Buying/selling a coal seam is much more complex than buying/selling a car. When you buy a car you simply pay for it, file a title transfer with the government and drive the car home. When the car is worn out, it goes to the junk yard and the only thing that remains is a memory. However, when mineral rights are purchased, the buyer and all future mineral rights owners will have a right to exploit the property. And, the seller and all future surface owners must live with the consequences. Usually, mineral extraction will occur at some future time. Mining companies often schedule their equipment and employees years in advance. Or, the mining company might purchase the property as a future “reserve.”
It is also possible that the new mineral owner has no intentions of production. They are simply buying the property as an investment. Their goal is to sell the mineral rights to a mining company who will assume the duties of production. Speculators who have no intent to mine purchase lots of mineral properties. They are simply attempting to be “middle men” who acquire valuable property from individual owners and broker those properties to mining companies for higher prices.
(These “speculator” buyers also frequently use options. In an option transaction, they offer the property owner a small amount of money today for the option of buying the property at a specified price on or before a specified date in the future. The speculator then quickly tries to find someone who will pay an even higher price and make a significant profit. If the speculator fails to pay the specified price by the expiration date, the property owner keeps the option payment.)
When a company buys mineral rights, it also buys the right to enter the property and remove the resource at some future time. In most of these transactions, the surface owner has no say in when the mining takes place, how it will be done and what will be done to restore the property. Most disagreements between buyers and sellers occur at the time of mining. If the seller wants any control at that time, he must anticipate what might go wrong and write a contract that will preserve his wishes. Keep in mind that your grandson might own the property when extraction occurs. You were paid up front but he will live with the deal.
