The abundant mineral resources in Michigan are important to the overall prosperity of the Michigan economy. Nationally, Michigan ranks 17th in the production of crude oil, second in production of iron ore and 12th in the production of natural gas. Michigan soils also are rich in sand, gypsum, gravel, salt and brine extracts and several other natural mineral products. As of 2001, Michigan's estimated worth of non-fuel mineral production was valued at $1.9 billion.
Common Law Doctrines
The basic rights to mine minerals in Michigan come from common law doctrines. Through the years and through much debate, the laws have evolved as a result of many interpretations by the courts. Originally inherited from the old English laws, the common law doctrines -- or laws based on the decisions of judges over time rather than by legislation -- have been changed, clarified or modified by the Michigan legislature with oversight of the Michigan Department of Environmental Quality.
Regulation
Managed by the Michigan Department of Environmental Quality's Office of Geological Survey, mineral extraction processes are regulated to promote conservation and the efficient development of minerals. Protecting the environment from over-extraction, as well as protecting the health and safety of the public, are priorities of the MDEQ. Permits are used to regulate the frequency of mining activities, as well as the location and amount of minerals taken each time. Although the MDEQ regulated mineral excavation, the rights to develop the minerals along with the right to purchase or sell the rights is a private contractual agreement the MDEQ is not involved with.
Mineral Rights Defined
Property owners, or the purchases of rights, have the right to remove a mineral from the ground in exchange for money. The fee can be paid through royalties, or a percentage of income generated from the sale of the mineral over time, when minerals are extracted. While the term mineral does not have a steadfast definition in Michigan, it typically refers to fossil fuels such as oil, natural gas or coal, metal-bearing ores like gold, copper or iron, mineable rock products like limestone, gypsum or salt and other materials including sand, peat, marl or gravel.
Severed Mineral Rights
When a piece of property is purchased, typically the purchase also includes the mineral rights unless otherwise indicated in the purchase agreement. Property rights and mineral rights are different. A landowner may choose to retain the physical property but sell his mineral rights to a third-party in exchange for payment. Also, a property owner may sell the property but retain the mineral rights. In these circumstances, mineral rights become severed -- or removed from the property rights.
Dormant Minerals Act
The Michigan Dormant Minerals Act dictates that all severed oil and gas rights are returned to the property owner, also called the surface owner, after 20 years. Exceptions to this rule included if a drilling permit has been granted, a record claim of interest has been filed with the appropriate county register of deeds, the interest is used for underground storage or oil or gas is produced or extracted from the property. The Dormant Minerals Act only covers mineral rights to oil and gas, all other minerals are exempt.
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