Why mineral extraction could be the Next Big Thing for rural landowners

The National Planning Policy Framework (NPPF) requires all mineral planning authorities to provide a steady and adequate supply of minerals to meet demand and to maintain a certain level of permitted reserves, known as the landbank. But anyone who works in planning, construction or mineral extraction is acutely aware of the ongoing challenges surrounding minerals supply and the mineral planning system.

As you would expect for a process that could continue for several decades, and could permanently alter the land, planning permission for mineral extraction can be hard to come by. But permissions actually being granted are woefully short of demand: sand and gravel applications are currently being granted at around 60% of the rate of use, while crushed rock is just 30%.

HIGH DEMAND FOR AGGREGATES

According to the Mineral Products Association (MPA), demand for construction-related aggregates is projected to plateau at 277 million tonnes per annum from 2027. It says that, cumulatively, between 3.8 and 4.1 billion tonnes of aggregates will be required between 2022 and 2035 – well above the 3.2 billion tonnes of aggregates supplied in the previous 14-year period, from 2008 to 2021. But it’s very difficult to speed up supply. In 2023, the average time taken to determine a mineral planning application was 22.6 months for sand and gravel and 36.6 months for crushed rock, and it typically takes between five and 15 years to convert a new site from exploration to an operational concern.

There are also critical minerals to consider, including lithium, graphite, cobalt and nickel. These underpin essential technologies, including those associated with the UK’s green transition. Existing critical mineral deposits are currently not being exploited in this country to any great extent, but that could change in the future, and a number of projects are currently at the development stage.

So, with demand for mineral reserves headed towards an all-time high why is it still so difficult to get planning permission for mineral extraction?

PLANNING CHALLENGES

In areas with a district and county structure, most types of development are handled by the former, whereas the county council is the minerals planning authority. Unlike the rest of the planning system, minerals plans and plan-making haven’t yet been the focus for change.

There is also a delay between local plans being written and the shifting demand for minerals. A local plan commonly has a 10-15 year shelf life so, for example, if it were adopted in 2022, it is likely that the mineral production data for the period 2008–2017 was relied upon. And despite the drive for more housing, that mineral local plan is unlikely to be reviewed until 2032 or 2036, or even further into the future.

Another challenge highlighted by the MPA is the fact that around 75% of mineral extraction planning permissions are scheduled to end in 2042. The last time there was any real change in the minerals planning system was in 1995, prior to the formation of the Environment Agency in its current form. But, before that, the Planning and Compensation Act 1991 was introduced to improve operating and environmental standards. At that point, all planning consents were given a default end date of 2042.

Change is clearly needed and minerals could certainly move up the political agenda. Rather than look to councils, the government may simply encourage mineral operators to put in more planning applications that are then approved at ministerial level – similar to the current situation with solar and wind.

OPPORTUNITIES FOR LANDOWNERS

Although there are challenges, there are also opportunities for landowners – particularly those in rural areas. Unlike planning for some forms of development, the costs of mineral planning are so huge that the mineral operator takes the lead and carries all of the risk. Once preliminary geological tests have been completed and analysed, the landowner gets to share the information. And, later, if planning permission is granted, both parties agree a contract that covers rent and royalties, restoration and other operational matters.

It may also be possible to twin-track the planning application: if minerals are coming out, is there an opportunity for some sort of development within the same process? For example, if you’re only removing three or four metres of sand or gravel, you could back-fill it with clean, inert material, potentially creating a development platform to build on. Very occasionally it may be possible for the mineral extraction to form an early part of a wider development scheme – where the minerals worked are used in the development, and soils stripped to allow the development to proceed can be tipped into the void created by the mineral extraction. This has obvious sustainability benefits.

It could be 10 or 15 years before you see an income, but many aspects of land management are equally long term. Even if you’ve looked into mineral extraction before, it’s worth reconsidering because the supply chain has changed. What might not have been ideal then could be much more viable now because extraction and processing techniques have also improved.

A key takeaway for landowners with any form of mineral extraction or quarry on their estate is: never abandon it. As long as you can prove you’ve still been taking something out that has a positive use, you’ll be able to continue. But if you stop and want to re-start, you’ll have to start the planning application process all over again, which can be very costly.

There’s currently a lot of focus on housing development and land use but this could become almost as big a deal for landowners lucky enough to sit on mineral reserves that are in demand. There may not be as much noise about it at the moment but there will be in time.

Further information

Contact Stuart Jeffries or Adam Key

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