Foreign investors involved in mineral resources mining business in China must set up mining enterprises.  The application  for establishing  such  enterprises  must  be approved by the administrative authorities for commerce.

After the approval has been obtained, the enterprises shall be registered with the administration for industry and commerce The enterprises should then apply for mineral exploitation rights from the state land and resources administrative authorities.

Basic Procedures for Obtainina Mineral Exploitation Rights

Due to the great investment restructuring, examination and approval proposals and feasibility research report concerning foreign investment projects has simplified to authorize the application report, as compare with feasibility research report the project application report is obvious simplification. (see table 3-2)

In  addition,  from June  30,  2005,  foregn  investment enterprises listed in restricted items that the registered capital is less than US$6 million originally registered and administered by the state administration bureau for industry and commerce will transfer the rights to the authorized bureau of enterprise's site, while foreign-invested limited company will be administered by the registration authorities at level of province of enterprise's site.(see figure3-1 )

Documents Reauired for Obtainina Mineral Exploitation Rights

i) Application letter for registration of mineral exploitation rights;

ii) Map of the mining area with a geological topography map or geology map as the base map, to be marked with the point of inflection and the right angle coordinates in compliance with state standards, as well as details about the size of the mining area;

iii)  Mineral  resource exploitation and  utilization  plans compiled by a qualified design institution, which contain content such as the location, topography, geomorphy, reserve quality and reliability of the mine, and the technologies, and economic proof for the scope of the mining area, arieties of the minerals to be exploited, reserves designed to be utilized,  production scale of the mine, service term, exploitation means and methods and the synthesized exploitation and utilization of minerals,

iv) Legal person entity's business license or individual entity's business license;

v) Certification  materials  to  prove  the  ownership  of appropriate funds, technologies and equipment conditions for the mine construction;

vi) Document related to the mineral exploitation rights evaluation and acknowledgement if applying for mineral exploitation rights in connection with the exploitation and proving of the mining area by government funds;

vii) Environmental impact report and approval opinions of relevant environmental protection authorities.

Rights and Obligations of the Mineral Exploitation Rights Holder

a) Rights:

   (1)To mine within the time and space limits as specified;

   (2)Sale of mineral products

   (3)Building of production and living facilities within the mining area;

   (4)Acquisition of land use rights;

   (5)Transfer of mineral exploitation rights;

   (6)To shield the working area from interference and intrusion

b) Obligations:

   (1)To conduct mining construction or exploitation within the term of permission

   (2)To mine within the time and space limits as specified;

   (3)Protect the resources and to exploit them in a reasonable way according to the project;

   (4)Pay  the  resources  tax  and  mineral  resources indemnification fee;

   (5)Fill in a form of mineral resources reserves and statistical report on development and utilization of mineral resources in terms of prescription;

   (6)Accept the supervision and management of the relevant mining industry administrative authorities and support them in generating statistics and reports to record changes in reserves;

    (7)Independent evaluation of mineral exploitation rights; when transfer of mineral exploitation rights; generated by investment from the Chinese government takes places;

    (8)Adopt the specific measures required for labor security, environmental protection and land rehabilitation