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MEASURES FOR THE ADMINISTRATION OF INVITATION TO BID, AUCTION, AND QUOTATION FOR MINERAL PROSPECTING RIGHT AND MINING RIGHT (TRIAL)
 
(No. 197 [2003] of the Ministry of Land and Resources promulgated on June 11, 2003, which shall come into force as of August 1, 2003)
     
     
SUBJECT : MINING RIGHT & MINERAL PROSPECTING RIGHT
ISSUING DEPARTMENT : MINISTRY OF LAND AND RESOURCES OF THE PEOPLE'S REPUBLIC OF CHINA
ISSUE DATE : 06/11/2003
IMPLEMENT DATE : 08/01/2003
LENGTH : 4,179 words
TEXT :
TABLE OF CONTENTS

CHAPTER I GENERAL PROVISIONS
CHAPTER II SCOPE
CHAPTER III IMPLEMENTATION
Section 1 General Provisions
Section 2 Bid Invitation
Section 3 Auction
Section 4 Quotation
CHAPTER IV SUPPLEMENTARY PROVISIONS


CHAPTER I GENERAL PROVISIONS

Article 1. The present Measures are formulated in accordance with the Law of the People's Republic of China on Mineral Resources, the Measures for the Administration of Registration of Regions for Prospecting Mineral Resources and the Measures for the Administration of Registration of Mining of Mineral Resources, in order to improve the system of paid acquisition of the mineral prospecting right or mining right, regulate the invitations to bid, auction, and quotation concerning the mineral prospecting right or mining right, maintain the ownership of the state over the mineral resources, and protect the lawful rights and interests of the mineral prospecting right holders and the mining right holders.


Article 2. The responsibility to arrange for and implement the invitation to bid, auction, and quotation concerning the mineral prospecting right or mining right shall, according to the legal scope of power for issuing the prospecting permit and the mining permit, remain with the administrative department of land and resources under the people's government at the county level or above (hereinafter referred to the administrative department).


Article 3. Invitation to bid concerning mineral prospecting right or mining right mentioned in the present Measures means that the administrative department announces a bidding notice to invite certain or uncertain bidders to participate in a bid, and determines the bid winner of the mineral prospecting right or mining right according to the result of the bid.

Auction concerning mineral prospecting right or mining right mentioned in the present Measures means that the administrative department announces an auction notice for the bidders to an auction to bid publicly at the designated time and place, and determines the winner of the mineral prospecting right or mining right according to the bidding result.

Quotation of the mineral prospecting right or mining right mentioned in the present Measures means that the administrative department announces a quotation notice, and accepts the quotations of the bidders to an auction within the time limit and at the place prescribed in the quotation notice, and updates the quoted price, as well as determines the winner of the mineral prospecting right or mining right according to the bidding result at the expiry of the time limit for quotation.


Article 4. Invitation to bid, auction, and quotation concerning mineral prospecting right or mining right shall be in compliance with the principles of publicity, fairness, honesty and credibility.


Article 5. The Ministry of Land and Resources shall be responsible for the supervision and administration of invitation to bid, auction, and quotation concerning mineral prospecting right or mining right nationwide.

The superior administrative department shall be responsible for supervising the inferior administrative department's invitations to bid, auction, and quotation concerning mineral prospecting right or mining right.


Article 6. Where any functionary of the administrative department neglects his duties, abuses his power or practices frauds for personal gain in invitation to bid, auction, and quotation concerning mineral prospecting right or mining right, he shall be imposed upon administrative sanctions in accordance with the law.



CHAPTER II SCOPE

Article 7. If a place to be attached with a new mineral prospecting right is under any of the following circumstances, the administrative department shall grant such a right by means of invitation to bid, auction, and quotation:

(1) it is an ore field which has been surveyed with the funds of the State and has been verified to be possible for further survey;

(2) it is an ore field which has lost the mineral prospecting right;

(3) it is a region for prospecting specified in the special planning at the State level and also the provincial level on surveying mineral resources; or

(4) other circumstances prescribed by the administrative department.


Article 8. If a place to be attached with a new mining right is under any of the following circumstances, the administrative department shall grant such a right by means of invitation to bid, auction, and quotation:

(1) it is an ore field which has been surveyed with the funds of the State and has been verified to be possible for mining;

(2) it is an ore field which has lost the mining right;

(3) it is an ore field which has lost the mineral prospecting right but may be mined;

(4) the minerals are able to be mined without survey prescribed by the administrative department; or

(5) other circumstances prescribed by the Ministry of Land and Resources and the administrative department at the provincial level.


Article 9. If the scope in Article 7 or 8 of the present Measures is satisfied, and in case of any of the following circumstances, the administrative department shall grant the mineral prospecting right or mining right by means of invitation to bid:

(1) the project concerned is a surveying project funded by the State;

(2) the ore field is a large energy or metal ore field of mineral resource deposits;

(3) the ore field has many joint or associated compositions and the technical level of comprehensive utilization is high;

(4) the mining area is of important value to national economy; or

(5) in accordance with laws or regulations or the State policies, the region which is sensitive in environment or the region not meeting the environment and quality standards prescribed by the State may be attached with a new mineral prospecting right or mining right.


Article 10. In case of any of the following circumstances, the administrative department shall not grant the mineral prospecting right or mining right by means of invitation to bid, auction, and quotation:

(1) the mineral prospecting right holder applies in accordance with the law for the mining right within the scope of the region for prospecting;

(2) the continuing mining area of a mine enterprise conforms to the planning of mineral resources or overall planning of the mining area, or the upper and lower part of the mining area attached with the mining right needs to be uniformly mined;

(3) it provides building minerals for the key infrastructure construction projects of the State;

(4) the ownership of the mineral prospecting right or mining right is in dispute; or

(5) it is otherwise prescribed by laws or regulations or by the administrative department that the mineral prospecting right or mining right is not suitable to be granted by means of invitation to bid, auction, and quotation due to particular circumstances.


Article 11. Where the administrative department violates any of the provisions in Articles 7 to 10 of the present Measures to grant the mineral prospecting right or mining right, it shall be ordered by the superior administrative department to make a correction within a time limit; if it fails to make the correction within the time limit, the directly responsible person in charge and other directly liable persons shall be imposed upon administrative sanctions in accordance with the law.



CHAPTER III IMPLEMENTATION

Section 1 General Provisions

Article 12. Invitation to bid, auction, and quotation concerning mineral prospecting right or mining right shall be carried out in a planned way.

The administrative department shall, in light of the planning on mineral resources, the special planning on survey of mineral resources, the overall planning on the mining area, the industrial policies of the State and the market supply and demands, work out an annual plan on invitation to bid, auction, and quotation concerning the mineral prospecting right or mining right within the statutory scope of power for issuing the prospecting permit or mining permit, and then submit the annual plan to the superior administrative department for record.


Article 13. A superior administrative department may authorize an inferior administrative department to arrange for the specific work of invitation to bid, auction, and quotation concerning the mineral prospecting right or mining right, and the prospecting permit and mining permit shall be verified and issued by the authorizing organ.

The authorized administrative department shall not re-authorize an inferior administrative department to arrange for the specific work of invitation to bid, auction, and quotation concerning the mineral prospecting right or mining right.


Article 14. The administrative department shall, according to the annual plan on invitation to bid, auction, and quotation concerning the mineral prospecting right or mining right and the "Catalogue on Guidance of Foreign-Funded Industries", work out a proposal on invitation to bid, auction, and quotation; the local administrative department at the county level or above may, in light of the actual situation, submit the said proposal to the people's government at the same level for examination and determination.


Article 15. The administrative department shall, according to the proposal on invitation to bid, auction, and quotation, work out the documents on invitation to bid, auction, and quotation.

The documents on invitation to bid, auction, and quotation shall include the notice on invitation to bid, auction, and quotation, the bidding documents, the application letter for the bid to an auction, the price quotation list, the geological report on the ore field, the requirements on development and utilization of mineral resources and on protection of the mine environment, the letter on confirmation of the bargain, and so on.


Article 16. The minimum bid or the quoted minimum price in an auction shall be evaluated by an evaluation institution qualified to evaluate the mineral prospecting right or mining right, which is authorized by the administrative department prescribed, or be evaluated by means of inquiring the price or contrasting, and shall be collectively determined on the basis of the comprehensive factors such as the evaluation result and the industrial policies of the State.

Before the end of invitation to bid, auction, and quotation, the minimum bid or the quoted minimum price in an auction must be kept confidential, and shall not be altered.


Article 17. The notice on invitation to bid, auction, and quotation shall include the following contents:

(1) name and address of the administrative department;

(2) brief information on the region for prospecting or mining area for mining under planned invitation to bid, auction, and quotation;

(3) the qualification conditions for applying for the mineral prospecting right or mining right and the requirements for obtaining the qualification as the bidder to a bid invitation or to an auction;

(4) ways to obtain the documents on invitation to bid, auction, and quotation;

(5) time and place of invitation to bid, auction, and quotation;

(6) ways of bidding in a bid or auction;

(7) criteria and ways to determine the bid winner or the auction winner;

(8) the guaranty bonds for bidding or for the bid to auction as well as the payment method and disposal method; and

(9) other particulars which need to be announced.


Article 18. The administrative department shall examine the qualifications of the bidders to a bid invitation, auction, or quotation in accordance with the provisions, and shall notify the bidders to a bid invitation, auction, or quotation who meet the qualification conditions and requirements, of the time and place for attending invitation to bid, auction, and quotation and for paying the guaranty bonds for bidding or for the bid to auction.


Article 19. A bidder to a bid invitation, auction, or quotation may not attend invitation to bid, auction, and quotation concerning the mineral prospecting right or mining right until he has paid the guaranty bonds for bidding, for auction, or for quotation at the time and place required in the notice; if he fails to make the payment within the time limit, he shall be deemed to have waived the right.


Article 20. After determining the bid winner, the auction winner, or the quotation winner by means of invitation to bid, auction, and quotation, the administrative department shall conclude the letter on confirmation of the bargain with the bid winner, the auction winner, or the quotation winner. If the bid winner, the auction winner, or the quotation winner fails to conclude the letter on confirmation of the bargain within the time limit, the results of wining the bid, the auction, or the quotation shall be invalid, and the paid guaranty bonds for bidding, for auction, or for quotation shall not be refunded.

The letter on confirmation of the bargain shall include the following contents:

(1) names and addresses of the administrative department, the bid winner, the auction winner, and of the quotation winner;

(2) the time and place of the bargain;

(3) brief information on the region for prospecting or the mining area for mining of bid-winning, auction-winning, or quotation-winning;

(4) price of the mineral prospecting right or mining right;

(5) time and method for payment of the price of the mineral prospecting right or mining right;

(6) requirements on development and utilization of mineral resources and on protection of the mine environment;

(7) the time for making the registration; and

(8) other particulars stipulated between the administrative department and the bid winner, the auction winner, or the quotation winner.

The letter on confirmation of the bargain shall be effective as a contract.


Article 21. The administrative department shall, before issuing the prospecting permit or the mining permit, charge the price of the mineral prospecting right or mining right in a lump sum. If the price of the mineral prospecting right or mining right is large, it may be paid by installments upon the consent of the superior administrative department.

The price of the mineral prospecting right or mining right shall be used and managed in accordance with the relevant provisions.


Article 22. The guaranty bonds for bidding, for auction, or quotation which are paid by the bid winner, the auction winner, or the quotation winner may be converted into the price. As for the guaranty bonds for bidding, for auction, or for quotation paid by other bidders to a bid invitation, auction, or quotation, the administrative department must refund them within 5 working days after the end of invitation to bid, auction, and quotation, without calculating the interest.


Article 23. After the end of invitation to bid, auction, and quotation, the administrative department shall, within 10 working days, announce the results of the bid-winning, the auction-winning, or quotation-winning at the designated place or through the designated media.


Article 24. Where the bid winner, the auction winner, or the quotation winner provides false documents to conceal the facts, colludes with others in bad faith, offers bribes to the administrative department or the bid evaluation committee or any of the members thereof, or wins the bid by other illegal means, the results of bid-winning, auction-winning, or quotation-winning shall be invalid, and the paid guaranty bonds for bidding, for auction, or quotation shall not be refunded.


Article 25. The administrative department shall, within the time stipulated in the letter on confirmation of the bargain, make registration for the bid winner, the auction winner, or the quotation winner, issue the prospecting permit or mining permit, and protect the lawful rights and interests of the bid winner, auction winner, or quotation winner in accordance with the law.


Article 26. If the administrative department changes the results of bid-winning, auction-winning, or quotation-winning or fails to issue the prospecting permit or mining permit in accordance with the law after concluding the letter on confirmation of the bargain, the superior administrative department shall order it to make a correction within a time limit, and the directly responsible person in charge and other directly liable persons shall be imposed upon administrative sanctions in accordance with the law; if it causes any loss to the bid winner, the auction winner, or the quotation winner, the bid winner, the auction winner, or the quotation winner may apply for administrative compensation in accordance with the law.


Article 27. The administrative department shall be responsible for setting up the file of invitation to bid, auction, and quotation, which includes the basic information on the bidders, the bid evaluation committee, the bid winner, the bidders to an auction and the auction winner, and the quotation winner, the process of invitation to bid, auction, and quotation, and the results of bid-winning, auction-winning, or quotation-winning.


Section 2 Bid Invitation

Article 28. For the invitation to the bid of a mineral prospecting right or mining right, the bidders shall be no less than three persons.

If the bidders are less than three persons, the administrative department shall, in an invitation to bid for a mining right, re-arrange for the invitation to bid in accordance with the present Measures; or may, in an invitation to bid for a mineral prospecting right, grant the mineral prospecting right by means of quotation.


Article 29. The administrative department shall determine the reasonable time for the bidders to work out the bidding documents; provided that it shall be no less than 30 days from the day when the bid invitation documents are sent out until the date of expiry for the bidders to submit the bidding documents.


Article 30. The bidding and opening of a bid shall be carried out according to the following procedures:

(1) the bidders work out the bidding documents upon the requirements of the bid invitation documents, and serve the sealed bidding documents to the designated place before the expiry date for submitting the bidding documents, and a written promise on assumption of liabilities for the bidding documents shall be attached.

Before the expiry date for submitting the bidding documents, the bidders may supplement or amend but not withdraw the bidding documents. The supplemented or amended contents shall be considered the component parts of the bidding documents;

(2) After the bidding documents are signed and received by the administrative department, they may not be unsealed before the opening of the bid; if they are served after the expiry date for submitting the bidding documents, they shall not be accepted;

(3) The bid shall be opened publicly at the time and place determined in the bid invitation documents. The opening of the bid shall be presided by the administrative department, which shall invite all the bidders to take part in.

When a bid is opened, the bidders or their representatives shall inspect the seal of the bidding documents, and unseal them publicly, read the names of the bidders, the bidding prices and the main contents of the bidding documents;

(4) The responsibility to evaluate a bid shall remain with the bid evaluation committee formed by the administrative department. The bid evaluation committee shall evaluate and examine the bidding documents according to the standards and ways determined in the bid invitation documents for evaluating bids, and may, when evaluating and examining the bidding documents, require the bidders to make a necessary explanation or statement on the bidding documents, provided that the said explanation or statement shall not exceed the scope of the bidding documents or change the essential contents thereof.

The bid evaluation committee, shall, after evaluating the bid, render a written bid evaluation report and put forward the candidates for wining the bid, and submit them to the administrative department for determination of the bid winner; the administrative department may also authorize the bid evaluation committee to directly determine the bid winner.

If, after evaluation, the bid evaluation committee considers that no bidding document conforms to the requirements of the bid invitation documents, it may veto all the biddings.


Article 31. The members of the bid evaluation committee shall be no less than five persons and in an odd number, which shall be determined by the administrative department according to the mineral prospecting right or mining right under planned invitation to bid, and the relevant experts in the field of technology and economics shall be no less than two thirds of the total number of the members.

Before the result on the winning of the bid is announced, the name list of the members of the bid evaluation committee must be kept confidential.


Article 32. Where any member of the bid evaluation committee accepts the properties or other benefits from a bidder, or discloses the minimum bid or other relevant information to others, the administrative department shall cancel his qualification to hold the post of member in the bid evaluation committee.


Article 33. A determined bid winner shall meet any one of the following conditions:

(1) he is able to maximumly satisfy all the comprehensive evaluation standards prescribed in the bid invitation documents; or

(2) he is able to satisfy the essential requirements of the bid invitation documents, and the bidding price is evaluated to be the highest, unless it is lower than the minimum bid.


Article 34. After the bid winner has been determined, the administrative department shall notify it to conclude the letter on confirmation of the bargain within 5 days as of the receipt of the notice, and meanwhile notify all the bidders of the result of bid-winning.


Section 3 Auction

Article 35. For the auction of mineral prospecting right or mining right, the bidders to an auction shall be no less than three persons. If there are less than three persons, the administrative department shall cease the auction.


Article 36. For the auction of mineral prospecting right or mining right, the administrative department shall announce the auction notice 20 days before the auction day.


Article 37. An auction shall be carried out according to the following procedures:

(1) the auction presider counts the bidders to the auction;

(2) the auction presider introduces the brief information on the mineral prospecting right or mining right;

(3) the auction presider announces the auction rules and the particulars to be noticed;

(4) the presider quotes the initial price; and

(5) the bidders to an auction respond to the quotation.


Article 38. Where there is no minimum price, the auction presider shall make a statement before the auction; where there is the minimum price, but the highest price responded by the bidders to an auction does not reach the minimum price, the said responded price shall not be valid, and the auction presider shall cease the auction.


Article 39. Once the highest price responded by the bidders to an auction is determined by the auction presider by knocking the gavel, it means the bargain of the auction is completed, and the auction presider shall announce that bidder to the auction who responds at the highest price is the auction winner.

The administrative department and the auction winner shall conclude the letter on confirmation of the bargain on the spot.


Section 4 Quotation

Article 40. For the quotation of mineral prospecting right or mining right, the administrative department shall announce the quotation notice 20 days before the first day of the quotation.


Article 41. For the quotation of mineral prospecting right or mining right, the administrative department shall, on the first day of the quotation and by means of quotation, announce the initial price, the rules on increasing the price, the range for increasing the price, the time of quotation, etc. at the place designated in the quotation notice.

The time of quotation shall be no shorter than 10 working days.


Article 42. A bidder to the quotation may not fill out the price quotation list to quote the price unless he has paid the guaranty bonds for the quotation before the expiry of the time limit for quotation. The administrative department shall update the quoted price after accepting and confirming the new quotation.


Article 43. During the quotation, the administrative department may adjust the range for increasing the price in light of the quotations made by the bidders to the quotation.


Article 44. At the expiry of the time limit for quotation, the administrative department shall determine whether the bargain is completed in accordance with the following provisions:

(1) if only one bidder to the quotation quotes the price within the time limit for quotation, and the quoted price is higher than the minimum price, then the quotation is completed;

(2) if two or more bidders to the quotation quote the prices within the time limit for quotation, the one quoting the higher price shall be the quotation winner; if the quoted prices are the same, the one who submits the price quotation list earlier shall be the quotation winner, provided that the quoted price shall not be lower than the minimum price;

(3) if, within the time limit for quotation, no one bids for the quotation or the prices quoted by the bidders to the quotation are lower than the minimum price, then the quotation is not completed.

If, within 30 minutes before the expiry of the time limit for quotation, there are still bidders to the quotation who request for quotation, the administrative department shall regard the currently quoted price as the initial price and hold the on-the-spot quotation, while the bidder to the quotation who offers the highest price which is higher than the minimum price shall be the quotation winner.


Article 45. If a quotation is completed, the administrative department and the quotation winner shall conclude the letter on confirmation of the bargain on the spot.



CHAPTER IV SUPPLEMENTARY PROVISIONS

Article 46. The present Measures shall come into force on August 1, 2003.

In case any content in the relevant documents formulated prior to the promulgation of the present Measures is inconsistent with the present Measures, the present Measures shall prevail.

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