What are Mineral Rights?

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

How Do Mineral Rights Work?

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 Do Mineral Rights Matter?

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.

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Paul Tracy
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.