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	SOME OPINIONS OF THE STATE ECONOMIC AND TRADE COMMISSION ABOUT FURTHER ENCOURAGING FOREIGN INVESTORS TO INVEST IN THE EXPLORATION AND EXPLOITATION OF NON-OIL-OR-GAS MINERAL RESOURCES

	(Formulated by the Ministry of Land and Resources jointly with the State Planning Commission, the State Economic and Trade Commission, Ministry of Finance, Ministry of Foreign Economic and Trade Cooperation and the State Administration for Industry and Commerce, effective as of December 18, 2000)


SUBJECT : NATURAL RESOURCES; NON OIL AND GAS MINERAL EXPLOITATION
ISSUING DEPARTMENT : STATE ECONOMIC AND TRADE COMMISSION OF THE STATE COUNCIL
ISSUE DATE : 12/18/2000
IMPLEMENT DATE : 12/18/2000
LENGTH : 1425 words
TEXT :

i. Further opening up the mineral prospecting right and mining right market of non-oil-or-gas mineral resources
1. Foreign investors (including foreign enterprises, their executive offices and representative offices, similarly hereinafter) are encouraged to invest in the exploration and exploitation of non-oil-or-gas mineral resources within the territory of China according to the Law of the People¡¯s Republic of China on Mineral Resources, other relevant laws and regulations and the Catalogue of Industries for Guiding the Foreign Investment.

2. Foreign investors are permitted to engage in the risk-taking exploration of non-oil-or-gas mineral resources within the territory of China in the form of exclusive investment or joint venture with Chinese party.

3. For engaging in the risk-taking exploration, foreign investors shall make registration at the administrative department for industry and commerce upon approval of the Ministry of Foreign Economic and Trade Cooperation (MOFETC), and apply for the mineral prospecting right to the Ministry of Land and Resources.

4. In case a foreign investor and a Chinese holder of mineral prospecting right cooperate in the risk-taking exploration, both parties shall conclude a cooperation contract (agreement), and stipulate the rights and obligations of both parties, and shall report it to the Ministry of Land and Resources and the MOFETC for examination and approval.

5. A foreign investor engaging in the risk-taking exploration shall, on the basis of the granted mineral prospecting right, be guaranteed to enjoy the statutory prior mineral prospecting right to the non-oil-or-gas mineral resources that have the economic value for exploration and are detected by the foreign investor within the exploration area.

6. To apply for establishing a mining enterprise, a foreign investor shall get the approval of the MOFETC, make registration at the administrative department for industry and commerce and apply for the mining right to the Ministry of Land and Resources.

7. The exploitation of non-oil-or-gas mineral resources within the determined sections shall be registered and authorized, be handled according the procedures for basic constructions, be in the charge of the Ministry of Land and Resources, and be countersigned by the State Planning Commission. Of which, the projects above the quota shall be in the charge of the State Planning Commission.

8. To invest in the exploration of non-oil-or-gas mineral resources with economic value, a foreign investor shall, before applying for the mining right to the Ministry of Land and Resources, formulate and report an overall development scheme.

9. Foreign investors are permitted to hold shares for engaging in the exploration and exploitation of non-oil-or-gas mineral resources by advanced technology or equipment, and are also permitted to purchase the mineral prospecting right and mining right to non-oil-or-gas mineral resources of large or medium-sized state-owned enterprises, unless it is otherwise prohibited by any law or regulation.

10. The mineral prospecting right or mining right to non-oil-or-gas mineral resources obtained through the investment of foreign investors may be transferred according to law.
ii. Further supporting foreign investors to invest in the exploration and exploitation of non-oil-or-gas mineral resources
1. To invest in the exploration and exploitation of non-oil-or-gas mineral resources, foreign investors may enjoy the tax preferential policies of the State according to the relevant provisions on foreign-invested enterprises and foreign enterprises.

2. In the import and export of exploration facilities and equipment, foreign investors may enjoy equal treatments with exclusively foreign-invested enterprises, Sino-foreign cooperative joint ventures, and Sino-foreign cooperative legal person enterprises.

3. Foreign investors are permitted to calculate the exploration expenses into deferred assets, and amortize them at the mining stage.

4. In case a foreign investor explores and recycles the coexisting minerals other than the main minerals of non-oil-or-gas mineral resources, it can enjoy the policy of paying half of the mineral resource compensation fees for the coexisting minerals; and in case the foreign investor makes use of gangue, it may enjoy exemption of the mineral resource compensation fees; and in case the foreign investor makes use of advanced technology and makes the mineral resources that are difficult to be exploited and utilized by using current domestic technology exploited and utilized, it can enjoy the policy of paying half of the mineral resource compensation fees for three years.

5. In case a foreign investor and a Chinese holder of mineral prospecting right and mining right cooperate in the exploration and exploitation of non-oil-or-gas mineral resources, and make the mining recovery ratio, mineral processing recovery ratio and comprehensive utilization ratio higher than the level of domestic similar enterprises by means of technological investment, they can enjoy the policy of paying half of the mineral resource compensation fees for three years. With respect to the minerals extraordinarily mined due to the technological level higher than that of domestic similar enterprises, the mineral resource compensation fees thereof may be exempted.

iii. Encouraging foreign investors to invest in the exploration and exploitation of non-oil-or-gas mineral resources in western regions
1. In case a foreign investor explores and exploits non-oil-or-gas mineral resources in western regions in the form of exclusive investment, equity or contractual joint venture with Chinese party, it can, in addition to the relevant preferential policies of the State that have been implemented, enjoy the exemption of the charges for mineral prospecting right and mining right for one year, and enjoy the policy of paying half charges for mineral prospecting right and mining right for two years.

2. In case a foreign investor explores and exploits non-oil-or-gas mineral resources encouraged in the Catalogue of Industries for Guiding the Foreign Investment in western regions in the form of exclusive investment, equity or contractual joint venture with Chinese party, it can enjoy the exemption of the charges for mineral prospecting right and mining right for five years.

3. In case a foreign investor explores and exploits non-oil-or-gas mineral resources in western regions in the form of equity or contractual joint venture with Chinese party and the Chinese party holds shares by the mineral prospecting right and the mining right, the mineral prospecting right and the mining right shall be appraised and confirmed according to legal provisions, and be reasonably evaluated, and the Chinese party shall provide relevant materials about geological achievements.

iv. Further regulating and improving the administration and services for encouraging foreign investors to explore and exploit non-oil-or-gas mineral resources
1. A domestic geologic exploration entity or mining enterprise may convert the mineral prospecting right and the mining right to non-oil-or-gas mineral resources or other assets into shares, and engage in equity or contractual joint venture with foreign investors for exploring and exploiting non-oil-or-gas mineral resources.

2. No government department at any level may participate in equity or contractual joint venture for exploring and exploiting minerals, put forward unreasonable economic requirements to foreign investors, conduct arbitrary inspections or apportionments, or add the charging items other than those prescribed by the laws and regulations.

3. The completion system within a time limit shall be implemented to the examination, approval and registration, etc. of the exploration and exploitation of non-oil-or-gas mineral resources with the investment of foreign investors. With respect to the applications filed by foreign investors for the mineral prospecting right and the mining right to non-oil-or-gas mineral resources, the registration organ shall make a decision within 30 days after acceptance, and notify the applicants in writing. Where the work of other departments is involved, the formalities shall be simplified and the efficiency in handling affairs shall be enhanced. Specific provisions shall be separately formulated by the Ministry of Land and Resources jointly with the State Planning Commission, the MOFETC and the State Administration for Industry and Commerce.

4. The administrative department for land and resources shall establish and improve the system of publishing and inquiring about geologic materials and other information as soon as possible, regularly announce the information about the attraction of investment into exploration and exploitation of non-oil-or-gas mineral resources, and provide quality services for foreign investors to invest in the exploration and exploitation of non-oil-or-gas mineral resources.

5. The local people¡¯s governments at all levels and the relevant departments of the State Council shall formulate the implementation measures, actively improve the investment environment, increase the strength of law enforcement supervision, timely solve the disputes over mineral prospecting right and mining right, maintain the order of the mining industry, prevent false equity or contractual joint venture and safeguard the legitimate rights and interests of foreign investors; and shall, according to the principle of integrating development with protection, further do a good job in the planning of mineral resources and increase the efficiency in the use of mineral resources.