Never miss a story

Get subscribed to our newsletter


×
Tips on how to buy mineral rights. Pixabay

BY PETER YORDANOV

If you have got an offer from a mining company to buy mineral rights associated with your property then it is essential to first know, if you own them in the first place. Mineral rights are separately sold from owning land. So, what are mineral rights, and how to buy mineral rights if you don’t have them? Ensure if the earlier owner leased or sold them. Here, you will understand what are the chances and risks involved in the US market of mineral rights.


What are mineral rights?

Owning Mineral rights means bestowing the ownership of the extraction, exploring, and developing of minerals below your property surface. The owner can excavate rock minerals like copper, gold, gas, coal, or oil.

Follow NewsGram on Instagram to keep yourself updated

Types of mineral rights

Mineral rights apply to oil, geothermal, gas, and hard rock minerals. They apply to leasable, locatable, salable, new mineral discoveries, and meteorite minerals. If you know the types of mineral rights, you will be able to buy the best suitable one for you.

The 4 types are:

Mineral rights – These rights offer ownership of the minerals below the ground. Subsurface rights can get shut-in payments, royalty, and lease. These rights are applicable in the gas and oil industry. Shut-in payments are paid royalties by the gas and oil company to sustain a lease on present unproductive assets of minerals.

Surface Rights – When ownership rights are given to surface minerals only, they are called surface rights. Subsurface minerals are excluded from these rights.


There are different types of minerals rights. Pixabay

Royalty Rights – Here the owner is an investor who gets royalty payments on mineral rights investment. They get an income share on the generated minerals that are in the leased property.

Oil and Gas Rights – The gas and oil makes it difficult to outline mineral right by a specific region or well. The oil is fluid and flows into joints and faults. The reserves thus can spread to adjoining land tracts and subsurface. Such resources are called fugitive resources which gives a right of the rule to capture. If the right is on a certain property, then the right is valid from any adjoining property on the fluid flown from this property.

How do the rights work?

Mineral rights provide the owner permission to make use of the land surface for accessing the minerals present for production and exploration. The mineral rights owner can sell, give as a gift or lease them on a property. They can be passed down from a generation to another regardless of ownership changes of the associated property. They, however, come along with respective taxes.

How to buy mineral rights?

To buy mineral rights, there are plenty of opportunities that the US offers. There are on the rise with the selling of the Federal lands. There are several options to lease, buy, and make an investment in hard rock royalties, gas, and oil mineral rights.

By navigating ownership structures, types of mineral rights, and abiding by laws, you can buy mineral rights. However, doing this on an individual level can get difficult and confusing. Hiring a specialist to assist you in calculating the value of mineral rights precisely will help you prevent unnecessary frustration and costly mistakes in the US mineral rights market.

These professionals are:

  • Mineral rights consultant
  • Lawyers and realtors
  • Gas and upstream oil companies
  • Mineral rights locations

Some factors to keep in mind when buying mineral rights


Buying mineral rights includes a complete procedure. Pixabay

  • Where to buy-Mineral rights purchases are done through brokers, sales, listings, auctions, negotiated sales, sealed bids, and direct from mineral owners.
  • The process of buying mineral rights is based on the source of purchase.
  • Due diligence is vital.
  • Having sufficient cash is also essential.

The buying process involves:

Plan – An acquisition plan with the location of purchase should be sorted first.

Browse – The easiest way to acquire mineral rights is through an auction house. This could be through sealed bids, auction frequency from weekly to bi-weekly, online bidding, and negotiated sales.

Research – Do your evaluation and finalize the location of minerals availability, ownership verification, and amount of interest.

Offer/Bid – Submit your offer.

Pay – Through wiring, transfer the respective funds to get the mineral deed signed and sent to the county clerk or you.

Transfer – Transfer of ownership of minerals is done in your name. You get to pay status.

ALSO READ: How To Buy The Right Final Expense Policy For Your Parents?

Manage – Handle the new minerals by keeping records.

Due diligence – This step is essential to avoid a bad investment or wrong ownership.

Conclusion

US laws on mineral rights and the policies have evolved by state and through the federal system. For investors, mineral rights buying, leasing, and royalties need expertise. Knowing different types of mineral rights and buying them can help you make money and carry the exploration, excavation, development, and other works of minerals found on and under the surface of a property. They pass on to generations with taxes.


Popular

by devakinanda ji

Bhārata bhumi is conducive for the practice of one or all the paths enjoined by the Vedas

By Devakinanda Ji

Derived from the Sanskrit word muc ("to free"), the term moksha literally means freedom from samsara, release from the cycle of rebirth impelled by the law of karma. The transcendent state attained as a result of being released from the cycle of rebirth.

Keep Reading Show less
Wikimedia Commons

The five rockets are in the project report stage and would come into operation in the future, said N Sudheer Kumar, Director, Capacity Building Programme Office (CBPO), Indian Space Research Organisation (ISRO).

The Indian space agency is working on a fleet of medium to heavy lift rockets with a carrying capacity ranging from 4.9 ton to 16.3 ton, said a senior official. The five rockets are in the project report stage and would come into operation in the future, said N Sudheer Kumar, Director, Capacity Building Programme Office (CBPO), Indian Space Research Organisation (ISRO). He was speaking at the International Space Conference and Exhibition, organised by Confederation of Indian Industry (CII) in virtual mode recently. When that happens ISRO can not only launch its own communication satellites but also enter the global communication satellite launch market.

Kumar also said ISRO is working on upgrading Geosynchronous Satellite Launch Vehicle-Mk III (GSLV-Mk III) which can carry up to four ton to Geo Transfer Orbit (GTO). Normally rockets eject the communication satellites into GTO. From GTO the satellites will be taken to geostationary orbit by firing their engines. India uses Ariancespace's Ariane rocket to orbit its communication satellites weighing over four ton. According to Kumar, ISRO is also working on upgrading the lifting capacity of GSLV-Mk III to six ton and 7.5 to GTO.

Keep Reading Show less
wikimedia commons

Kalamkari painting on a cotton cloth

In the recent past, Kalamkari has suddenly gained prominence in the wardrobes of Indian women. Commercial hubs in the city are filled with mannequins posing in kalamkari blouses, or sarees stretching out for yards on hangers.

As the name suggests, 'kalamkari' means 'craft from a pen'. Artisans draw on cloth with a pen, and colour it in with paints. This art form originated from the Mughal era and many of the scenes that artists choose to draw are scenes from Mughal gardens or palaces.

Keep reading... Show less