Legal Definitions - mining partnership

A mining partnership is a specific type of business arrangement where individuals come together to jointly operate a mining venture. This includes sharing the costs, expenses, and any profits or losses generated from the extraction of minerals or other resources from the earth.

Unlike a typical commercial partnership, a key distinguishing feature of a mining partnership is that partners generally have the right to sell or transfer their interest in the operation without needing the approval of the other partners. This means the principle of delectus personae (Latin for "choice of persons"), which allows partners in a standard partnership to choose who joins their firm, does not apply. Consequently, a new partner can join the venture simply by acquiring an existing partner's share.

Here are some examples illustrating a mining partnership:

• Example 1: Gold Prospectors

  Four individuals, Sarah, Tom, Ursula, and Victor, pool their resources to lease a promising gold claim. They agree to jointly purchase equipment, hire a small crew, and share all operational costs, as well as any gold they successfully extract. After a year, Victor decides to move to another state and sells his 25% share of the mining operation to a new investor, Wendy. Sarah, Tom, and Ursula may not have personally chosen Wendy as a partner, but they cannot prevent her from joining the mining partnership because Victor had the right to transfer his interest without their consent. This illustrates the absence of delectus personae.

• Example 2: Industrial Mineral Quarry

  A group of three entrepreneurs invests in a quarry operation to extract specialized industrial minerals used in manufacturing. They establish an agreement to jointly manage the quarry, cover all expenses related to extraction and processing, and divide the revenue from sales. One of the entrepreneurs, facing unexpected personal financial challenges, decides to sell their one-third interest in the quarry to an unrelated third party. The other two entrepreneurs cannot block this sale or refuse to accept the new owner as a partner in the mining venture, as the nature of their agreement allows for the free transfer of ownership shares, which is characteristic of a mining partnership.