Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Mineral Rights

What it is:

Mineral rights are a landowner's rights regarding natural resources located on his or her land.

How it works (Example):

When an individual buys or owns a piece of land, there is the possibility that the land may contain valuable minerals and or natural resources like precious metals (for example, gold and silver), iron ore or oil. Mineral rights give ownership of these resources to the landowner, as well as the right to gain monetarily (in whole or in part) from the sale of such natural resources.

For example, if a landowner discovers a vein of silver on the land, if he or she also owns the mineral rights associated with the land, the landowner will profit from the sale of the silver.

Why it Matters:

Landowners can retain mineral rights in connection with the land, or they can sell them to a third-party, for example, a mining or gas exploration firm. In mineral rich areas, the value of mineral rights should be taken into account when completing a real estate transaction.