Hypothetical scenario: A landowner in rural America finds the mineral discovery of the century: 1,000,000,000 tons of gold on his property, located in a gold vein hundreds of feet underground.
The world is floored by this news, of course. The value of gold (dollars-per-ounce) plummets drastically worldwide once this discovery becomes public, but the man’s gold deposit is still worth many trillions of dollars.
The landowner wants to sell his land outright, and names the purchase price as $10 trillion. Many mining companies are vying to purchase it - but *could *they do it? No company in the world can cough up $10 trillion.
Could the mining companies borrow trillions of dollars from hundreds of banks to purchase the land, using the property’s gold deposit as collateral? Would banks be willing or even able to loan out trillions?
Could the homeowner enter into a piecemeal deal with a mining company in which 1 percent of the land would be sold to the company, who’d then mine the gold, sell it for many billions of dollars, and then pay the landowner - who would then sell another 1 percent of land to be mined, and so forth, until all the land is eventually mined?
Could the U.S. government step in, “print/create” $10 trillion in ‘new’ money to buy the landowner’s property (assuming he’s willing to accept money basically created out of thin air), and then use the billion tons of gold to put the American dollar back on the gold standard?
Be sure to read your deed very very very carefully. You might not own that gold. Many deeds exclude “mineral rights”. If so, this means you don’t even have the right to dig a well on your property (water being a “mineral”), unless perhaps you get the right permits.
On top of that, the more “realistic” answer is that the world would see a new Gold Rush like none the world has ever seen before. Are you going to be able to defend your land? GFL with that.
He would be an idiot to tell anyone about it. He should mine it privately and sell the proceeds for other goods and diversify. After setting up his own mining company, securing all the rights to the property and all contests, he should continue mining it and letting just enough out to keep the price up. Kind of how DeBeers does it with gem quality diamonds. If he ever says he has a billion tons of it, or an employee lets that out, the value will plummet to below that of copper. And while gold has industrial uses, they aren’t currently as plentiful as copper usages. Can you imagine having 20 karat gold pipes throughout your house? A solid gold giant statute of Weird Al?
The knowledge of the presence of a lot of gold could drop the gold price, because the price of gold is based on the idea that there is a limitted supply ?
He won’t need to; the government will do it for him. Oh, some company might pull off some kind of legal trickery or otherwise put pressure on him, but if anyone shows up and tries to shove him off at gunpoint they’ll get squashed. This isn’t the 18th century.
Right. According to what I’ve heard: If you were to take all the gold mined in the history of the world, it would only fill up 1/3 of the Washington Monument. Link
If you go by the common figures, there has been @340,000 tons of gold mined in all of human history. Once news of this find got out in any way, the price of gold world-wide would drop to that of tinfoil. Basically worthless, in other words. So the OP’s second sentence is demonstrably false.
The person or entity who owns the mineral rights. Most likely, someone (or something) did once own the land and the mineral rights, but at some point they sold them to different people. (Because hey, who looks for mineral rights when they’re buying a suburban house on a half-acre lot?)
They wouldn’t have to do that. IRL, the government would seize the land as a strategic resource, ala uranium, station a company of Rangers on it to keep people away, pay the landowner a lump sum ($100 million if he goes quietly, just the book value of the farmland if he pushes it) and that would be that. Imminent Domain trumps anything.
I bet the landowner would love if the government threatened eminent domain, because the Constitution requires the government to pay “just compensation” for the taking – none of this lowballing crap.
A billion tons of gold is five thousand times more gold than there is known to be in human hands right now, and is at least ten thousand times more gold than is practically available for trade.
If a billion tons of gold were suddenly available, gold would simply not be a precious metal anymore - it’d be valuable, but somewhere between aluminum and copper. It would simple become a common metal, used in a large variety of applications.