How to Buy Mineral Rights

by | Oct 30, 2014 | Business

For beginning investors, there are a few things you should know before you buy mineral rights.

There are three types of rights to resources on a property: mineral, surface, and fee simple. Surface rights refers to all of the natural resources above the ground, and mineral rights refers to all of the valuable materials below the ground. Fee simple rights refers to property owners who own both mineral and surface rights, as well as the area/air above their property.

What Are Minerals?
The minerals in question for most mineral rights cases include:

  • Fossil fuels (oil and gas)
  • Precious stones (like gems and quartz)
  • Valuable rocks (like granite and peat)
  • Raw minerals (like coal or gold)

Anything that can be mined from below the ground is considered a mineral. If you want to buy mineral rights, you should begin by researching public records to find out which properties are on the market. After finding a property whose mineral rights are up for purchase, follow these steps.

1. Get familiar with how your state defines “mineral” and the laws that govern it
The legal definition of a mineral will vary from state to state. For example, in Pennsylvania, oil and gas are not technically defined as part of a holder’s mineral rights, unless language in the deed specifically states it. Be careful and become familiar with the definitions in the state where the property is located. Additionally, you should also familiarize yourself with mineral rights purchasing laws, which varies slightly from state to state.

If you want to buy mineral rights, you should save yourself time later by researching state and federal drilling and mining regulations. If you do not have the capital to invest in procuring your minerals, you may want to reconsider your choices.

2. Once you find a buyer, negotiate the terms to purchase their mineral rights.
Why would someone with minerals under their property be interested in selling their mineral rights? There are several reasons, but the two most common reasons are: profit from the sale and lack of capital (or interest) to mine it themselves. When you negotiate the terms to purchase mineral rights, you must outline many factors, not limited to the amount of mineral acres, what types of minerals you want to exploit from the property, compromises on surface property damage, and some owners may require your measures to avoid environmental damage.

Once negotiations are complete, you and the property owner draw up a mineral rights agreement. After both parties declare their understanding and sign the document, the mineral rights belong to you.

Does Buying Mineral Rights Seem Too Complicated?
If finding properties with mineral rights, settling negotiations, and drawing up agreements seem too complicated for you, but you are still interested in owning mineral rights, you should work with a mineral rights real estate company.

H&M Land and Mineral has done nothing but sell and buy mineral rights for several decades. Contact a representative today to learn more about your mineral rights purchasing options.

Recent Articles


Popular Tags


Related Posts