VALUATION OF…
Mineral Rights
Rights to extract minerals from land, valued separately from surface rights on the basis of resource, royalty income, or extraction potential.
Content status: Methodology and evidence log — Sources, Caselaw and Market Information are added incrementally.
Methodology
Mineral rights are valued using the Income Capitalisation or Discounted Cash Flow Method applied to royalty or extraction income where a mining right is granted and in production, or, for undeveloped resources, using a resource-based valuation having regard to the quantity and grade of the mineral deposit, commodity price assumptions and extraction cost.
The Big Five framework does not apply in the conventional sense — there is no Income Generating Unit comparable to leasable floor area; instead, the valuer identifies the resource base (proved, probable or inferred reserves), the royalty or profit-share structure with any operator, and applies a discount rate reflecting commodity price risk, extraction and regulatory risk, and the remaining life of mine.
Because mineral rights valuations are highly specialised and commodity-specific, a Direct Comparison cross-check against comparable mineral rights transactions in the same commodity and region should be used where available, though such evidence is often scarce and should be supplemented by specialist mining valuation input.
Caselaw
Case law, regulatory rulings and expert-determination disputes relevant to valuing this asset class. Each entry cites its source and summarises the practice implication for valuers — this is not investment, financial, or legal advice.
The Evidence Log is for VDH Members
The Evidence Log for Mineral Rights — sourced sales, disposals and rentals with Valuer’s Lens commentary — is included in VDH Membership: from R125/month for SACPVP candidates and students, R399/month standard. All prices include VAT.
The methodology and case law on this page remain free to read.