Page 83 - Introduction to Mineral Exploration

66 C.J. MOON & M.K.G. WHATELEY

Private model Turkey. Under this exploration licenses are
granted for 30 months; these can be converted
In the private situation, for example in Britain,
the company’s lawyer will negotiate with a into pre-operation licenses for 3 years and then
private mineral rights owner and obtain an into an operating or mining license. The cost of
exploration or option agreement under which an exploration license in 1992 was 4000 Turk-
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the company will be able to explore for a min- ish Lira (US$0.10) ha , which is refundable
imum period, normally 3 years, and then be when the license is relinquished. The rights of
able to renew the option; or to buy the mineral small miners are protected by a right of denun-
rights for a fixed sum, normally in excess of the ciation under which any Turkish citizen who
free market value. In exchange, the mineral can demonstrate a previous discovery in the
rights owner will receive a fixed annual sum area can claim 3% of the gross profit. The
option payment and compensation for any whole operation is policed by a unit in the geo-
damage to the surface if he or she owns the logical survey, which uses a computerized
surface rights. If the surface rights are separ- system to monitor license areas.
ately owned then an agreement must be made
with that owner. In the case of Britain the Problem countries
rights to gold are owned by the Crown and
must be covered in a further separate agree- In some countries the rule of law is less secure.
ment. There is no legal obligation to report the For example, following the collapse of the
results to government although summary Soviet Union it was not clear who was respon-
drillhole results must be reported to the British sible for, or owned, mineral rights in the newly
Geological Survey. Most physical exploration created countries or in Russia. Deposits had
of any significance and drilling of greater than been explored by state-financed organizations,
28 days duration requires consent from the which were left without funds and effectively
local planning authority. privatized. Although these organizations were
keen to sell rights to the deposits it was by
no means certain that national governments
State model recognized their title. Even when title could be
In the case of state ownership the state will agreed, some governments tore up agreements,
normally own the mineral rights and be able to without compensation, when they realised the
grant access to the surface. In this case applica- value of the deposits. An example of this con-
tion for an exploration license will usually be fusion was the Grib diamond pipe in northern
made to the department of mines. The size of Russia, which was discovered by a junior north
the exploration area may be fixed. For example American company in 1996 and worth more
the law in Western Australia limits a 2-year than $5 billion in situ (see section 17.1.6). The
prospecting license to 200 ha although a 5-year junior was in a 40% joint venture with a
exploration license can cover between 10 and Russian expedition which held the license. Sub-
2
200 km . Annual work commitments on the sequent to the discovery the junior company
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former are $A40 ha and $A300 km on the was unable to get the license transferred to a
latter. Mining leases are granted for a renew- new joint venture company between them and
able period of 21 years with a maximum area of the Russian expedition as had been previously
1000 ha. Normally in areas with state owner- understood. This was probably partly because
ship a full report of exploration results must be the assets of the expedition had in the mean
filed to the mines department every year and at time been taken over by a major Russian oil
the termination of the lease. Such reports often company and a Russian entrepreneur. A few
provide information for future exploration as joint ventures have been successful under these
well as data for government decision making. conditions, notably those in which govern-
ments have a significant stake. A company 67%
owned by the government of Kyrgyzstan and
New mineral laws
33% by Cameco Corporation of Canada (now
An example of a new mineral law designed Centerra Gold) commissioned, and operates,
to encourage exploration is the 1985 law of the large Kumtor gold mine in central Asia.