Land costs and / or mining rights

[CoI]

My party has recently found an abandoned town and discovered that the local caves have mithril in it. I've been looking for the costs of such things and found bubkis. How much would it cost to buy the Territory off the lord/government, or at least the mining right? It's a smallish town with docking facilities, and has been abandoned for years. They've cleared the area of monsters, and the town is frequently used by smugglers and pirates in the area, so them taking over and fortifying the town would be good for the area. I'm half tempted to just have the local lord offer it to them in return for a task he needs doing, but they're in a hurry (current quest is time sensitive) so might just opt to buy it. I'd prefer to be prepared for that. Anyone know a solution to my dilemma, or at least a direction I can look?

[avr]

The Kingmaker rules, later the Ultimate Campaign rules, have values in gold 'bars' for various things. 1 GB ~ 2000-4000 GP I think. You could add up the general value, subtract some for the estimated cost to get the buildings running again, add some more for the loss of prestige to the selling government and then fudge the result whichever way makes sense to you.

Note that the locals probably have some sort of relationship with the smugglers and/or pirates and may not agree with the lord or the PCs about the good of the area.

[Drejk]

Investment rules could come in play if they decided to develop the location (though the returns are rather slow).

Downtime activities are another potential set of rules that could be used if they keep it.

As are kingdom building rules.

If they decide to take it, the ruler might be more interested in offering them the land and mine as a fief with them being his vassals owing a military service/tax rather than selling it to them, though it might rely on local culture. Is it feudal or more capitalist? How important is owning land, how important is having vassals, for one's reputation and status?

[CoI]

Feudal, but with a VERY heavy capitalist bent. Right now there are no locals. plague wiped out most of the population of the town, and the people in this country are incredibly superstitious. Monsters moved in, making it worse. Pirates and smugglers used it to their advantage adding yet another barrier to re-settling the town. right now its more of a detriment to the area (or was before they cleared it). A black mark on the Lord's reputation, but not a big enough of one to warrant taking it back as even if he cleared it, none of his vassals would stay if they were re-located there.
thanks for the links, i'll look through them.

[Drejk]

If the lord in question needs money NOW (well, feudal lords need money most of the time, though there are occasions when they need money more than usual) he might offer to grant them the land as a feudal fief with them being his vassals, for a modest gift and a yearly tax - it does not have to be thought of as tax, more like a share of profit to a senior shareholder.

If he does not need money NOW, or if he thinks that bringing order to area has more value in reputation than cash he could reasonably request for it, he can offer to grant them the land as a feudal fief with them being his vassals without asking for a gift. He might even promise them exemption from tax his share of profits for some time, depending on how much he wants to get rid of the problem.

Actually selling the land for a feudal ruler is only possible if he is utterly desperate and the land in question is allodial land (i.e. his ownership of that land is independent of any higher ranking sovereign).

If he decides to sell it he would probably demand cash corresponding to multiple years of profits the mine could provide... It's really hard to say what kind of money that would be though. D&D/Pathfinder is not really great when it comes to more complex economy.

[Ring_of_Gyges]

There are two ways to go about this, the first is narrative, the second is economics.

The narrative answer is the mine costs whatever you say it does for whatever your story needs are. 100,000gp say and if they invest some time, money, and effort in restoring the mine to working order it will bring in 1,000gp a month until the vein runs dry. The vein will run dry as soon as you think it makes the story more interesting. Easy.

The economic answer is more complicated, particularly because the monetary system of 3.x is not very developed. Any number is going to be almost pure invention on your part, but here is where I'd start.

The fundamental theory of valuation is return on investment. Suppose iron mines go for 10,000gp and return 1,000gp a year in profit, that's an ROI of 10% yearly. Suppose copper mines go for 5,000gp and return 750gp a year in profit, that's a 15% ROI. Easy.

Here's the thing, in a ideal market the ROI for all investments will be the same number. Take the example above, someone with 100,000gp to invest is better off buying 20 copper mines and ignoring iron, so copper mines become scarce (because that's what investors want to buy). The price of copper mines goes up, the ROI goes down. The price of iron mines goes down (because no one wants them while there is sweet sweet copper to buy) and so the ROI goes up. This trend continues until the ROI on both is the same. In the real world, imperfect information and other market distortions prevent this from fully equalizing, but it's a good starting place for valuing the industrial production of Golarion.

If a ROI of 10% is around about what the market offers on investments then an asset that produces Xgp a year is worth (X*10)gp to purchase. So what's a decent ROI and what's a decent production for your mine? Say the mine produces 1 pound of mithril a day worth 500gp or 182,000gp worth of mithril a year. Subtract from that some costs (maybe 100 workers at 3sp a day each or 10,950gp/year) and you get a profit of 171,050gp for a mine worth almost 2 million gold.

That too expensive? Try shifting the output to a pound a week, that drops the profit to 15,050gp a year and the mine's value to 150,000gp.

That too cheap? Then assume the economy of Golarion isn't doing as well and the average ROI is 5% instead, then the mine is worth 300,000gp.

Fiddle the numbers to your heart's content to generate any result you want. How much mithril can the fully developed mine produce? However much you say, mithril's made up. What is a decent ROI for the economy of Nirmathas (or wherever)? Whatever you say it is.

An alternate theory is the time value of money. Suppose you can make a 10% ROI on your money. The right to receive 100gp in a year is worth ~91gp now (on the theory that you could invest 91gp at 10% and have 100gp in a year). Suppose there are 1,000 pounds of mithril under the mountain somewhere (worth 500,000gp eventually) but it will take 5 years and 50,000gp in investment to dig it all out. Well, 500k in 5 years is worth about 310k now, minus the 50k in investments you'll need to make (discounted down to 31k because the investments will be made over the life of the mine), means the mine is worth ~280k gp.

Again, change any of the figures above to meet your needs. How many workers will it take? How many guards will it take to secure half a million in mithril? How much mithril is down there? Etc... Etc...

Another thing to consider is uncertainty. Maybe no one knows how much mithril is down there. An asset that has a 50% chance of being worth 100gp and a 50% chance of being worth nothing is worth 50gp.

The above gives you some ways of thinking about valuation of business assets that people use in the real world. The real answer is "make up a number", but if you want a little more rigor there are lots of options.

[Drejk]

Another simplified way of determining the payment: look through the list of army units in mass combat section of kingdom building rules. Pick the unit the lord in question would like to field. Check its consumption value - this is the number of BPs (Build Points - an abstract value of economic production in kingdom rules that is usually worth between 2 and 4 thousand gold pieces). The PCs should provide the lord with comparable amount of wealth on a seasonal basis, allowing him to maintain such unit in place of their vassal service.

This would mean that the mine and land should produce at least as much profit per season, though it might require some supervision and investment to reach that level of production.

[CoI]

I forgot to mention that nobody knows there's mithril there but them. Accidental cave in exposed a little during the battle against the monsters. So if they are sneaky it won't come into play during negotiations.

[Ring_of_Gyges]

Well, that will pretty radically reduce the value of the land. Mind you, if the PC's pay for an empty field then start hauling hundreds of thousands of gp worth of mithril out of it, the local baron might want to "renegotiate". With lances.

What does the land seem good for? That's going to fix the value. If it is seemingly cursed and the local peasants won't go near it any kind of settlement is going to be very difficult.

One feudal wrinkle is that the local lord might not be able to sell the land, under feudalism it isn't really his in some relevant ways. A feudal lord doesn't so much own land as administer it for *his* feudal lord and up the chain to the king who owns everything. A lord may need to receive permission to sell hereditary lands, permission that is unlikely to be forthcoming (kings typically aren't particularly interested in selling off chunks of their kingdoms). An alternative would be granting some lesser title to one of the PCs and putting the whole party in the feudal chain. "Sure, you can have this town I nominally control. You'll be a local baronet and report to me, your baron. You'll owe me feudal obligations of various kinds, but the town is yours for a pittance, you just owe me X% of profits as tax and I owe you various protections."

[CoI]

It was a fishing village, but the harbour is big\deep enough for seagoing vessels. Rumours say it's cursed, otherwise why would the plague have happened? Day's travel by sea to a large city, but not along any land based trade routes. Some basilisks made it their home and the smugglers and pirates had their people confirm the rumours it's cursed to give them a safe port in a good position.
The PC's can also bring in their own settlers that will scoff at the local's superstitious stupidity, and have the ability to fortify the crap out of it very quickly. However many\most of those people will likely be non-human and\or other undesirables in the highly racist and arcanaphobic country. Not that anyone will know that until AFTER the fact of course.

[Drejk]

The lord might demand a fixed yearly tax based on the perceived yearly output of the land (not much) or potential yearly output (presence of a suitable harbor for future development might bump it higher than in the first case). If they start shipping out mithral he will probably want to renegotiate or claim some sort of obscure right saying that the fief does not come with the right to mine, only the right to harvest crops and such. Or he might suck it up and instead increase the military service burden on the vassals hoping that they will fail to fulfill their duty and he will be able to take the land back. Or he might really be happy of the solved problem and instead cooperate with them.

If there is a strong capitalist aspect of the local economy and culture, the lord might instead set the tax as a percentage of yearly income, in which case the the increased production will only make him happier. Unless he'll suspect the PCs are hiding even greater income... Then expect official and unofficial visits of him or his investigators to evaluate the actual income of the fief.

[CoI]

I like that last one. Knight them, or make them a baronet in return for a fixed amount or task, and take a percentage of profits yearly. Relatively simple, logical, and leaves room for adventure ideas. The question now is how much of a percentage would be asked for?

[Tom S 820]

Buying the land is one with buying the mineral rights is and other. If they do not ask the mineral rights. Then start mining the lord could cancel or void the whole deal and take land back. If they ask for the mineral rights as part of the term of sale then the lord should want geo survey before closing the sale.

[CoI]

How much do you think it should cost then?

[CoI]

I've found rules for mining in quintessential dwarf, it's a 3.0 book but the mining rules seem solid, mostly. Anyone use it before? Only thing I'm getting hung up about so far is the sell price of the tailings (leftover rock and whatnot). They say 10% of what you're mining is usable ore, and 20% of what's left can be sold for 1sp per pound. I did some calculations and it seems that they're going to be making almost as much off of that as they are for the mithril.