Mining Laws And Regulations 2021

• Published date: 16 September 2020
• Subject Matter: Employment and HR, Energy and Natural Resources, Health & Safety, Mining, Oil, Gas & Electricity
• Law Firm: Milbank LLP
• Author: Mr John Dewar and Emily Whittaker

1. Relevant Authorities and Legislation

1.1 What regulates mining law?

Regulation of the mining industry follows the devolution of certain powers relating to mining from the government of the United Kingdom to the governments of Scotland, Wales and Northern Ireland. As such, some law applies to the whole of the UK, while some applies only to a particular part of the UK.

The principal sources of law in the UK are Acts of Parliament and associated statutory instruments, common law (essentially case law) and European Union law with effect in UK domestic law (some of which will be replaced by new domestic law following the UK's withdrawal from the EU). Mineral leases, planning consents and environmental consents will also contain terms and conditions which mine operators need to comply with, and many of these will be tailored to the particular project and the nature and location of the operations, imposing, for example, restrictions on traffic movements, limits on air and noise emissions and the need to decontaminate and restore the site after closure.

The UK regulatory regime for mining also varies according to the mineral in question.

1.2 Which Government body/ies administer the mining industry?

The Government and to some extent local authorities set the policy framework within which the mining industry operates. The general position under the law of property is that landowners own the minerals beneath their land and are able to license the right to exploit them to third parties. However, in some cases, all rights to search for and exploit minerals have been reserved for the Crown; for example, all naturally occurring gold and silver (historically referred to as Mines Royal) vest with the Crown, as well as oil and gas and all minerals occurring on and beneath the seabed within 200 nautical miles of the coast. Licensing of exploration and exploitation of these minerals is either conducted on behalf of the Crown or by governmental bodies established for this purpose.

The ownership of the majority of unworked coal and coal mines in the UK (excluding Northern Ireland) belongs to the Coal Authority. The Coal Authority, established under the Coal Industry Act 1994, is an executive, non-departmental public body whose responsibilities include, amongst others, the licensing of coal mining operations, the administering of coal mining subsidence damage claims, and bearing the liability for contaminated mine water caused by historic coal workings. The Coal Authority sometimes owns non-coal mines and minerals in coal mining areas.

The exploitation of gold and silver is overseen by the Crown Estate and, in Scotland, the Crown Estate Scotland (together, TCE, established through the Crown Estate Acts of 1956 and 1961) through Wardell Armstrong, the Crown Estate Mineral Agent. TCE also manages the seabed to the 12-nautical-mile territorial limit and other rights including non-energy mineral rights out to 200 nautical miles in all parts of the UK. In this capacity, TCE grants licences for the extraction of marine sand and gravel resources from the seabed, as well as such minerals as salt, potash and polyhalite occurring beneath the seabed.

The Oil and Gas Authority (OGA), a State-owned company limited by shares, was formally established as an independent regulator under the Energy Act 2016 and is responsible for the licensing of offshore and onshore oil and gas operations in the UK, including exploration, production, decommissioning and abandonment.

In Northern Ireland, the Mineral Development Act (Northern Ireland) 1969 vested most minerals in Northern Ireland in the Department of the Economy. This enables the government of Northern Ireland to grant exploration and production licences in its own name. The main exceptions to this right are (a) offshore oil and gas deposits which are administered by the OGA, (b) gold and silver which vest in the Crown, (c) 'common' substances (including aggregates, sand and gravel), and (d) minerals which were being worked at the time of the 1969 Act.

As well as a licence to exploit minerals, planning consent is required to authorise any development works from the local mineral planning authority (MPA).

The Health and Safety Executive (HSE), formed in 1975, enforces health and safety regulation in England, Wales and Scotland, together with local authorities and other authorised bodies. In Northern Ireland, health and safety regulation is enforced by the Health and Safety Executive for Northern Ireland.

Environmental regulation is undertaken by the national environmental regulators and, in some respects, the local authorities. The principal environmental regulator for England (and in some subject areas across the UK nations) is the Environment Agency (EA), formed under the Environment Act 1995; for devolved matters in Scotland it is the Scottish Environmental Protection Agency (SEPA), formed under the Environment Act 1995; in Wales it is Natural Resources Wales (NRW) (established in 2013); and in Northern Ireland it is the Northern Ireland Environment Agency (NIEA), which has been established as an executive agency within the Department of Agriculture, Environment and Rural Affairs since 2016. Natural England additionally issues licences under the wildlife and habitats conservation regime, as well as providing specialist input to other bodies.

1.3 Describe any other sources of law affecting the mining industry.

The principal legislation affecting the mining industry in the UK includes:

1. the Coal Industry Act 1994 establishing the Coal Authority and setting out the framework within which the coal industry currently operates;
2. the Mines and Quarries Act 1954 governing the management and control of mines and quarries;
3. the Mining Regulations 2014 replacing and consolidating the previous mine-specific health and safety regulations into a single set that are centred around major hazards within the underground mining sector;
4. the Health and Safety at Work etc Act 1974 and a large body of health and safety regulations of general application across all sectors, which includes the
   1. Explosives Regulations 2014;
   2. Control of Substances Hazardous to Health Regulations 2002;
   3. Dangerous Substances and Explosive Atmospheres Regulations 2002; and
   4. Provision and Use of Work Equipment Regulations 1998;
5. the Environmental Permitting (England and Wales) Regulations 2016 and equivalents in the devolved regions; and
6. the Town and Country Planning Act 1990.

As a result of section 3 of the European Union (Withdrawal) Act 2018, EU mining regulations (a form of directly applicable EU legislation) have also continued in force after the UK's exit from the EU on 31 January 2020. This will remain the case unless and until they are replaced with new domestic laws, and domestic law implementing EU directives will be retained on the UK statute book (subject to necessary amendments to ensure its continued efficacy). The extent of legislative and policy changes occurring post-Brexit is yet to be seen. With respect to health and safety and environmental regulation in particular, the current expectation is that those provisions deriving from EU law are unlikely to change substantially in the short term as a result of Brexit, and the UK may be obliged in the terms of a subsequent trade deal with the EU to maintain equivalent standards.

2. Recent Political Developments

2.1 Are there any recent political developments affecting the mining industry?

Brexit: The impact on the mining industry following the UK's withdrawal from the EU on 31 January 2020 remains to be seen. The industry on average does not expect any significant changes, although some also hope for some relaxation of the regulatory regime and other measures aimed at supporting local mineral producers. There is, however, the possibility that the mining industry could face some difficulties as a result of labour shortages, resulting from the termination of the EU's freedom of movement policy, which could have an impact on the cost and availability of mine workers.

Coal: An industry which may benefit the most in conjunction with, if not as a direct result of, Brexit, is coal mining. Despite the Government's previously announced plans to shut down the remaining coal-fired power stations in the country by 2025, as part of the country's commitment to reduce its carbon footprint, several new coal licences and planning permissions have been granted since the beginning of 2019, including the Woodhouse Colliery site in West Cumbria - the first deep coal mine to be opened since the 1980s, with more new applications underway. However, the Government remains committed to achieving its commitments in the Paris Agreement on climate change and legally binding UK domestic climate change targets for emissions reduction, which have recently been increased with the ambition of achieving a 100% reduction - compared to the 1990 figures - by 2050. Furthermore, the COVID-19 pandemic has had a significant impact on coal production, with coal production in the first quarter of 2020 falling to a record low of 434 thousand tonnes, a drop of 27% compared with the same period in 2019. If such trends continue, the Government could achieve its targets as set out in the Paris Agreement sooner than originally expected.

Foreign Investment: The UK's public interest intervention regime under the Enterprise Act 2002 allows the Government to intervene in the merger control process (usually confined to competition review by the CMA or European Commission) when strictly defined public interest considerations arise in relation to specified categories of transaction. In 2018, the Government published the National Security and Investment White Paper setting out proposals for a new national security review regime. On 22 June 2020, the Government proposed two statutory instruments to strengthen the public interest merger provisions of the Enterprise Act 2002. The first proposes to lower the thresholds that are required be...