The unique environment of international mining law
Before humans discovered fire, we were racing for resources. In fact, we used resources to control fire itself, extracting materials such as flint, obsidian, and ochre as early as 82,000 years ago in Morocco, evidenced by Nassarius shells.
In the twenty-first century, the same instrict has shapeshifted into international environmental and natural resources law. Specifically, a subsect of law that drills down on the extraction, ownership, and regulation of mineral resources.
A nation’s prospects are often judged by its access and ability to capitalize on natural resources that sustain communities, power energy grids, and drive economic growth through trade. However, the development of mining law presents as many challenges as opportunities, including issues such as land access, safety regulations, royalties, and environmental and social impacts.
In an era of heightened intrigue in alternative resources and the polarization of environmental policies in public discourse, a comprehensive understanding of the international legal mining scene is essential.
Nineteenth-century privatization
By virtue of its operability, mining law is a complex, independently developed branch of common law relating to real property.
The Code of Hammurabi is one of the oldest legal codes addressing property and resource laws in 1754 BCE, with laws that apply to environmental stewardship and land leases. One of these, Law 53, reads:
"If a man neglects to strengthen his dyke and it floods the field, he shall compensate for the damage."
Mining takes deep roots in the coal industry, with the Coalbrookdale mines in England being some of the gears of the Industrial Revolution. The gold rushes in California (1848), Australia (1851), and South Africa (1886), alongside the financial utilization of gold and silver, paved the way for the practice of private appropriation.
The “free access principle,” which allowed individuals and companies to explore and extract minerals on federal lands without paying royalties to the government, was codified in the United States through the General Mining Law of 1872, providing a framework for mineral rights on federal lands in the Western Hemisphere. This basic approach has remained intact for hardrock minerals today, excluding petroleum and “common” resources such as gravel.
Let’s take a closer look at the two central points of the General Mining Law of 1872:
Property rights must be issued under the statute to anyone who completes the necessary steps to receive the rights.
Issuance of property rights does not require the payment of more than nominal amounts to the government.
These stepping stones ensured public access and protection against rivals to the selected, eligible parcels. However, why would the U.S. government conduct such intensive land giveaways? The answer lies in revenue generation and vulnerability of extraction, according to Professor Morriss from the A&M Energy Law Department.
“Free access methods of allocation of public resources were an innovation,” Morriss said, viewing mining land grants as an investment for locating valuable resources.
Other legal foundations of modern mining include:
South African Mining Laws (1910): Regulated diamond and gold mining, laying the groundwork for the apartheid-era economy.
International Mining Codes (Post-1950s): Organizations like the International Labour Organization (ILO) and the United Nations began setting global standards for worker safety, environmental protection, and resource governance.
Notable differences in legal frameworks
Digging into the subject further, we find inherent differences in the life cycle of mining products, considering the raw materials are “found” in natural spaces rather outsourced from the original manufacturers. The bonuses, regulations, and provisions governing these and other processes are bound to be different around the world.
The insights below are understood from the Intergovernmental Forum in 2018:
In mineral-producing developed countries, say Australia, Canada, and the U.S., mining policy and law are under state, with territorial acts becoming increasingly federally controlled due to environmental sensitivities from nearby communities. Notable laws in these areas include indigenous community rights, such as Australia's Native Title Act.
Mineral-producing developing countries, including African, Latin American, and Asian countries where mining companies operated under colonial charters on a semi-exclusive concessional (reward) basis, legislation largely hinders foreign investment in mining, with the state taking a controlled interest. For example, Zambia's Mines and Minerals Development Act emphasizes government ownership of resources (notice the private vs. public approach of legislation based on the overhead legal system here).
Trasition country jurisdictions (these include post-communist Mongolia, Kazakhstan and Uzbekistan), have seen a shift from state-controlled sector to market oriented policies. Of course, Eastern European counties, Asian Republics, and Russia have many differences in their overall legal and regulatory systems. Yet, the forum states a general uncertainty (perceived high risk) in mining investing due to insufficient maturity and modernization of the market.
Classifying extraction
Mining, being a capital-intensive industry, requires a nearly “blind” extraction of low-grade ore. This process largely depends on fixed location estimations, meaning the legal frameworks for the sector must secure property rights for goverments encouraging investment (Morriss 262).
Before any rights can be granted, the intended activity is classied into four categories:
Petrochemical exctraction, which involves the extraction of hydrocarbons, such as oil and natural gas, which serve as raw materials for producing petrochemicals like ethylene (used in synthetic materials) and propylene (used to make other chemicals, such as plastics and gasoline). Regulations governing this activity include the Petroleum Act of India, 1934, and similar laws in petrochemical-producing nations.
Solid mineral mining, which pertains to the extraction of solid minerals such as metals (gold, silver, copper) and non-metals (coal, phosphate). For example, in South Africa, the Mineral and Petroleum Resources Development Act (MPRDA) regulates solid mineral mining, balancing resource use with environmental and community rights.
Technogenic mining is the extraction of minerals from anthropogenic (human induced) sources, such as mining waste, tailings, or industrial by-products. Russia’s Law on Industrial and Consumer Waste Management provides a framework for resource recovery and waste reduction.
Lasty, open-pit extraction (OPE), which is a surface mining technique involving the removal of large quantities of overburden to access ore deposits near the surface. These require significant landscape alteration that may induce ecological impact. Therefore, in Canada, the Environmental Assessment Act mandates comprehensive reviews for open-pit projects.
Commercial discovery bonus and subsoil usage rights: Uzbekistan case study
To narrow down our focus, let’s take a look at the mining duties, royalties, and taxes in Uzbekistan–a transition economy with the world’s fourth-largest gold reserves.
Historically, a "commercial discovery bonus" was required for subsurface users discovering viable deposits, typically calculated as a percentage of the world market value of the recoverable reserves identified. In Uzbekistan, the commercial discovery bonus was eliminated as part of reforms introduced by Presidential Decree PP-6319, dated October 6, 2021. This decree, effective from January 1, 2022, introduced an annual license fee for the use of subsoil resources and canceled the commercial discovery bonus and subscription bonus.
These reforms aimed to streamline the process of obtaining subsoil usage rights, making it more transparent and competitive. The introduction of online auctions and the removal of certain bonuses were part of broader efforts to attract investment and improve the efficiency of resource management in Uzbekistan.
Under Uzbekistan’s Law on Subsoil, use of subsoil is allowed based on a license (permit), with adoption of long-term programs in recent years to accelerate the development of the remaining resources from the 20% of territory that has been explored thus far (Dentos).
The overall process to gaining mining rights from the two authorized state licensing bodies–EcoCom and GeoCom–is relatively straight-forward: users either pursue a “first come, first serve” approach, bid in online auctions, or place tenders, with no limit on the number of licenses obtained. These entries depend on the type of activities and structures which are targetted, which also vary by term of use (from 5 years to indefinite). The activities include:
geological exploration,
production mining,
use of technogenic mineral formations,
construction and operation of underground structures not related to mining,
formation of protected geological objects,
collecting samples of gemstone raw materials,
paleontological remains and other geological collection materials.
Environmental and social considerations
The recognition of mining’s environmental impacts has led to the development of reclamation science, focusing on restoring ecosystems affected by mining activities. In the US, the Office of Surface Mining Reclamation and Enforcement crafts policy to address public safety and environmental issues, such as air pollution, soil and water contamination, habitat displacement, related to coal mining and land reclamation.
References
Morriss, Andrew P. "Hardrock Homesteads: Free Access and the General Mining Law of 1872." Texas A&M Law Scholarship, 2012, scholarship.law.tamu.edu/cgi/viewcontent.cgi?article=1133&context=facscholar
Van Wagenen, T. L. International Mining Law. General Mining Association, 1890, www.loc.gov/resource/gdcmassbookdig.internationalmin00vanw/?sp=21&st=image&r=-0.396,0,1.793,1.51,0.
Bureau of Land Management. "About Mining and Minerals." BLM.gov, www.blm.gov/programs/energy-and-minerals/mining-and-minerals/about.
Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF). Modern Mining Law and Policy: Accountable, Equitable, and Transparent Governance of Mineral Resources. 2018, www.igfmining.org/wp-content/uploads/2018/11/2018-AGM-_-Session-2-_-Modern-Mining-Law-and-Policy-_-3.pdf.
Lexology. Spotlight: Mining law in Uzbekistan." Lexology, 10 Nov. 2020, www.lexology.com/library/detail.aspx?g=4abbaab2-6afe-4def-bd9b-08eb888e48a7.
