfer the licence to a new entity.

4.5 Who can own mining rights in your jurisdiction? Do specific requirements or restrictions apply to foreign operators?

Refer to question 3.4.

4.6 Do any indigenous ownership requirements apply in your jurisdiction?

There are no indigenous ownership requirements in the United Kingdom (except those relating to Crown reservation). Although there is no concept of native title in English law and therefore no applicable indigenous rights, there are certain requirements which are designed to protect the Crown or government authorities, which may affect mining rights.

4.7 What role does the state play in the mining industry in your jurisdiction?

As set above, the Crown Estate, the OGA and the Coal Authority all carry out key regulatory roles on behalf of the state in the UK mining industry, together with the local and regional planning authorities of local government.

4.8 Are there requirements for the government to enter into a mining development (or similar) agreement in addition to the licences/permits? When is this required or available?

There is no legal requirement for the UK government to enter into mining development (or similar) agreements with developers or operators of mining assets (or their investors).

4.9 Can mining rights be transferred? If so, how and subject to what consents? Do any restrictions or taxes apply to direct or indirect transfers?

Any restrictions on the transfer of such rights will depend on the nature of the rights being transferred. Consent to transfer is, however, generally a requirement that must be met before any transfer takes place.

When the owner of surface land sells the freehold estate, non-fuel mineral rights will transfer with the sale of land, so the purchaser will inherit full title to such rights, including any non-fuel or precious minerals (except gold and silver). These rights can also be transferred by way of deed or lease.

Planning consents authorising various mining activities will also run with the land, unless the consent expressly indicates otherwise. The transfer and renewal of leases and other rights of access granted by the land owner will generally be governed by private agreement between the parties.

Where mineral rights are held through licences granted by government bodies, there will generally be a formal statutory process to arrange for the licences to be transferred to a new entity. Operational permits such as environmental permits authorising particular activities will also need to be transferred to any new operator, which is also regulated by statutory rules governing transfer process.

Any change in ownership or operatorship of a mine is likely to require a range of regulatory approvals, notifications, and landowner or third-party consent.

4.10 Can security be taken over mining rights?

The regime for taking security over mining interests depends on the specific land interest held. For example, if the mining interest arises by virtue of being a proprietor to the land and the required planning consents are possessed, the interest in the land can be mortgaged in the usual way.

If the mining interest arises by virtue of a licence, lease or permit, it will be mortgageable provided that the licence, lease or permit consists of a mortgageable interest. The terms of specific instruments should be consulted to determine whether there are any restrictions in this regard.

Where rights to conduct reconnaissance, exploration and mining arise by virtue of being the owner of the land of which the relevant activity takes place, and on the condition that the requisite planning consents are obtained, the interest in the land will be mortgageable in the usual way. Where such rights arise by virtue of a Coal Authority licence, permit or lease, they will be mortgageable, provided that the instrument conferring the rights comprises a mortgageable interest. The terms of specific instruments should be consulted to determine whether there are any restrictions in this regard.

4.11 What provisions apply with regard to closure or abandonment of a mining right?

Environmental legislation and contractual arrangements regulate closure obligations in relation to mines. Contractual obligations, such as leases of land, could contain more onerous requirements than statute. Planning permissions are also likely to include site restoration programmes that must be complied with upon closure. To surrender certain environmental permits, including those for mining waste operations, the relevant regulator will need to be satisfied that the operator has taken the necessary measures to avoid a risk of pollution and to return the site to a satisfactory state.

Directive 2006/21/EC requires operators managing extractive waste to include a site closure plan (dealing with rehabilitation, after-closure procedures and monitoring) in their waste management plan, to be delivered by way of an environmental permit. If the regulator identifies land as contaminated, a remediation notice will be served which may also require site clean-up, investigation, mitigation and monitoring of contamination.

5 Surface rights

5.1 Does the law of your jurisdiction distinguish between mining rights and surface rights? If so, how does an owner of mining rights acquire surface rights?

The ownership of mines under land may be severed from the ownership of the surface rights, by either:

the sale of the mines and minerals themselves; or
the reservation of them on a sale of the surface of the land to a third party.

There is a principle that the owner of the surface land is entitled to the mining rights beneath that land. However, this presumption may be rebutted by evidence showing that the ownership of the land has been severed from the mines beneath where this is stated in:

a conveyance or demise of land excluding the mines;
a conveyance or demise of the mines excepting the surface;
an Act of Parliament; or
evidence of long and continuous enjoyment of the mines by a person other than the surface owner.

The different strata of a parcel of land may also be shown to be in different ownership. However, the fact that a person owns a mine under a parcel of land does not raise a presumption of ownership regarding the surface of that parcel, or vice versa.

If the surface rights and mining rights were shown to be in different ownership, the owner of the mining rights would need to acquire surface rights. There are two main rights that are required to use the surface of land:

Governmental permission for the proposed land use is governed by the UK planning regime (Town and Country Planning Act 1990). An operator will need to apply for planning permission which involves a public consultation process, a key part of which will be an environmental impact assessment.
The necessary land rights (ie, rights of access to conduct operations) will depend on the terms of the deed or document that granted the rights to conduct reconnaissance, exploration or mining. Any mining company must ensure that the deed granting such rights also grants all suitable and necessary rights in respect of use of the surface land that the mining company will require.

5.2 Where surface rights are acquired, what are the operator's rights and obligations as regards the landowner? And what are the landowner's rights and obligations as regards the operator?

The operator's obligations towards the landowner will be set out in the deed or other agreement that grants the operator the surface rights. The nature and extent of these obligations are determined by the parties. However, typical obligations towards the landowner include:

an obligation for the operator to rectify any damage caused to the surface by it (to the satisfaction of the land owner);
an indemnity in favour of the landowner, indemnifying it against any losses suffered as a result of the operator's activities;
an obligation for the operator to ensure that any shafts and excavations are safe;
an obligation for the operator to excavate in a manner that ensures support for the surface of the land;
a general obligation for the operator to comply with all relevant laws and matters of planning; and
provision for payment to the landowner in return for the grant of the rights (either a lump sum or regular payments).

The deed or agreement may also contain restrictions on the operator – for example, preventing it from developing or building on the surface of the land.

Any obligations of the landowner towards the operator (eg, rights of access to the land) will also be agreed between the parties in the deed or document granting the rights to the operator.

5.3 Please give an overview of the process for any mandatory acquisition of surface rights (eg, process and time to enforce).

Compulsory acquisition of land and rights for mining and extraction is a procedure which involves an application to central government in the event that the acquisition of interests in land will facilitate the carrying out of development (including mining operations), redevelopment or improvement on, or in relation to, a piece of land. This process is used when it is not certain that the land can be acquired by way of agreement.

Once the application is made, the government will then instigate proceedings in the High Court. If the court is satisfied that the grant is "expedient in the national interest", certain rights will be granted pursuant to the Mines (Working Facilities Support) Act 1966.

Local planning authorities also have the power to acquire land via a compulsory purchase order (CPO). CPO powers can be used if the acquisition will facilitate the carrying out of ‘development' (the definition of ‘development' includes mining operations), redevelopment or improvement to the land. Planning authorities must follow due process when seeking to exercise CPO powers, including:

assessing whether the proposed development will lead to socio-economic and environmental improvements in the area;
seeking to acquire any land first by agreement with the landowners; and
paying appropriate compensation to those whose land is subject to a CPO.

Where a level of compensation cannot be agreed between the landowner and the local authority, a specialist tribunal exists to determine this level.

The local planning authority may also acquire land through its powers of compulsory purchase for planning purposes. Such powers must not be exercised unless the authority considers that the proposed development is likely to contribute to the achievement of the promotion or improvement of the economic and/or social and/or environmental wellbeing of its area.

In either case, compensation will be payable to landowners where land has been taken from them, or which have otherwise suffered a loss as a result of the compulsory acquisition, and there is a specialist tribunal to assess compensation for such landowners if it is not agreed.

5.4 Are any native title issues applicable, either at the exploration licence stage or when a mining right is issued?

English law does not include the concept of native title.

5.5 Are any other rights needed to use the land (eg, zoning permissions or planning requirements)?

Planning permission is essential to extract minerals and operate mining projects. The body responsible for granting this planning permission varies according to area:

In England and Wales, the body is known as the Mineral Planning Authority. In areas where there is a county council, it will grant planning permission for mineral extraction. In unitary areas, London boroughs and metropolitan districts, the local planning authority grants this permission.
In Scotland, planning permission relating to minerals is granted by the local planning authority.
In Northern Ireland, planning applications for mineral working is dealt with centrally by the strategic planning unit.

When determining planning applications for mining, the above bodies all operate ‘plan-led' systems. As a result, the decision as to whether to grant permission for mining activities must be taken having regard to the minerals development plan for the particular local area, unless there are other ‘material considerations' that indicate otherwise. ‘Material considerations' is not defined, but often relates to the impact of the development on protected natural assets (eg, watercourses).

If granted, planning permission is almost always accompanied by planning conditions, which enables the local planning authority to regulate how the development is carried out, both during and after the development activities. Planning conditions also set the lifespan of the planning permission by imposing a time limit (eg, three years).

The body that grants the planning permission will also oversee the control of the development, including taking enforcement action where conditions are not complied with.

6 Environmental issues

6.1 What environmental authorisations are required to undertake prospecting, exploration and mining activities in your jurisdiction? Do these vary depending on the type of mineral or the location of the activity?

The most fundamental and general environmental authorisations will be dealt with under the framework of the UK planning regime. Environmental controls and restrictions will be imposed on any mining operations as a condition to receiving planning permission, which will generally include operational controls (eg, limitations on vehicle traffic) and restorative requirements (eg, replacement of topsoil).

The UK planning regime ‘plan-led' system means that generally, planning permission for mining will be granted in accordance with the mineral development plan for the area. Exceptions can be made if there are material considerations – which can be wide-ranging, but often relate to the impact of the development on protected natural assets (eg, countryside of protected value). In this way, authorisations can vary to a significant extent, dependent upon the location of the activity. For example, mining developments within close proximity of residential areas will have appropriate conditions, such as more stringent restrictions on pollution, noise and traffic.

In addition to planning controls, a range of environmental permits and licences are likely to be required.

Some of the key legislation in this area includes the following:

The EU Mining Waste Directive (2006/21/EC) is implemented in England and Wales through the Environmental Permitting (England and Wales) Regulations 2016 and covers management of mining waste, as well as other concerns such as discharges to water, emissions to air, and mineral crushing processes;
The Water Resources Act 1991 deals with the abstraction of surface and/or ground water, or for water to be moved from one location to another without intervening use; and
The Wildlife and Countryside Act 1981 deals with conservation, as well as the Conservation of Habitats and Species Regulations 2017 and the Conservation of Offshore Marine Habitats and Species Regulations 2017.

6.2 What environmental obligations must the operator observe while the mine is operational?

The environmental obligations that must be observed while the mine is operational are as established in the licences, permits and planning permission, which have been necessary to lawfully mine. These often include obligations to control the mineral crushing processes and the discharge of material to water.

The operator is equally subject to English common law obligations linked to the environment – in particular, ensuring that it does not carry out any activities that could constitute a nuisance such as excessive noise or vibration.

6.3 What environmental obligations must the operator observe in relation to closure of the mine?

Closure obligations are regulated by the environmental legislation described above and also contractual arrangements (eg, in the lease of the land), especially with regard to the restorative requirements imposed upon the granting of planning permission. The EU Mining Waste Directive (2006/21/EC) can require (and in practice does for most mining operations) that a permit is obtained to manage extractive waste, and this necessitates a waste management plan inclusive of closure. There will need to be details included in the application for a permit for extractive waste management over the financial security (eg, guarantee or bond) needed to cover the yielding of any site. The Coal Authority can, for example, impose such provisions in coal mining leases and licences, and restoration bonds can also be requirements of planning consent more generally.

The Environment Agency can order remediation if it identifies contaminated land.

6.4 What are the potential consequences of breach of these requirements – both for the operator itself and for directors, managers and employees?

Environmental breaches can result in the prosecution of both individuals and companies under criminal law. Unlimited fines can be imposed, and the maximum term for imprisonment can range from 12 months to five years (depending upon whether it is prosecuted in the lower or higher courts).

Civil law claims can also be brought by those that have suffered loss.

Moreover, the Environment Agency can serve a notice for remediation of contaminated land, where failure to comply can constitute a criminal offence.

6.5 Which bodies are responsible for enforcement of environmental obligations?

Enforcement of environmental obligations is generally undertaken by the relevant local authority (eg, council) or the Environment Agency. Natural England also has certain enforcement powers, including the right of serving notices which can include small pecuniary fines.

6.6 What is the regulators' general approach in regulating the mining sector from an environmental perspective?

As with similar industries and operations in the United Kingdom, the regulatory approach as it applies to environmental compliance for the mining sector is one of careful oversight and management. Enforcement powers will generally be exercised in the appropriate circumstances.

7 Health and safety

7.1 What key health and safety requirements apply to operators in your jurisdiction?

The Mines Regulations 2014 and the Quarries Regulations 1999 constitute the primary legislation governing health and safety in mines and quarries and which have direct application to operators in the United Kingdom. Further, the Health and Safety at Work Act 1974 (HSWA) and the Management of Health and Safety at Work Regulations 1999 (MHSWR) govern health and safety in the workplace generally. Together, these aim to establish a ‘goal-setting' safety regime.

Under the HSWA and MHSWR safety regime, employers – including operators – have a statutory duty to ensure that risks associated with mining are reduced to a level as is reasonably practicable through a system of constant risk assessment. The HSWA further requires employers with five or more employees to have a written health and safety policy which is brought to the attention of employees.

In addition to this primary legislation, there is a wide range of industry-specific secondary legislation governing health and safety in mining. This includes regulations on:

the control of noise, vibrations, electricity and explosives at work;
dangerous substances and explosive atmospheres;
the reporting of incidents, diseases and dangerous occurrences; and
the provision and use of work equipment.

7.2 What reporting requirements apply with regard to mining accidents in your jurisdiction?

See question 7.1 in respect of the obligation to report incidents.

7.3 What are the potential consequences of breach of these requirements – both for the operator itself and for directors, managers and employees?

Health and safety obligations are imposed on owners, employers, managers and employees.

Failure on the part of an employer to properly discharge its duties in relation to health and safety may result in liability ranging from negligence claims to vicarious or strict liability. Notably, breach of health and safety regulation – specifically the HSWA – is subject to criminal liability and may result in prosecution.

The Health and Safety Executive (HSE) further has the authority to issue a prohibition or improvement notice, of which non-compliance may result in fines and prosecution, as well as criminal prosecution.

Since the enactment of the Corporate Manslaughter and Corporate Homicide Act 2007, companies can now also be held criminally responsible for severe breaches of health and safety standards and regulations resulting in death.

7.4 What best practices in relation to health and safety should operators consider adopting in your jurisdiction?

With the introduction of safety legislation and regulations, there has been a steady reduction in fatality rates at mining operations. Operators are expected to take active measures to ensure that employees are fully compliant with their internal health and safety policy, together with general health and safety standards and applicable regulations.

It is important for operators to ensure that employees are regularly kept informed about hazards and receive frequent training to help identify workplace hazards and risks. Employees who may be exposed to any hazards should have a sound understanding of how to protect themselves against such risks and what to do in the event of exposure to a particular hazard. Employees should be given the appropriate personal protective equipment (PPE) and training on how to use their PPE properly and effectively. Training is one of the most effective tools for incident prevention, and tailored training sessions should be delivered on a regular basis to keep employees informed on workplace and regulatory changes and to ensure workers are aware, alert and prepared.

It is strongly advisable that operators conduct thorough and routine safety inspections and safety audits. Employers should monitor employee performance and provide constructive and uniform feedback to ensure consistency of operations and to main a safe workplace. Following such procedures, immediate action should be taken to rectify any issues identified. It is important for operators to initiate open dialogue with their workforce and listen to any suggestions or complaints that are fed back.

7.5 Which bodies are responsible for enforcement of health and safety obligations?

Health and safety legislation in the United Kingdom is enforced by the Health and Safety Executive (HSE) or by a local enforcing authority – the relevant body will depend on the main activity carried out at the work site. The HSE is responsible for the enforcement of health and safety legislation in higher-risk workplaces including mines. The local authority officers, such as environmental health officers are responsible for its enforcement in most lower-risk workplaces – namely pollution and nuisance.

7.6 What is the regulators' general approach in regulating the mining sector from a health and safety perspective?

The HSE, acting through Her Majesty's Inspectorate of Mines (HMIM), is responsible for all underground mining operations in the United Kingdom. HMIM is proactively working with mine operators to assist in improving safety standards to meet modern-day requirements and to mitigate any major hazards. The HMIM further aims to improve the personal health of worker in the mining industry by establishing and work through a number of committees involving mine operators, unions, equipment manufacturers, consultants and other interested parties.

The Mining Industry Safety Leadership Group (MISLG) – which comprises representation from employers' organisations, trade unions and the HSE – works to provide a forum to develop, lead and implement a strategy for health and safety coal mines and mines producing other minerals, and within the mining industry generally. The MISLG's mandate is to address specific strategic roles of leadership, involving the workforce, avoiding catastrophe, building competence and creating healthier, safer workplaces.

8 Processing, refining and export

8.1 What requirements and restrictions apply with regard to the processing or refining (beneficiation) or minerals?

Beneficiation procedure of minerals must be compliant with all applicable environmental and health and safety requirements. This includes restrictions on the manufacture and use of certain dangerous substances, such as asbestos.

There are no separate laws in the United Kingdom that require a seller of minerals to first beneficiate, refine or process ores or other raw or unrefined material in the United Kingdom as a condition to export. In certain countries, laws are imposed on exporters that require those exporters either to process minerals within the country before export, or, as alternative, pay a penalty for exporting raw materials overseas.

8.2 What requirements and restrictions apply to the export of minerals?

Mineral producers currently have specific obligations under the EU legislation which governs the registration, evaluation, authorisation and restriction of chemicals (REACH) for sales within the European Union, including in the domestic market. Exceptionally, producers can avoid registration provisions under REACH, provided that the minerals they produce occur in nature and are not chemically modified.

Following the United Kingdom's withdrawal from the European Union, EU legislation will no longer apply to the United Kingdom, meaning that current REACH authorisations granted to UK-based companies will no longer exist. For UK-based producers to continue exporting substances subject to REACH to offshore customers, a representative located in the European Union may be appointed to register on their behalf, or EU-based customers may register as importers.

For items listed on UK Strategic Export Controls List, an export licence issued by the Export Control Joint Unit will be required.

9 Taxes and royalties

9.1 What taxes, royalties and similar charges are levied on mining operators in your jurisdiction? How are these calculated?

There are no ‘special' taxes or charges levied on mining operators. Instead, mining operators are subject to the same taxes as other businesses including:

corporation tax on the profits arising out of mining activities; and
stamp duty land tax on the grant of a lease of land for mining rights.

Generally, no royalties are payable to state entities for conducting mining activities. However, royalties may be payable to a private landowner if specified in that particular agreement. In addition, the Crown Estate may specify for royalties to be paid to it in return for the grant of rights to extract certain minerals.

9.2 Are any tax incentives available for mining operators?

As there is no separate taxation regime for mining, there are no particular tax advantages or incentives for mining operators.

However, the Mineral Extraction Allowance (MEA) is a particular type of capital allowance applicable to those corporations employed in mineral extraction activities. Businesses carrying out ‘qualifying activities' for the purposes of the MEA regime can reduce their corporation tax liability by claiming allowances against the expenditure associated with these qualifying activities (eg, costs associated with mineral exploration and expenses incurred in relation to obtaining planning permission for mineral extraction).

9.3 What other strategies might mining operators consider to mitigate their tax liabilities?

Other than sensible tax planning and structuring in accordance with general UK tax and fiscal laws, there are no strategies that we would comment on in this context.

9.4 Have there been any significant changes to the taxation rates applicable to mining companies in the last three years?

There are no taxation rates specific to mining companies in the United Kingdom.

10 Disputes

10.1 In which forums are mining disputes typically heard in your jurisdiction?

The Land Registry, an administrative body which maintains records of land ownership and proprietary interests in land, is responsible for protecting mining rights in the United Kingdom. Disputes arising from ownership of land are dealt with by an independent administrative tribunal: the Land Registration division of the Property Chamber. The Upper Tribunal (Land Chambers), which is an independent judicial system, hears appeals from the Property Chamber.

As the United Kingdom is party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958, the courts in England and Wales will recognise and enforce foreign arbitration decisions within the meaning of Part III of the Arbitration Act 1996.

10.2 What issues do such disputes typically involve? How are they typically resolved?

Disputes in the mining industry will commonly arise relating to surface land interests and ownership rights – for example, where the ownership of mines and minerals has been severed from the ownership of the surface. More mines and minerals' owners are seeking to protect their interests by pursuing voluntary registration and it is no longer uncommon to encounter separate titles for underground mines and minerals. This could be contentious given that, in granting such titles, the Land Registry will not necessarily notify the surface land title owner that the title has been severed.

Other disputes may arise relating to access rights relating to the use of land as a mine or quarry which, if interfered with, could result in a claim for legal nuisance. Examples of mining activities capable of creating a nuisance include emission of dust or noxious fumes, the discharge of polluting effluents into a river, the creation of noise and vibration, and the projection of debris by blasting.

The health and safety of the employees of a mine or quarry is also a common area where disputes may arise. Employers of workers at a mine or quarry owe a common law duty of care to each employee to take reasonable care for safety in all circumstances and against unnecessary exposure to risk. This duty further extends to cases whereby, under the Occupiers' Liability Act 1957, the occupier of a mine or quarry will owe a common law duty of care to those lawfully visiting the premises.

Pursuant to the relatively recent enactment of the Mines Regulations 2014, effective from 6 April 2015, which specifically relate to health and safety in mines, a mine or quarry owner may now potentially be liable both in common law negligence and for breach of statutory duty. The Mines Regulations 2014, which are not to be construed as derogating from the legal duties owed by an employer to its employees, offers a person who suffers injury by reason of a breach of statutory duty under any mining legislation the ability to recover damages in a civil action.

Planning permission applications and associated challenges are also the subject of disputes in the mining sector.

10.3 Have there been any recent cases of note?

There have been recent attempts to open new surface coal mines in the United Kingdom. These include a coal mine in Highthorn, near Druridge Bay Country Park on the Northumberland coast, which was originally approved by the local planning authority but then overruled by the local government secretary. The proposed operators are currently awaiting a decision from central government as to whether the mine can open.

A further and arguably more significant development relates to the planning approvals granted by Cumbria Country Council in March 2019 for the development of an underground coal mine and processing plant. This decision has been challenged and at the time of writing a date has yet to be confirmed for a judicial review hearing that has been granted.

11 Trends and predictions

11.1 What changes have there been to the mining landscape in your jurisdiction in the last five years?

There have been very few developments in the regulatory and legal framework for the exploration and extraction of mineral resources in the United Kingdom. This reflects the current state of the domestic mining industry and its low position relative to other industries. Countries in which mineral resource exploitation forms a central part of their economy (and a high proportion of their gross domestic product), or countries where mineral resources are undeveloped and in need of rapid modernisation and monetarisation, will often see many and varied changes to their legislation and policy. This is not the case in the United Kingdom.

Production volumes from the mining of non-coal minerals in the United Kingdom have remained more or less the same in recent years. These production volumes are concentrated predominantly on the mining and processing of industrial and construction minerals and other similar quarrying works for both export and domestic use.

Coal production volumes, on the other hand, have fallen consistently in the past three decades. This is a direct consequence of the move away from thermal coal as a primary source of electricity generation. This forms part of the Paris Agreement and the commitments given by the United Kingdom Government to bring all greenhouse gas emissions to net zero by 2050. The Climate Change Act 2008 (2050 Target Amendment) Order 2019 came into effect on 27 June 2019 and made the United Kingdom the first major economy to pass into law these commitments.

11.2 How would you describe the current mining landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

It is expected that construction and industrial minerals will continue to be mined and quarried in the United Kingdom. At the same, coal mining production will continue to reduce, for the reasons already described. The United Kingdom does not hold significant resources of precious metals, base metals or bulks; and neither does it possess a geology rich with the quantities of key battery metals otherwise seen in other countries. All of these mineral types will form the basis of continued global mining production into the future. That said, there are a number of specific anticipated developments creating some attention in the industry. First, the large Woodsmith polyhalite mining and infrastructure project in North Yorkshire is expected to continue its construction and development phases through to full production. And second, on a slightly smaller scale to the Woodsmith mine, the continued work in the Southwest by a number of smaller mine developers, including Cornish Lithium, is creating interest in the potential to commercialise mineral deposits in what was once a large regional mining industry.

12 Tips and traps

12.1 What are your top tips for mining operators in your jurisdiction and what potential sticking points would you highlight?

As with many European jurisdictions, planning and environmental aspects, together with local support are key to navigate to develop a mine.

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.

UK: Mining Comparative Guide