DECISION OF THE STANDING COMMITTEE OF THE NATIONAL PEOPLE’S CONGRESS ON AMENDING THE MINERAL RESOURCES LAW

    The 21st Meeting of the Standing Committee of the Eighth National People’s
Congress has decided to make the following amendments to the Mineral Resources
Law of the People’s Republic of China:

    1. The first paragraph of Article 3 is amended as: “Mineral resources
shall be owned by the state. The State Council shall exercise the ownership
of mineral resources on behalf of the state. The state ownership of mineral
resources, either near the earth’s surface or underground, shall not change
with the ownership or right to the use of the land which the mineral resources
are attached to.”

    The third paragraph of Article 3 is amended as: “Anyone who wishes to
explore and exploit mineral resources shall apply for the rights of
exploration and mining separately according to law and acquire them with
approval, and shall go through registration, except those mining enterprises
which conduct the exploration operations for their own production within the
defined mining areas when having acquired the mining right according to law.
The state shall protect rights of exploration and mining from violation and
protect order in production and other work in the mining and exploration areas
from interference and disruption.”

    Add a new paragraph thereto as the fourth paragraph: “Anyone who is
engaged in the exploration and exploitation of mineral resources shall be
qualified to meet requirements.”

    2. The Article 4 is amended as: “The state shall guarantee the lawful
rights and interests of mining enterprises established according to law in the
exploitation of mineral resources.

    “The state-owned mining enterprises shall be the principal force in
exploiting mineral resources. The state shall guarantee the consolidation and
expansion of state-owned mining industry.”

    3. The Article 5 is amended as: “The state shall adopt the system by which
the rights of exploration and mining are to be acquired with compensation.
However, the compensation for the acquisition of the exploration and mining
rights may be reduced or exempt by the state according to circumstances. The
specific measures and implementation procedures shall be formulated by the
State Council.

    “Anyone who exploits mineral resources must pay resources tax and
compensation in accordance with relevant state provisions.”

    4. The fourth paragraph of Article 3 is changed into Article 6 and amended
as: “Exploration and mining rights may not be transferred with the exception
of those as prescribed by the following provisions:

    “(1) The explorer shall be enpost_titled to conduct the approved exploration
operations within the defined exploration area and to enjoy priority in the
acquisition of the mining right in the area. He may transfer his exploration
right to another person with lawful approval, provided that the minimum
investment in the exploration has been made as required.

    “(2) In the event of the merger or division of enterprise, or joint
investment or joint operation with others, or in the event of a sale of assets
or other changes in assets property which need change in the owner of mining
right, a mining enterprise vested with the mining right may transfer its right
to another person for mining with lawful approval.

    “The State Council shall formulate the specific measures and
implementation procedures for the provisions in the preceding paragraph.

    “It is forbidden to resell rights of exploration and mining for profit.”

    5. Article 10 is changed into Article 12 and amended as: “The state shall
adopt a unified registration system for mineral exploration areas. The
department in charge of geology and mineral resources under the State Council
shall be responsible for registering the exploration of mineral resources. The
State Council may authorize relevant departments to handle registration of the
exploitation of special kinds of mineral ores. The procedures for registration
of mineral exploration areas shall be formulated by the State Council.”

    6. The first paragraph of Article 13 and Article 26 are combined as
Article 15 and amended as: “Anyone who intends to establish a mining
enterprise shall be qualified as required by the state, and the approval
authority shall examine his application as to the limits of the mining area,
design or mining plan, production technique and safety and environmental
protection measures in accordance with the law and relevant state provisions.
Approval shall be granted if it finds the enterprise meets these requirements.”

    7. The second paragraph of Article 13 and Article 14 are combined as
Article 16 and amended as: “The exploitation of the following mineral
resources shall be subject to the approval of the department in charge of
geology and mineral resources under the State Council and a mining licence
shall be issued upon approval.

    “(1) mineral resources within the mining areas which are to be exploited
under the state plan, and which are of great value to the national economy;

    “(2) mineral resources of at least large-scale recoverable reserves
outside the areas prescribed in the preceding item;

    “(3) special kinds of minerals for which protective mining is prescribed
by the state;

    “(4) mineral resources within the territorial seas and other sea areas
under the jurisdiction of China; or

    “(5) other kinds of minerals prescribed by the State Council.

    “The exploitation of special kinds of minerals such as petroleum, natural
gas and radioactive minerals may be approved by the relevant departments
authorized by the State Council and a mining licence shall be issued upon
approval.

    “The exploitation of other mineral resources than those prescribed in the
first and second paragraphs shall, if their recoverable reserves are medium in
scale, be subject to the approval of the departments in charge of geology and
mineral resources of the people’s governments of provinces, autonomous regions
and municipalities directly under the Central Government and a mining licence
shall be issued upon approval.

    “Procedures for the administration of exploiting other mineral resources
than those prescribed in the first, second and third paragraphs shall be
formulated according to law by the standing committees of the people’s
congresses of provinces, autonomous regions, or municipalities directly under
the Central Government.

    “Materials regarding the examination and approval of mineral exploitation
and the issuance of mining licences under the provisions of the third and
fourth paragraphs shall be collected and reported by the departments in charge
of geology and mineral resources of the people’s governments of provinces,
autonomous regions and municipalities directly under the Central Government to
the State Council for the record.

    “The standard for dividing mineral reserves into large- and medium-scale
reserves shall be set by the mineral reserves approval agency of the State
Council.”

    8. The third paragraph of Article 16 and Article 36 are combined as
Article 19 and amended as: “Local people’s governments at various levels shall
take measures to maintain the normal order in mining areas of state-owned
mining enterprises and other mining enterprises which are located within their
administrative regions.

    “No unit and individual may enter and mine in mining areas of state-owned
mining enterprises and other mining enterprises which are established by
others according to law.”

    9. Article 34 is changed into Article 35 and a new paragraph added thereto
as the second paragraph: “Individuals are prohibited from exploiting mineral
resources which reserves are suitable for a mining enterprise to mine, special
kinds of minerals for which protective mining is prescribed by the state, and
other mineral resources for which mining by individuals is prohibited by the
state.”

    10. Article 39 is amended as: “Anyone who, in violation of the provisions
of this Law, mines without a mining licence, enters without authorization and
mines in mining areas that the state has planned to develop, or in mining
areas with ores of significant value to the national economy, or exploits
special kinds of minerals that the state has prescribed for protective
exploitation shall be ordered to stop excavation, compensate for the losses
caused, have his extracted mineral products and unlawful proceeds confiscated,
and may be fined concurrently. If the party refuses to stop mining and thus
causes damage to mineral resources, the persons directly responsible shall be
investigated for criminal responsibility in accordance with the provisions of
Article 156 of the Criminal Law.

    “Any unit or individual who enters and mines in mining areas of the
state-owned and other mining enterprises which are established by others
according to law shall be punished according to the provisions of the
preceding paragraph.”

    11. The second paragraph of Article 42 is amended as: “Anyone who, in
violation of the provisions of Article 6 of this Law, resells rights of
exploration and mining for profit shall have his unlawful proceeds
confiscated, be fined and have his exploration and mining licences revoked.”

    12. Article 44 is amended as: “Anyone who, in violation of the provisions
of this Law, exploits mineral resources in a destructive way shall be fined
and may have his mining licence revoked; If heavy damage has been caused to
mineral resources, the persons directly responsible shall be investigated for
criminal responsibility in accordance with the provisions of Article 156 of
the Criminal Law.”

    13. Article 45 is amended as: “The administrative penalties prescribed in
Articles 39, 40 and 42 of this Law shall be decided by departments in charge
of geology and mineral resources under the people’s governments at or above
the county level within the limits of their authority prescribed by the
department in charge of geology and mineral resources under the State Council.
The administrative penalties prescribed in Article 43 shall be decided by
administrative departments for industry and commerce under the people’s
governments at or above the county level. The administrative penalties
prescribed in Article 44 shall be decided by departments in charge of geology
and mineral resources under the people’s governments of provinces, autonomous
regions, or municipalities directly under the Central Government. The penalty
of revoking the exploration and mining licences shall be decided by the
departments that issue the licences.

    “If any department fails to give an administrative penalty, when it ought
to do so in accordance with the provisions of Articles 39, 40, 42 and 44, the
department in charge of geology and mineral resources under the people’s
government at the higher level shall have the authority to order it to make
corrections or shall directly give the administrative penalty.”

    14. Article 46 is amended as: “A party who refuses to accept the decision
on administrative penalties may apply for reconsideration according to law or
may directly bring suit in a people’s court according to law.

    “If the party neither applies for reconsideration nor brings suit in a
people’s court nor complies with the decision on administrative penalties
within the time limit, the agency that made the decision shall request the
people’s court to compel execution of the decision.”

    15. Add a new article as Article 47: “If any of state functionaries who
supervises and administers the exploration and exploitation of mineral
resources or any of other relevant state functionaries, by engaging in
malpractice for his personal gains, abusing his power or neglecting his duty
and in violation of the provisions of this Law, grants an approval of the
exploration and exploitation of mineral resources and issues exploration and
mining licences, or fails to check and punish the unlawful mining activities
according to law, when a crime has been constituted, the offender shall be
investigated for criminal responsibility according to law; a disciplinary
sanction shall be given when the action does not constitute a crime. The
department in charge of geology and mineral resources under the people’s
government at the higher level shall have the authority to withdraw the
exploration and mining licences issued unlawfully.

    16. Add a new article as Article 48: “Whoever by means of force or threat
obstructs the performance of duty by a state functionary who supervises and
administers the exploration and exploitation of mineral resources according to
law shall be investigated for criminal responsibility in accordance with the
provisions of Article 157 of the Criminal Law. If anyone, without resorting to
force and threat, refuses or obstructs the performance of duty by a state
functionary who supervises and administers the exploration and exploitation of
mineral resources according to law, the public security organ shall punish him
in accordance with the provisions of the Regulations on Administrative
Penalties for Public Security.”

    17. Add a new article as Article 50: “If there are other provisions in
laws and regulations concerning the exploration and exploitation of mineral
resources with foreign investment, such provisions shall apply.”

    18. “State-operated mining enterprises” mentioned in this Law shall be
amended as “state-owned mining enterprises” and “collective mining enterprises
of villages and towns” amended as “collective mining enterprises”.

    This Decision comes into force on January 1, 1997.

    Chapter I    General Provisions

    Chapter II   Registration for Mineral Exploration and Examination and

                 Approval of Mineral Exploitation

    Chapter III  Mineral Exploration

    Chapter IV   Mineral Exploitation

    Chapter V    Collective Mining Enterprises and Mining by Individuals

    Chapter VI   Legal Liability

    Article 1  This Law is formulated in accordance with the Constitution of
the People’s Republic of China, with a view to developing the mining industry,
to promoting the exploration, development, utilization and protection of
mineral resources and to ensuring the present and long-term requirements of
socialist modernization.

    Article 2  This Law must be observed in exploring and exploiting mineral
resources within the territory of the People’s Republic of China and in the
sea areas under its jurisdiction.

    Article 3  Mineral resources shall be owned by the state. The State
Council shall exercise the ownership of mineral resources on behalf of the
state. The state ownership of mineral resources, either near the earth’s
surface or underground, shall not change with the ownership or right to the
use of the land which the mineral resources are attached to.

    The state shall safeguard the rational development and utilization of mineral resources. Seizing or damaging
mineral resources by any means and by
any organization or individual shall be forbidden. People’s governments at all
levels must make serious efforts to protect mineral resources.

    Anyone who wishes to explore and exploit mineral resources shall apply for
the rights of exploration and mining separately according to law and acquire
them with approval, and shall go through registration, except those mining
enterprises which conduct the exploration operations for their own production
within the defined mining areas when having acquired the mining right
according to law. The state shall protect rights of exploration and mining
from violation and protect order in production and other work in the mining
and exploration areas from interference and disruption.

    Anyone who is engaged in the exploration and exploitation of mineral
resources shall be qualified to meet requirements.

    Article 4  The state shall guarantee the lawful rights and interests of
mining enterprises established according to law in the exploitation of mineral
resources.

    The state-owned mining enterprises shall be the principal force in
exploiting mineral resources. The state shall guarantee the consolidation and
expansion of state-owned mining industry.

    Article 5  The state shall adopt the system by which the rights of
exploration and mining are to be acquired with compensation. However, the
compensation for the acquisition of the exploration and mining rights may be
reduced or exempt by the state according to circumstances. The specific
measures and implementation procedures shall be formulated by the State
Council.

    Anyone who exploits mineral resources must pay resources tax and
compensation in accordance with relevant state provisions.

    Article 6  Exploration and mining rights may not be transferred with the
exception of those as prescribed by the following provisions:

    (1) The explorer shall be enpost_titled to conduct the approved exploration
operations within the defined exploration area and to enjoy priority in the
acquisition of the mining right in the area. He may transfer his exploration
right to another person with lawful approval, provided that the minimum
investment in the exploration has been made as required.

    (2) In the event of the merger or division of enterprise, or joint
investment or joint operation with others, or in the event of a sale of assets
or other changes in assets property which need change in the owner of mining
right, a mining enterprise vested with the mining right may transfer its right
to another person for mining with lawful approval.

    The State Council shall formulate the specific measures and implementation
procedures for the provisions in the preceding paragraph.

    It is forbidden to resell rights of exploration and mining for profit.

    Article 7  With regard to the exploration and development of mineral
resources, the state shall practise the policy of unified planning, rational
distribution, comprehensive exploration, rational exploitation and
comprehensive utilization.

    Article 8  The state shall encourage scientific-technical research on the
exploration and development of mineral resources, popularize advanced
technology and raise the scientific-technical level of mineral exploration and
development.

    Article 9  Any organization or individual that has achieved remarkable
success in the exploration, development and protection of mineral resources
and in scientific-technical research shall be rewarded by the people’s
governments at various levels.

    Article 10  In exploiting mineral resources in national autonomous areas,
the state shall give due consideration to the interests of those areas and
make arrangements favourable to the areas’ economic construction and to the
production and livelihood of the people of local minority nationalities.

    The organs of self-government of national autonomous areas shall, in
accordance with legal provisions and the unified state plan, have priority for
rationally developing and utilizing the mineral resources that may be
developed by local authorities.

    Article 11  The department in charge of geology and mineral resources
under the State Council shall be responsible for supervision and
administration of the exploration and development of mineral resources
throughout the country. Other departments concerned under the State Council
shall assist the department in change of geology and mineral resources under
the State Council in supervising and administering the exploration and
exploitation of mineral resources.

    Article 12  The state shall adopt a unified registration system for
mineral exploration areas. The department in charge of geology and mineral
resources under the State Council shall be responsible for registering the
exploration of mineral resources. The State Council may authorize relevant
departments to handle registration of the exploitation of special kinds of
mineral ores. The procedures for registration of mineral exploration areas
shall be formulated by the State Council.

    Article 13  The mineral reserves approval agency of the State Council or
mineral reserves approval agencies of provinces, autonomous regions, and
municipalities directly under the Central Government shall be responsible for
the examination and approval of the prospecting reports to be used for mine
construction designing and shall, within the prescribed time limit, give
official replies to the units that submitted the reports. Unless a prospecting
report is approved, it may not be used as the basis for mine construction
designing.

    Article 14  Archives of mineral exploration results and statistics of
reserves of various kinds of minerals shall be subject to unified management,
and shall be collected or compiled for submission to the competent authorities
in accordance with the stipulations of the State Council.

    Article 15  Anyone who intends to establish a mining enterprise shall be
qualified as required by the state, and the approval authority shall examine
his application as to the limits of the mining area, design or mining plan,
production technique and safety and environmental protection measures in
accordance with the law and relevant state provisions. Approval shall be
granted if it finds the enterprise meets these requirements.

    Article 16  The exploitation of the following mineral resources shall be
subject to the approval of the department in charge of geology and mineral
resources under the State Council and a mining licence shall be issued upon
approval.

    (1) mineral resources within the mining areas which are to be exploited
under the state plan, and which are of great value to the national economy;

    (2) mineral resources of at least large-scale recoverable reserves outside
the areas prescribed in the preceding item;

    (3) special kinds of minerals for which protective mining is prescribed by
the state;

    (4) mineral resources within the territorial seas and other sea areas
under the jurisdiction of China; or

    (5) other kinds of minerals prescribed by the State Council.

    The exploitation of special kinds of minerals such as petroleum, natural
gas and radioactive minerals may be approved by the relevant departments
authorized by the State Council and a mining licence shall be issued upon
approval.

    The exploitation of other mineral resources than those prescribed in the
first and second paragraphs shall, if their recoverable reserves are medium in
scale, be subject to the approval of the departments in charge of geology and
mineral resources of the people’s governments of provinces, autonomous regions
and municipalities directly under the Central Government and a mining licence
shall be issued upon approval.

    Procedures for the administration of exploiting other mineral resources
than those prescribed in the first, second and third paragraphs shall be
formulated according to law by the standing committees of the people’s
congresses of provinces, autonomous regions, or municipalities directly under
the Central Government.

    Materials regarding the examination and approval of mineral exploitation
and the issuance of mining licences under the provisions of the third and
fourth paragraphs shall be collected and reported by the departments in charge
of geology and mineral resources of the people’s governments of provinces,
autonomous regions and municipalities directly under the Central Government to
the State Council for the record.

    The standard for dividing mineral reserves into large- and medium-scale
reserves shall be set by the mineral reserves approval agency of the State
Council.

    Article 17  Mining areas which are to be exploited under the state plan,
those which are of great value to the national economy and special kinds of
minerals for which protective mining is prescribed by the state, shall be
exploited by the state in a planned way. No unit or individual may be
permitted to exploit them without the approval of the department in charge
under the State Council.

    Article 18  After defining, according to law, the limits of the mining
areas that are to be exploited under the state plan, mining areas that are of
great value to the national economy and mining areas of mining enterprises,
the competent departments responsible for defining such areas shall inform the
relevant people’s government at the county level to make a public announcement.

    Any change in the mining area of a mining enterprise must be reported to
and approved by the original approval department, and a new mining licence
must be obtained from the department that issued the original mining licence.

    Article 19  Local people’s governments at various levels shall take
measures to maintain the normal order in mining areas of state-owned mining
enterprises and other mining enterprises which are located within their
administrative regions.

    No unit and individual may enter and mine in mining areas of state-owned
mining enterprises and other mining enterprises which are established by
others according to law.