Mineral rights are legal ownership of resources contained in the earth, such as oil, gas, coal, gold, etc. These rights can be complex, primarily because they don’t always belong to the person who owns the land above.
We will talk about Mineral Rights 101, how it works, what it means, and your rights on the property for mineral rights.
Whether you’re curious about minerals on my property or what mineral rights are worth, this guide will cover the basics.
To begin with, mineral rights are just the laws about who gets to dig up minerals and profit from the land below.
In some regions of the world, owning land means owning the mineral rights on title, but that’s not the case everywhere.
The laws vary by location, and it is essential to determine whether you own mineral rights on a piece of property or someone else does.
Here are how mineral rights work with, for me, an example from Kenya but with broader thoughts such as what property tax on minerals, not owning them, and so on.
Ownership of Minerals in Kenya
The law in Kenya is very clear about who owns minerals. As per Article 62(f) of the Constitution, the National Government owns all minerals beneath six feet below the surface of the Earth.
This means the state has full ownership over these resources, regardless of land ownership above ground.
For instance, let’s say you own land and a mine on it or valuable minerals below it.
In that scenario, you do not automatically possess mineral rights on your land. It’s the government that has those rights, not the landowner.
This rule also means that there are no private mineral rights in Kenya. Landowners cannot claim the minerals, seek to receive royalties from mining companies or sell mineral rights to anyone else.
If the government or a business wants to take minerals from your property, they do not have to ask you for permission to access the mineral property below the surface.
They will still need it, but the government may need to compensate you for the visible destruction above the ground.
This differs from countries where mineral rights can be owned separately from land or vice versa.
In Kenya, you do not even have mineral rights to your property. This strict state ownership informs how the rights to minerals on the property are treated, including the taxability of those mineral rights, which we will address later.
How to Obtain Mineral Rights on Your Property
Although the title remains with the Kenyan government, companies or individuals can apply to use those minerals through a legal process.
If somebody requests to explore or mine for minerals on my property, there is a process that must take place.
How do you own your Mineral rights in Kenya?
If you have a private piece of land in Kenya, you cannot own mineral rights because they belong to the government.
But you can also request a license to search for or extract minerals on the state’s behalf. Here’s a short walk-through:
Submission of Application– If validated, apply for a prospecting or mining license through the Mining Cadastre Portal, providing land coordinates and accompanying documents.
Ask a Landowner for Permission– If it isn’t you, you must put your land and all its access routes to work.
3 In Premises Essential Approvals– National land commission clearance (in case public/community land) and environmental and other state agencies
Final Approval– Your application is reviewed by the Mineral Rights Board, and within 90–120 days, the Cabinet Secretary approves or rejects it.
You do not own the mineral rights on the title if granted; you have only been authorized to use them.
The mineral rights remain the government’s property, and you may pay the state a tax on mineral rights or royalties as part of the agreement.
Determining the Value of Mineral Rights
Even if landowners in Kenya do not own mineral rights, it is essential to know the value of mineral rights.
In other parts of the world, there is an accepted methodology for calculating this value, and with a few tweaks, it would work in Kenya. The most important one is the Discounted Cash Flow (DCF) model.
This estimates how much money could be generated from mined minerals in the future and discounts it to today’s value. When comparing sale prices with similar mineral rights in other deals.
Mineral Rights in Real Estate
Knowing the difference between surface rights and mineral rights in real estate Surface rights (which refer to everything above the ground, including buildings, crops, or trees) belong to the landowner.
Landowners in Kenya retain these rights and have the right to receive compensation for any exploration or mining activity taking place on their land.
For example, if a company constructs roads or digs on your private land, they must compensate you for the damage.
But, as noted above, the state owns mineral rights to my property. This division implies that the value of the real estate is primarily based on the surface rights and whatever contracts are arranged for access to the land.
Most mineral rights on residential or commercial property have limited impacts on property value.
Because landowners don’t own the minerals under my property in Kenya, having valuable resources underground is not directly value-accretive.
In those countries where private mineral rights are available, owning mineral rights without owning the land, or both, can substantially raise property value.
However, in Kenya, the absence of mineral rights keeps the value of a piece of land tied to its surface-level use, like agriculture or housing.
The government can also compensate for damage to infrastructure or loss of crops, which can alleviate any potential loss of income due to mining operations.
For example, if a mine on your land interrupts your farming, your compensation may address the loss of crops or damage to the land.
This doesn’t mean your property is worth more because of the minerals that mitigate the adverse effects.
It is rare to see mineral rights noted on a title for real estate deals in Kenya, as they automatically go to the government.
Instead, buyers and sellers care about surface rights and the practical usage of the land.
This distinction will help you understand what you purchase when acquiring mineral property in Kenya.
How to find Land with Mineral Rights?
In some areas, land with mineral rights is harder to find. In some places, such as the United States, the mineral rights beneath a property can be owned separately from the surface land.
To find such land, you can investigate property records at local government offices or hire a layer in Kenya to confirm whether mineral rights accompany the title.
Geological surveys and maps published by government agencies can also reveal areas endowed with minerals, such as oil or coal.
The issue is that the government owns all mineral rights six feet below my land in Kenya.
If you’re in Kenya, finding land with minerals could involve searching for known deposits, but you won’t own the mineral rights on the title; the state owns it.
How do you Know if Your Land has Minerals?
So, how do you know if your land has minerals? Research geological data.
Government agencies, such as Kenya’s Ministry of Mining, provide maps and reports that make clear where minerals are likely to be found.
You can also employ a geologist to survey your land and test for resources such as gold or titanium.
You might see signs like odd-looking rocks or discolored soil that could indicate minerals on my land, but the best way to find out is through professional analysis.
In Kenya, even if you find a mine on your property, the mineral rights are state property, so you wouldn’t stake claim yourself but would report it to the government.
How Much Does it Cost to Get a Mining License in Kenya?
How much it costs to obtain a mining license in Kenya varies with the type and scale of the operation.
The fees for a large-scale mining license are KSh 500,000 and annual ground rent of KSh 2,000 for every hectare, but not less than KSh 500,000, which were updated in September 2024.
Micro permits are cheaper; probably a KSh 50,000 application fee, figures vary, plus lower per hectare rent.
Additional costs include gazetting fees and environmental compliance, compensation for landowners, and possible royalties or taxes on mineral rights to exporters (e.g., 70% to the national government, 20% to the county, and 10% to the community).
Foreign investors may also require an investor permit. These fees are paid via the Mining Cadastre Portal, and since the costs may change, precise values should be verified with the Ministry of Mining.
What are the Mineral Property Taxes in Kenya?
Chapter 6 of the Mining Act of 2016 provides the Kenyan national government with the laws governing mineral taxes, under which national laws govern mineral rights due to the state ownership of mineral rights established in Article 62(f) of the Constitution.
Mineral companies must pay various taxes and fees, but landowners don’t directly incur the costs, as they don’t own the mineral rights to their land. Key commodity taxes include royalties that may vary by commodity type:
Royalties– Mining companies pay, e.g., 5% on the value of gold sold, 70 percent the national government, 20 percent the county, and 10 percent the community.
Corporate Income Tax– 30% on profits for resident mining companies and branches.
Ground Rent– KSh 2,000 per hectare per year (Minimum KSh 500,000 for large-scale operations).
Export taxes– $175 a metric ton on iron ore; mineral and policy dependent
Additional Charges– Environmental fees, 16% VAT on supplies, export permit royalties.
Effects on Landowners– No taxation; only compensation for surface damages
FAQs
Do I own the minerals under my land?
You do not own mineral rights on your property in Kenya. According to the Constitution, all minerals beneath six feet of the earth are owned by the National Government.
This means that when landowners only have control over mineral rights, the state owns the minerals above and belowground of my property, such as small buildings or agricultural land. You cannot directly claim or benefit from these resources.
Can someone own mineral rights on my property?
No one can own the mineral rights at my property because I cannot. However, mining companies and third parties can apply for licenses to explore or extract minerals.
They must get your written approval as the land owner and authorization from the government. So, whereas not owning mineral rights is the rule, others can work and use them with permission.
Are mineral rights considered personal property?
In Kenya, mineral rights are not considered personal property. They are treated like publicly controlled government resources, not like something you can own or sell, like a home or car, unlike in countries where individuals can own these rights attached to title to land. They stick with the state, regardless of whose land they’re on.
Can mineral rights be sold?
You can’t sell mineral rights in Kenya because you don’t own them; they belong to the government. However, state approval is required to transfer that license to another party; state officials deny the right to transfer it, except in the case of a permit to mine. This is not about owning mineral rights on a property; it’s about who gets to use them.
Does owning mineral rights add value to a property?
Mineral rights don’t correlate directly with property value in Kenya because landowners don’t own the minerals on my property.
THe mineral rights mean nothing to you; they go to the state or the license holders. But if extraction does occur, you could be compensated for surface damage, such as damaged crops, which can help offset expenses and mitigate your losses.
Can you keep mineral rights when selling a property?
No, you can’t retain ownership of mineral rights when selling property in Kenya because they never belonged to you; the state owns them.
When you sell off a plot of land, you only transfer the rights to the surface to the new owner. The mineral rights on the title remain with the government, so the buyer doesn’t get those.
How do you determine if your land has minerals?
To see whether minerals exist on my private land, I can consult geological maps published by Kenya’s Ministry of Mining indicating areas with gold or titanium. The other alternative would be to hire a geologist to test your land.
And even if you discover something, the state owns the mineral rights on your property, so you’d have to inform them, not claim the minerals.
