The transfer of exploration rights and mining rights refers to the actions to transfer the exploration rights and mining rights by the holders of those rights according to law, covering the sale, evaluation and investment, co-operation, reorganization and reform etc. of those rights. The lease and hypothecation of exploration rights and mining rights shall be managed according to the exploration rights and mining rights assignment conditions and procedures and shall be examined and approved by the original license issuer.
The two parties involved should apply for the transfer of exploration and mining rights (for all types of transfer) from the registration authority and go through the registration revision formalities after the application is examined and approved. The mining rights holder shall not transfer mining rights to any other party for mining or operation through subcontracting or any other method.
Specific Terms and Conditions For Exploration/Mining
Specific Terms and Conditions For Exploration Rights Transfer
i)Time: one year since the date of issuance of the exploration license or once the mineral resources are discovered for further exploration or exploitation within the exploration area.
ii)Investment: completion of the minimum exploration investment. RMB2,000 / km2 for the first exploration year; RMB5,000 / km2 for the second exploration year; RMBIO,O00 / km2for the third exploration year. If the investment by the exploration rights holder is higher than the specified quota, the exceeded amount will be counted into the exploration investment for the next exploration year. If the exploration work is not able to be continued normally due to force majeure such as natural disasters, the exploration rights holder may submit a report to apply for a deduction to the minimum exploration investment from the registration authority and the authority should approve and respond within 30 days of receiving the said report.
ii)Right ownerships: no disputes should exist over the exploration rights.
iii)Payment: the exploration rights license fee and price value have been duly paid according to the relevant government regulations.
iv)Other conditions as defined by the geology and mineral resource authorities of the State Council.
Specific Terms and Conditions For Mining Rights Transfer
i)Time: one year since the mining enterprise started up the exploitation.
ii)Rights ownership: no disputes exist over the mining rights.
iii)Payment: the mining right license fee and price value, mineral resource indemnification fee as well as resources tax have been duly paid according to the relevant government regulations.
iv)Other conditions as defined by the geology and mineral resource authorities of the State Council.
Procedures For Exploration/Mining Rights Transfers
Application and Handling of Exploration/Mining Rights Transfers
i)There are several tasks that need to be completed by the Exploration/Mining Rights Holder prior to the transfer application
In the case of the transfer of partial exploration/mining rights, i.e. transferring the partial exploration area provided by the exploration rights or partial exploitation range provided by the mining rights, registration of changes and separation shall be handled with the original registration authority to setup the separated exploration/mining rights for the partial rights transfer.
If the legal period of effectiveness is not long enough for the completion of the approval procedures for the transfer of the original exploration/mining rights, or for the implementation of the related exploration or mining work, the transfer applicant shall handle the registration extension formalities for the exploration/mining rights transfer with the original registration authority at the same time or in advance.
A transfer contract signed with the assignee is required for the transfer of exploration/mining rights by sale. Establishment of an equity or cooperative joint venture or completion of shareholding system reform of the enterprise will be required during which the rights and obligations relationship between the original exploration/mining rights holder and the new enterprise is clarified, and the contract for the transfer of such exploration/mining rights is signed prior to the transfer of exploration/mining rights, if such a transfer is an evaluation and investment transfer.aluation and confirmation of exploration/mining rights must be implemented when transfers of such rights are generated from government invested situations.
Application documents for the transfer of exploration/mining rights shall be prepared according to the relevant regulations.
ii)Application Documents to be Submitted for the Transfer of Exploration/Mining Rights
1) Transfer application letter;
2)Transfer contract signed by the assignor and assignee;
3)Certification document to prove the assignee's qualifications;
4) Certification document to prove the assignor's transfer qualifications;
5) Report on status of mineral resources exploration or exploitation;
6) Evaluation and acknowledgement letter of the exploration/mining rights in case such rights are generated from government investment;
7) Approval document to indicate the relevant authorities' consent in case the transfer of exploration/mining rights is from a state-owned enterprise;
8) Photocopy of the approval document for the last transfer if the exploration/mining rights are to be reassigned;
9)Other related documents required by the examination and approval authorities for exploration/mining rights transfer.
iii) Handling the Application for Exploration/Mining Rights Transfer The examination and approval authorities shall make decisions concerning approval of such transfers within 40 days of receiving the transfer application, if the abovementioned application documents have been submitted by the applicant for exploration/mining rights transfer and comply with relevant requirements. If the application documents submitted by the applicant are not in compliance with the relevant requirements, such applications will not be accepted or handled and the documents will be returned to the applicant.
Registration of Revisions to Exploration/Mining Rights Transfers
The assignor and assignee of the exploration/mining rights shall go through such revision registration formalities with the original license issuer within 60 days of receiving the transfer approval notice. The assignee shall obtain the new exploration license or mining license after having paid the related fees according to the relevant state regulations.
Procedures for the Transfer of Exploration Rights and Mining Rights (see Figure 3-2 for details)
Means of Exploration/Mining Rights Transfers
Sale, Evaluation and Investment, and Co-operation
The sale of exploration/mining rights refers to the legitimate actions by the exploration/mining rights holder in selling the exploration/mining rights to another party for exploration or exploitation of the mineral resources.
The evaluation and investment of exploration/mining rights refers to the legitimate actions by the exploration/mining right holder to evaluate exploration/mining rights and make an injection of funds to the enterprise as an investment, and implement related rights and obligations subject to the investment amount.
Co-operative exploration/exploitation refers to the actions by the exploration/mining rights holder in introducing other funds, technologies, management expertise and so forth for joint exploration/mining of mineral resources through signing a co-operation contract stipulating rights and obligations.
i) Transfer Contracts
The parties to the exploration/mining rights transfer shall sign a contract for the transfer according to the relevant laws. The contract may be a contract for transfer by sale, equity joint venture or for transfer by co-operation. The transfer contract will take effect as of the date of transfer approval.
ii) Matters Needing Attention
If the exploration/mining rights holder is reformed into a listed shareholding company, the exploration/mining rights may be evaluated and counted as capital funds for the listed company or assigned to the listed company and disclosed to the public. Nevertheless, a trustee must be hired to conduct an exploration/mining rights evaluation and the report on such evaluation will be submitted to the geology and mineral resource authorities of the State Council for acknowledgement prior to handling the transfer of rights examination, approval formalities and revision of registration formalities. If the mining shareholding company is listed overseas, such evaluation of exploration/mining right may be implemented by an overseas organization according to the regulations of the country where the company is listed, however the evaluation report needs to be filed with the geology and mineral resource authorities of the State Council.
The transfer by sale of exploration/mining rights or their transfer via the establishment of an equity or cooperative joint venture legal person entity, for the exploitation of mineral resources, requires an application for a transfer of those rights and a changing of registration formalities.
After the equity or cooperative joint venture contract is signed, such a contract shall be filed with the registration authority, if no equity or cooperative joint venture legal person entity is to be established for the exploration/exploitation of the mineral resources.
After the mining rights holder has obtained a mining license, the new enterprise jointly established by the mining license holder and other equity joint venture or cooperative joint venture partners may be exempted from the restriction which requires the exploitation and production of a mining enterprise to have been in operation for at least one year since startup.
Before applications for partial sale of exploration/mining rights are made, an application for approval concerning partial exploration/mining rights needs to be made to the registration management authority, and the relevant registration formalities for a change to exploration/mining rights has to be completed. Mining rights are not allowed be partially assigned in principle.
Leasing of Exploration/Mining Rights
Lease of exploration/mining right refers to the actions by the exploration/mining rights holder, as the party holding the lease, to lease such rights to the party paying for the lease and charging of rental. The lease of exploration/mining rights is subject to the terms and conditions for exploration/mining rights transfer as stipulated by the State Council. The exploration/mining rights holder shall continue to perform the legal obligations and undertake the liabilities defined by law during the term of lease of such exploration/mining rights.
Evaluation and acknowledgement are required for the lease of mining rights generated from exploration invested by the government, in accordance with the mining rights transfer regulations. The price value for such mining rights is decided according to the relevant regulations. The duly leased mining rights shall not be used for sale, equity joint venture, cooperative joint venture, listing or hypothecation.
1. Required documents for lease application
1) Lease application letter;
2) A photocopy of the license;
3) The contract for leasing of exploration rights and mining rights;
4) The certification document or business license to prove the qualifications and conditions of the applicant;
5) Other related documents as required by the registration administrative authority.
2. Main terms and conditions of the lease contract
1) Name of the applicant and the entity leasing out the rights, plus registration address or residential address of the legal representatives;
2) Name, license number, issuer, valid date, coordinates to indicate the scope, as well as area size and mineral types of the exploration/mining rights to be leased;
3) Lease term and use;
4) Rental amount and payment method;
5) Rights and obligations of both parties;
6) Effective term of the contract;
7) Dispute settlement;
8) Breach liabilities.
3. Matters for Attention
1) The entity leasing the exploration/mining rights is not allowed to sublease those transferred rights.
2) If the entity leasing the mining right wishes to change mining methods and main mineral species to be mined, during the course of mining, then it should apply for approval from the registration authority and go through the revision formalities.
3) The results incurred by the revoking of the mining license of the mining rights holder according to law shall be the responsibility of the liable party.
4) The entity that has leased the rights should apply for de-registration via formalities with the registration authority within 20 days of the termination of the relationship with the party that leased out the rights.
Mortgaging of Exploration/Mining Rights
The Mortgaging of exploration/mining rights refers to the action by the exploration/mining rights holder (the mortgagor) of mortgaging the exploration/mining rights to the mortgagee, on condition that such right is not transferred.
The exploration/mining rights holder as the mortgagor, is the debtor, while the mortgagee is the creditor. The exploration/mining rights, which are provided as the guarantee are the mortgaged goods.
Matters for attention for exploration/mining rights mortgaging: The mortgagor shall hire an entrusted evaluation organization to evaluate the mortgaged goods if the creditor requires the mortgagor to provide the value of the mortgaged goods.
The exploration/mining rights holder shall go through the filing formalities with the original license issuer by providing the mortgage contract and exploration/mining rights license for establishing the mortgage of exploration/mining rights. The exploration/mining rights holder shall notify the original license issuer in writing within 20 days of the termination of the exploration/mining rights mortgage relationship.
If the debtor does not perform the liabilities, the creditor shall have the right to apply for the realization of the mortgage and receive indemnification from the income earned from the disposal of exploration/mining rights according to the law. The new applicant for the exploration/mining rights shall comply with the qualifications as regulated by the state. The parties involved shall handle the exploration/mining rights transfer and revision registration formalities according to the law.
The debtor is liable for any consequences as a result of the revoke of the mining license of the mining rights holder.
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