Hello
Your question has many variables to take into question regarding the
type of limestone and even whether the land has been newly purchased
and royalty rights have been transferred with the purchase or retained
by the original owner. That aspect of things I will avoid as it
involves legal entanglements and several court case decisions over the
years. So I will answer under the assumption that the current land
owner has all rights intact and factor in the variables on that basis.
If your quarry is crushed or broken up limestone, the tonnage
royalties are in the pennies.
Some examples are:
Representative Unit Sales Price ($/ton)
State - - - - - - - - - - - - - - - - - - - - - Washington - - -
Tennessee - - - Illinois - - - Indiana
Crushed Stone - - - - - - - - - - - - - - $5.20
$5.44 $4.71 $4.27
(including limestone)
Royalty payments - - - - - - - - - - - $0.31
$0.33 $0.28 $0.26
I found none specific to Kentucky but these should give you some idea.
Figures are as of the month of June, this year.
Source: USGS Mineral Industry Surveys—all data other than dimension
stone prices.
However, if the limestones on the properties you are asking about are
what are known as "Dimension" stones, dimension stone prices can
exceed $100 per ton. Dimension stone is that which is used as
building stone.
Examples are:
Representative Unit Sales Price ($/ton) - For dimension stone I found
pricing from two states.
State - - - - - - - - - - - - - - - - - - - - - Washington - - -
Tennessee - - - Illinois - - - Indiana
$100.00 $122.00
Royalty payments - - - - - - - - - - - - - - - - - - - - - - - - -
$6.00 $7.32
Source: USGS Mineral Industry Surveys
The above are what is known as "Fixed Royalty Rates."
You may want to consider percentage rates.
Lessor’s Perspective of Fixed Royalty Rates
These are for crushed stone but are illustrative of the difference
between fixed rates and percentage rates. The same differences would
apply to dimension stone, just with larger figures.
Year - - - - - - - - - Prices - - - - Effective Fixed Royalty - - - -
Rate
1975 $2.07 $0.15
7.3%
1980 $3.30 $0.15
4.5%
1985 $4.11 $0.15
3.6%
1990 $4.93 $0.15
3.0%
1995 $4.94 $0.15
3.0%
2000 $5.64 $0.15
2.7%
Lessor’s View of Percentage Royalty Rates
Year - - - - - - - - - Prices - - - - Percentage Rate - - - - Dollar
Rate
1975 $2.07 5.0%
$0.10
1980 $3.30 5.0%
$0.16
1985 $4.11 5.0%
$0.21
1990 $4.93 5.0%
$0.25
1995 $4.94 5.0%
$0.25
2000 $5.64 5.0%
$0.28
The above should give you some idea of what is being done in the way
of royalty payments for both percentages and fixed rates. You will
also note in the additional research links that diminsion stone is a
catch all term for both limestone, sandstones, and other building
stone. All figures above are from:
( http://www.aggman.com/0602_pages/0602management.html ) - which is
the website of AggMan, which is a publication of Mercor Media inc.
I have found no royalty rates differing by type of quarry in regard to
being an inland waterway quarry. Everything seems to be pretty much
the same across the board.
Some additional websites used in the search:
"Crushed and Broken Limestone Mining and Quarrying" - PDF format
( www.census.gov/prod/ec97/97n2123b.pdf ) - US census information
relating to quarrying
"IVANHOE MINES LTD." - PDF format
( www.ivanhoe-mines.com/i/pdf/2001AIF.pdf ) - Actually this website
is about gold mining rather than limestone. However it did provide
some search direction in tracking down royalty payments. Some things
seem to be easier to find when approached from a 90 degree angle.
Search - Google
Terms - mining royalty payments, quarry operation precedure, quarry
royalty payments, inland waterway quarrying
If you need any further clarification, please ask.
Cheers
Digsalot |
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