An issue that can cause considerable head-scratching when drafting a compulsory purchase order (CPO) for an acquiring authority (AA) is whether or not to apply the minerals code (“the code”) to it.
The code is contained in Schedule 2 to the Acquisition of Land Act 1981 and is authorised by section 3. It only operates if incorporated by the CPO. Incorporation of it, in appropriate circumstances, may be necessary if the AA does not wish to purchase minerals under a CPO but wants to ensure that it can take steps to protect a scheme from the effects of mining operations and hazards that may arise from them.
The issues
Many areas in the UK are rich in mineral deposits. Minerals are present in both rural and urban areas and may be located below ground (sometimes at significant depth) or at or near the surface. Although historically it has generally been the practice to incorporate the code in CPOs in coal mining areas, it may be equally appropriate to apply the code in other areas where minerals are present.
The definition of minerals under the code is wide and includes coal, ironstone, slate and other minerals. When drafting a CPO, the AA must consider whether minerals are present at or near the surface or below ground and whether to apply the code in the circumstances of the case.
If the AA fails to incorporate the code in circumstances where it was appropriate to, the AA will purchase the underlying minerals when it exercises CPO powers. Minerals fall within the definition of land for the purposes of the CPO and this will transfer the minerals to the AA on acquisition. This means the AA would need to compensate the minerals owner for its loss of right to mine the minerals, which might be a significant financial burden. It also increases the likelihood of the minerals owner objecting to the CPO.
If the minerals can remain with the minerals owner, future extraction of them may be possible and an objection to the CPO avoided. Incorporating the code within a CPO can allow the surface land to be purchased without the underlying minerals, avoiding sterilisation of the minerals while providing a degree of protection for the AA.
ODPM Circular 06/2004 – Compulsory Purchase and the Crichel Down Rules – appendix U, paragraph 4, advises that the mining code should not be incorporated automatically or indiscriminately. The circular advises AAs to consider the matter carefully before including the code, having regard to the fact that existing statutory rights to compensation or repair of damage might provide an adequate remedy in the event of damage to land, buildings or works occasioned by mining subsidence.
Similar advice is provided in the equivalent Welsh Circular, the National Assembly for Wales Circular 14/2004 at appendix Q.
The code in detail
The code is based on the mining code in the Railways Clauses Consolidation Act 1845 and enables an AA to purchase, in a CPO, the surface land without the minerals present. The code does, however, include possible provision for the minerals not to be worked by the minerals owner, except after giving notice to the AA and an opportunity for the AA to acquire them if acquisition is considered necessary.
The important provisions of the code appear in Parts II and III (see box). Incorporating the code does not of itself prevent the minerals owner working the minerals within a specified distance of the land to be acquired under a CPO. However, it does enable the AA, if the CPO is confirmed, to serve a counter notice preventing the minerals being worked if the AA pays compensation. The prescribed distance for the purposes of the code is 40 yards or such other distance as may be specified in the CPO.
Part II of the code provides that the AA is not entitled to any mines and minerals under the land comprised in a CPO except to the extent that express provision is made for their purchase. However, this does not apply to minerals necessarily extracted or used in the construction of the undertaking (the works).
Part III permits mines and minerals to be worked under or within the prescribed distance of the land acquired. However, the party wishing to work the mines must give 30 days’ notice to the AA, which must then decide if the workings will damage its interest and, if so, whether it is prepared to treat and pay compensation for the minerals it considers should not be worked.
If the AA is unwilling to purchase the minerals, the minerals owner may work them subject to safeguards. If any damage or obstruction is caused to the AA’s works arising from improper working of the mines, the owner of them must repair the damage or obstruction.
The AA is also enabled, without waiting for the owner to perform this duty, or in the case of default, to repair or remove the damage or obstruction and recover its expenses from the owner in the High Court.
Part III of the code contains ancillary provisions in relation to severed mines, rights of entry for the AA and the AA undertaking remedial works if the minerals owner fails to comply with a notice from the AA to undertake them.
Important considerations
The decision about whether or not an AA should incorporate the code in a CPO is an important one and needs to be considered in the context of the nature of the scheme.
The AA must consider various factors, including:
● the presence of minerals;
● the nature and location of them;
● the potential impacts that mining operations may have on the AA’s scheme;
● the costs of compensation should a minerals owner be denied the ability to extract them; and
● the advice in ODPM Circular 06/2004 and NAW Circular 14/2004.
If an AA fails to incorporate the code, the minerals will transfer to the AA and this may bring a potentially significant compensation burden. In many cases where minerals are present, it may be appropriate to incorporate the code as this will provide a degree of flexibility, enabling minerals to be extracted unless the AA considers that mining should be prevented and compensates the minerals owner accordingly.
The minerals code: key provisions
Part II
2(1) The acquiring authority shall not be entitled to any mines under the land comprised in the compulsory purchase order unless they have been expressly purchased, and all mines under the land shall be deemed to be excepted out of the conveyance of that land unless expressly named and conveyed.
(2) Sub-paragraph (1) above shall not apply to minerals necessarily extracted or used in the construction of the undertaking.
Part III
3(1) If the owner of any underlying mines or minerals desires to work them, he shall give the acquiring authority notice in writing of his intention to do so 30 days before the commencement of working.
(2) On receipt of the notice the acquiring authority may cause the mines to be inspected by a person appointed by it for the purpose.
(3) Subject to paragraph 4(1) below, if the acquiring authority considers that the working of the underlying mines or minerals is likely to damage the undertaking, and is willing to compensate the owner for all or any part of the mines, the owner shall not work or get them.
(4) If the acquiring authority and the owner do not agree on the amount of compensation, the question shall be referred to and determined by the Upper Tribunal.
4(1) If before the expiration of 30 days from the receipt of notice under paragraph 3(1) above the acquiring authority does not state its willingness to treat with the owner for the payment of compensation, the owner may work any of the underlying mines for which the acquiring authority has not agreed to pay compensation by proper methods and in the usual manner of working such mines in the district in question.
(2) If any damage or obstruction to the undertaking is caused by improper working of the underlying mines:
(a) the owner of the mines shall forthwith repair or remove the damage or obstruction at his own expense,
(b) the acquiring authority may, without waiting for the owner to perform his duty, or in case of his default, repair or remove the damage or obstruction and recover its expenses from the owner in proceedings in the High Court.
Richard Foster is senior legal executive consultant and Martin Damms is legal director in Pinsent Masons’ planning and environment, energy and infrastructure team
