Oslo, Norway, 28 November 2022: Arctic Mineral Resources AS (“AMR”) has appealed the judgement from Borgarting court of appeals in the lawsuit against Nordic Rutile AS (“NRU”), a subsidiary of Nordic Mining ASA (“NOM”). Should AMR succeed in the appeal, NOM will lose about half of the proven reserves of its Engebo project due to insufficient mineral rights.
«The court of appeals’ majority ruling is based on an incorrect application of present law resulting from an insufficient understanding of the history of mineral rights in Norway. The ruling creates significant risks for all mining companies with current operations based on landowners’ minerals and strips Norwegian landowners of billions’ worth of mineral values to the benefit of holders of state mineral rights. The ruling risks creating inefficient industry solutions by circumvention of consequences to the loss of landowners, the mineral industry, the Norwegian state and society, and sustainability», states Arnold Rørholt, lawyer and Chairman of AMR.
«The appeal from AMR is aligned will the minority ruling, which again builds on a recent scientific article by former Supreme Court Judge, Karl Arne Utgård (residing from 1999-2018) on the Norwegian Royal Regalias, with a specific focus on the extent of the state’s rights to metals as opposed to the landowners’ rights to all other minerals. We expect that the Supreme Court will allow the appeal for a full hearing and rule in favour of AMR», continues Rørholt.
The principal content of the lawsuit
The principal legal issue to be resolved by the lawsuit is whether ownership rights to state and landowners’ minerals are equal under the law, as claimed by AMR.
In Engebøfjellet, which is the location of both the AMR and the NOM planned projects, the minerals belonging to the landowners have a value approximately four times that of the state minerals. Under traditional and present joint ownership rules in Norway, an owner of the major value in a joint ownership would have the right to govern and make decisions for all, provided this does not jeopardize the values of the minority owners.
NOM claims that these rules do not apply to mining operations and that state minerals are superior to landowner minerals to the effect that an extraction right to state minerals consumes landowner minerals in the same deposit and, if not, gives a preferential right to establish operations, as well as a right to utilize the landowners’ minerals from the same deposit without compensating the landowners, or only with minimal compensation.
Extraction rights to state-owned minerals are obtained by the state first awarding an exploration license to the first applicant, and then, provided that the applicant can provide some documentation towards there being or might be an ore of state minerals in the license area, the state is obliged to award the applicant an extraction license to state minerals. Both rights are awarded without remuneration for their value. Thus, the state does not exercise any resource planning or judgement in the award of extraction rights to state minerals.
Extraction rights to landowner minerals are gained through agreement with the landowners, or in exceptional circumstances, after application to expropriate.
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