Factors Affecting Mineral Value

Do you have valuable minerals on your property? Many people assume that the only valuable thing you could find on someone’s property, especially in the South, is oil, gas, or some type of product that is used in the petrochemical refining process. This is simply not the case!

Even prevalent minerals like talc could be really valuable — to the point that someone might offer to buy them from your property. If you receive an unsolicited offer by someone who wants to buy minerals as obviously valuable as oil, as niche as talc, and as seemingly rare as gold, you will probably not know how to proceed. Some companies like The Mineral Auction are great at helping you determine the value of your minerals as you prepare to sell them to another party.

I am not an expert regarding mineral pricing and value determination. However, I have researched the topic at length and in this piece, I will describe some of the most common factors that affect the value of minerals on your property, including:

  • Property potential
  • Property characteristics

And more!

Potential for more

When you sell your mineral rights to another party, you are giving them permission to extract the materials from your land. The other party does not own the land as you do, they just pay you money in order to use your land and extract the valuable minerals. One of the ways in which a property’s mineral rights’ value can be astronomically higher is if it is determined that the property has the potential for a large number of additional minerals to be discovered or excavated.

If it is known that the area near the property or conditions of the property area (such as certain geological features) are predisposed towards producing large amounts of valuable minerals, then it stands for potential buyers to view the property as a worthwhile investment!

Property characteristics

No surprise, the different characteristics of your property is also determinative of the value of the property. If you have a lot of lands then the rights to the minerals on the land are naturally going to be more valuable since the opportunity to “strike gold” — figuratively or literally — will be higher. Additionally, if the land near the minerals is higher quality (for some minerals, this means that soil is more nutrient-rich, or perhaps the conditions are more inclined to support production) then the value of the mineral rights is also higher.

Investments

Similar to the ability for your mineral production to be higher than it initially appears as previously outlined, the ability for your mineral rights to be viewed as an investment could increase the value of your property’s rights!

Investors will sometimes look at mineral rights on property not as something that has value in the short term, but a small investment they can make so that in the case that the mineral production or capacity randomly increases, they can turn a serious profit. You can earn money from their ability to shell out cash in the case that something turns up!

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