Laws

Article 1 These regulations are formulated , in accordance with the Mineral Resources Law of the People’s Republic of China, in an effort to strengthen the administration of mineral mining, safeguard the lawful rights and interests of concessioner, maintain the mining order, and promote the wise development of the mining industry.

Article 2 these regulations shall be observed in mining mineral resources within the territory of the people’s republic of China and other sea areas under its jurisdiction.

Article 3 prior to mining mineral resources, each mining project shall be examined, approved, registered and licensed by the department in charge of geology and mineral resources under the State Council. This includes: (1)those mineral resources within state-planned mining areas or within mining areas that of great value to the national economy; (2)those mineral resources in the territorial sea or other marine areas under China’s jurisdiction; (3)mining by foreign investment for mineral resources; and (4)those mineral resources in the Appendix attached to those regulations. Mining projects for petroleum and /or gas shall be examined and approved by the organization designated by the State Council, and then registered and licensed by the department in charge of geology and mineral resources under the State Council. Prior to mining mineral resources, certain mining projects shall be examined, approved, registered and licensed by the department in charge of geology and mineral resources under the people’s government of provinces, autonomous regions and municipalities directly under the Central Government. This includes: (1)mining for mineral resources that beyond the prescription of the first and second paragraphs of this Article and whose mineral reserves is of medium and plus scale; (2)mining for certain mineral resources for which the examination, approval and registration are conducted by the department in charge of geology and mineral resources under the people’s government of provinces, autonomous regions and municipalities directly under the Central Government. The power of examination and approval mentioned above is authorized by the department in charge geology and mineral resources under the State Council. Mining projects that are beyond the prescription of the first, second and third paragraphs of this Article shall be examined, approved, registered and licensed by the department in charge of geology and mineral resources under the people’s government at or above the county level in accordance with the provisions formulated by the standing committee of the people’s congress of provinces, autonomous regions and municipalities directly under the Central Government. If the mining areas straddle two or more administrative areas at or above the county level, mining for minerals within these areas shall be examined, approved, registered and licensed by the licensing authorities in common at next higher administrative level for areas concerned. Immediately upon the issuance of the mining licenses, the department responsible for geology and mineral resources under the people’s government at or above the county level, shall file with the department responsible for geology and mineral resources under the people’s government at the next higher level.

Article 4 Prior to submitting the application for mining rights, the mining-rights applicant shall apply for demarcation of mining areas by the licensing authorities. This demarcation shall be based on an approved Geological Exploration Report containing mineral reserves information. If there is a need to establish a mining enterprise or to apply to set up a project, the relevant procedures shall be carried out in accordance with the relevant provisions of the State based on the mining area demarcated.

Article 5 In applying for mining license, the mining-rights applicant shall present following materials to the licensing authorities: (1) an application form for registration and a drawing or map showing the mining areas; (2) documents of proof showing the qualifications of the mining-rights applicant; (3) a development plan and a utilization proposal for the mineral resources in the demarcating area; (4) approval documents from the relevant departments, when establishing certain mining enterprises that are governed by law; (5) assessment report of the impact of mineral mining on environment; and (6)materials otherwise specified by the department in charge of geology and mineral resources under the State Council. When applying for mining mineral resources within a state-planned mining area or within those mining areas which are of great value to the national economy or mining specified minerals for which the protective mining policy is prescribed by the State, the applicant shall present, in addition, the approval documents issued by the relevant departments under the State Council. If applying for mining petroleum and /or gas, the applicant shall present, in addition, the document of the State Council approving the establishment of a petroleum company or the document of the State Council permitting the petroleum and /or gas mining, and the Mining Enterprise Legal Person Certificate of the mining enterprise.

Article 6 The licensing authorities shall , within 40 days from the receipt of an application for registration, grant or deny the application and notify mining-rights applicant of the decision. If it is necessary for the concessioner to amend or to add to the materials provided in Article 5 of this Regulations, the licensing authorities shall notify the mining-rights applicant and the materials shall be amended within a prescribed time limit. If the mining registration is approved, the mining rights applicant shall , within 30 days from the receipt of the notice, pay the mining-rights use fee (heretofore referred to as the mining fee) in compliance with the provisions of article 9 of this Regulations. If anyone applies for mining-rights in areas containing mineral deposits discovered by the State, at the State’s expense, the applicant shall pay a mining fee in accordance with the provisions of Article 9 of these Regulations. They shall also pay a reimbursement fee for mining right based on the State’s prior investment , in accordance with the provisions of article 10 of these Regulations. In addition, the applicant shall carry out the mining registration procedures and obtain the mining license before becoming the concessioner. If the mining registration is not approved, the licensing authorities shall give an explanation to mining-rights applicant.

Article 7 The length of time for valid mining license shall be decided in accordance with the magnitude of the mining project. If the scope of project is large or plus, the mining license is valid for up to 30 years; for a project medium is scope, up to 20 years; for a project small in scope, up to 10 years. If there is a need to extend the time limit, the concessioner shall, within 30 days prior to the expiration of mining license, carry out the procedures regarding the extension of the registration with the licensing authorities. If the concessioner fails to carry out these procedures within the designated time limit, the relevant mining licenses shall be automatically terminated.

Article 8 after issuing the mining license, the licensing authorities shall notify the relevant people’s government at the county level where the mining area is located. The relevant people’s government at the county level shall ,within 90 days from the receipt of the notice, give public notice of the newly licensed mining area or the installation of land markers at the request of the concessioner.

Article 9 The State shall adopt a unified system in which the mining-rights shall be paid for by the mining concessioner with a mining fee. The mining fee shall be collected on a yearly basis based on the size of the mining area. The standard of collection is 1000 RMB yuan per square kilometer per year.

Article 10 If anyone applies for mining-rights to the mineral deposits already discovered by the State, at the State’s expense, the mining-rights applicant shall pay, in addition to the mining fee, a reimbursement fee for mining right which has been appraised and confirmed. The reimbursement fee for mining right may be paid in full or in installment, in compliance with the State provisions. The reimbursement fee for mining right shall be appraised by the organizations designated by the department in charge of geology and mineral resources under the State Council, jointly with the department in charge of state-owned assets under the State Council. The result of appraisal shall be confirmed by the department in charge of geology and mineral resources under the State Council.

Article 11 The mining fee and the reimbursement fee for mining right shall be collected by the licensing authorities and delivered to the state budget administration. The detailed specifications for managing the use of the funds mentioned above shall be formulated by the department in charge of geology and mineral resources under the State Council, jointly with the department in charge of finance under the State Council and the department in charge of planning under the state council.

Article 12 Under one of the following circumstances, the mining fee and reimbursement fee for mining right may be reduced or exempted: 1) mining mineral resources in frontier and poor areas; 2) mining mineral resources that are urgently needed by the State; 3) a force majeure such as natural disaster, etc., causes a severe loss or the suspension of production of the mining enterprise; or 4) other situations jointly specified by the department in charge of geology and mineral resources under the State Council and the department in charge of finance under the State Council. If a project falls within these guidelines, the mining concessioner may apply for a reduction or exemption of the fees. Such applications shall be examined and approved by the licensing authorities in accordance with the provisions governing reductions and exemptions of the mining fee and reimbursement fee for mining right, as formulated by the department in charge of geology and mineral resources under the State Council, jointly with the department in charge of finance under the State Council.

Article 13 The mining rights may also be obtained through public bidding. The licensing authorities may select the mining areas for bid, make public invitation for bids, establish and announce bidding requirements and establish the deadlines for bids, in accordance with the limits of authorities stipulated in Article 3 of these Regulations. However, mining areas open for bid by foreign investors shall be determined by the department in charge of geology and mineral resources under the State Council. The licensing authorities shall organize the evaluation of bids and select the best offer. The successful bidder shall pay the relevant fees in compliance with the provisions of these Regulations, carry out the registration procedures and obtain the mining license before becoming the concessioner, whereupon the concessioner shall fulfill the obligation stipulated in the bid documents.

Article 14 The licensing authorities shall conduct the supervision and investigation of issues regarding rational development and utilization of mineral resources, environmental protection and other obligations that shall be fulfilled within the corresponding administrative areas in accordance with law. The concessioner shall report any relevant circumstance truthfully and submit an annual report.

Article 15 Under any of the following situations, the concessioner shall apply for the modification of registration with the licensing authorities within the valid term of mining license: 1) a change in the mining area; 2) a change in the key minerals to be mined; 3) a change in the mode of mining; 4) a change in the name of the mining enterprise; 5) a transfer of the mining rights upon approval in accordance with law.

Article 16 If a mine is suspended or closed down within the term of a valid mining license or upon the expiration of a mining license, the concessioner shall apply for cancellation of the mining license with licensing authorities that originally issued such mining license within 30 days prior to the decision to suspend or close down a mine.

Article 17 Any unit or individual who mines without a mining license, mines without authorization in a state-planned mining area, mines without authorization in a mining area that is of great value to the national economy, mines without authorization specified minerals for which protective mining policy is prescribed by the State, or mines beyond the approved limits of mining areas, shall be published by the licensing authorities in accordance with the relevant laws and administrative regulation.

Article 18 Anyone who, in violation of these Regulations, does not submit an annual report, refuses to accept official supervision and examination, or employs deception or trickery, shall be ordered to stop the illegal activities, warned, and may be fined concurrently up to 50000 RMB yuan by the department responsible for geology and mineral resources under the people’s government at or above the county level in accordance with the limits of authorities prescribed by the department in charge of geology and mineral resources under the State Council. If the circumstances are serious, the mining license shall be revoked by the department that originally issued the license.

Article 19 anyone who damages or moves without authorization any land markers or posts demarcating the limits of a mining area shall be ordered to return it to the original status within a time limit prescribed by the department responsible for geology and mineral resources under the people’s government at or above the county level in accordance with the limits of authorities prescribed by the department in charge of geology and mineral resources under the State Council. If the circumstances are serious, a fine of up to 30000 RMB yuan shall be imposed.

Article 20 Anyone who prints a mining license without authorization, counterfeits a mining license, infringes in any way upon any existing mining license shall be in violation of the provisions of these Regulations. Any illegal proceeds shall be confiscated and concurrent fine up to 100000 RMB yuan may be imposed by the department responsible for geology and mineral resources under the people’s government at or above the county level in accordance with the limits of authorities prescribed by the department in charge of geology and mineral resources under the State Council. If the case constitutes a crime, the personnel concerned shall be investigated for criminal responsibility according to law.

Article 21 Any concessioner who violates the provisions set forth in these Regulations by failing to pay the required fees at the required time shall be ordered by the licensing authorities to pay an overdue fine, in addition to the amount due. The overdue fine shall be paid within a prescribed time limit and shall be calculated at 0.2% per day on the amount in arrears, counting from the date on which the payment becomes overdue. If the fees required have not been paid within the prescribed time limit, the mining license shall be revoked by the department that originally issued the license.

Article 22 Any concessioner who violates the provisions set forth in these Regulations by failing to comply with the procedures for modifying and /or canceling a registration shall be ordered by licensing authorities to comply with these procedures within a prescribed time limit. If the procedures have not been completed within the prescribed time limit, the mining license shall be revoked by the department that originally issued the license.

Article 23 Any concessioner who violates the provisions set forth in these Regulations by mining petroleum and /or gas shall be given administrative penalties by the department in charge of geology and mineral resources under the State Council in accordance with the relevant stipulations.

Article 24 If a mining license is revoked, the responsible concessioner shall not re-apply for these or any other mining rights for 2 years from the date on which the mining license was revoked.

Article 25 Any personnel with licensing authorities who act illegally or abuse their power for personal gains, or neglect their duties shall be investigated. If the behavior constitutes a crime, the personnel concerned shall be investigated for criminal responsibility according to law. If the behavior does not constitute a crime, the personnel concerned shall be given administrative penalties.

Article 26 Mining license shall be printed exclusively by the department in charge of geology and mineral resources under the State Council. The form of the application for registration, the application to modify a registration, and the application for termination a registration shall be exclusively formulated by the department in charge of geology and mineral resources under the State Council.

Article 27 Every concessioner shall pay a registration fee in compliance with the provisions. The standard for collecting these fees and the specifications for managing the use of these fees shall be determined by the department in charge of price under the State Council, jointly with the department in charge of geology and mineral resources under the State Council and department in charge of finance under the State Council.

Article 28 These Regulations shall be applied to any foreign investor mining mineral resources. If there are special stipulations prescribed in other laws or administrative regulations governing foreign investment in mining mineral resources, such stipulations shall be given priority.

Article 29 if a Chinese mining concessioner wishes to included a foreign investor in a mineral resources mining project, the Chinese partner shall be responsible for submitting the materials that describe the cooperative effort, such as the size of mining area, and the minerals involved, as well as proposals for development and utilization of the proposed cooperative project, the original licensing authorities shall review the proposed cooperative project, make any restriction or suggestions and authorize the cooperative agreement, before any contract between the cooperating parties shall be deemed valid. After the agreement has been validated, the Chinese partner shall put the agreement on file with the original licensing authorities.

Article 30 any mining license that was obtained before the implementation of these Regulations shall be replaced by the new mining license as exclusively organized by the department in charge of geology and mineral resources under the State Council. The mining enterprise existed before the implementation of these Regulations shall start to pay the mining fee as from the date of promulgation of these Regulations. However, the concessioner may apply for a reduction or exemption of this fee in accordance with these Regulations.

Article 31 the licensing authorities shall give public notice of any mining license that has been issued or abolished.

Article 32 The mining areas mentioned in these Regulations refer to a three dimensional space including the land surface area where the mineral resources can be mined, the vertical distribution of an above-ground or underground pit engineering installation, or the surface area to be removed by open stripping, as demarcated by the licensing authorities in accordance with law. The mode of mining mentioned in these Regulations refers to either underground mining or open mining.

Article 33 The revision of the Appendix attached to these Regulations shall be submitted to the State Council by the department in charge of geology and mineral resources under the State Council. After the approval of the revised appendix is granted by the state Council, the department in charge of geology and mineral resources under the State Council shall be responsible for giving public notice regarding the revision.

Article 34 These Regulations shall be implemented from the date of promulgation and shall replace the following publications, as of that date (1) Interim measures for administration of mining registration for mining enterprises owned by the whole people issued by the state Council on 29 April, 1987, and (2) Decision of the State Council regarding the Revision of the interim measures for administration of the mining registration for the Mining enterprises owned by the Whole People, issued by the State Council on 22 November, 1990.