NOTICE OF THE MINISTRY OF STATE LAND AND RESOURCES CONCERNING FURTHER REGULATING THE MANAGEMENT OF REMISING OF MINING INDUSTRY RIGHTS

Ministry of State Land and Resources

Notice of the Ministry of State Land and Resources concerning Further Regulating the Management of Remising of Mining Industry Rights

Guo Tu Zi Fa [2006] No. 12

The departments of state land and resources (departments of state land, environment and resources, bureaus of state land and resources,
bureaus of state land, resources and housing, bureaus of housing, land and resources) of all provinces, autonomous regions, and municipalities
directly under the Central Government, and the Bureau of State Land and Resources of Xinjiang Production and Construction Corps:

Since the Measures for the Administration of Invitation to Bid, Auction, and Quotation Concerning Mineral Prospecting Rights and Mining
Rights (For Trial Implementation) (Guo Tu Zi Fa [2003] No. 197) were issued in 2003, the national mining industry right market construction
has been made an active progress. In light of the laws and regulations on mineral resources, and according to the requirement
of the Notice of the State Council concerning Rectifying and Regulating the Mineral Recourse Exploration Order in an All-around Way
(Guo Fa [2005] No. 28), a supplementary Notice on perfecting relevant matters as mentioned in the Measures for the Administration
of Invitation to Bid, Auction, and Quotation Concerning Mineral Prospecting Rights and Mining Rights is hereby given as follows:

I.

Classification and ways of remising of mining industry rights

In accordance with the statutory power issued prospecting permits or mining permits, the competent department of state land and
resources of the people’s governments at the county level and above shall take charge of the remising of mining industry rights
in light of the law.

(1)

Under the prospecting of Class 1 minerals listed in the Classified Catalogue for the Prospecting and Exploitation of Minerals (hereinafter
refers to as the Classified Catalogue, see appendix) and lies in the blank area of mineral prospecting work or in areas where mineral
prospecting has been carried out but further mineral prospecting place has not been obtained, the mineral prospecting right shall
be remised in light of the principle of “he who applies first gets registered first”.

(2)

The mineral prospecting rights shall be remised by bidding, auction or quotation in any of the situations as follows.

(a)

Class II minerals listed in the Classified Catalogue; or

(b)

For Class I mineral listed in the Classified Catalogue, mineral prospecting has been carried out and ore-field has been obtained for
further prospecting or prior mining activities shows there exists ore-field for further prospecting.

(3)

Prospecting right may not be created, the mining right shall be remised directly by bidding, auction or quotation in any of the situations
as follows.

(a)

Class III minerals listed in the Classified Catalogue;

(b)

For an ore-field with Class I and Class II mineral listed in the Classified Catalogue, the prospecting right has not been existed,
but the mineral prospecting has reached the extent of sifting prospecting or higher level, and the ore-field meets the exploitation
design requirements; or

(c)

For an ore-field with Class I and Class II mineral listed in the Classified Catalogue, the prospecting right has not been existed
, or prospecting activities have ever been carried out therein, and it is found upon verification that exist the mineral deposit
amount for mining or mineral resource with economic value.

(4)

The prospecting and exploitation of oil, natural gas, coal-bed gas, uranium and thorium mineral resources shall be managed and be
gradually consummated according to the prevailing provisions.

(5)

Where the remising of a prospecting right or mining right by bidding, auction or quotation is in the any of situations as follows,
the remising shall be effected by the way of the agreement after approval is obtained.

(a)

An ore-field of important mineral resource development projects approved by the State Council or an ore-field that provides matching
resources for important construction projects approved by the State Council;

(b)

The adjacent areas where it is needed to integrate the already established mining rights or to expand the prospecting and exploitation
circle by use of the original production system;

(c)

A large-scale mineral resource development project which is approved by the people’s government of the province (district or city)
and a formal document has been submitted to the Ministry of State Land and Resources for approval; or

(d)

A project financed by the state in order to search for an ore-field as a resource substitute for a mine in crisis.

The remising of prospecting right or mining right under the agreement shall be subjected to collective review and control in a rigorous
manner. The price of a prospecting right or mining right remised under the agreement shall not be lower than the market price in
similar conditions.

(6)

A prospecting right or mining right shall be remised by biding in any of situations as follows.

(a)

According to laws or regulations or the state policies, an area for which a new mineral prospecting right or mining right may be established
because it is environmentally sensitive or does not meet the environment and quality standards prescribed by the state;

(b)

The ore-field has many joint or associated compositions and the technical level requirement for comprehensive development and utilization
is high; or

(c)

Other situations prescribed in the plan on mineral resources.

II.

Other provisions

(1)

In case a prospecting right holder applies for the mining right in its prospecting area, it shall be approved if it meets the relevant
provision and its legitimate rights and interests shall be protected s.

(2)

If the prospecting application and mining application simultaneously for a same area, and it is found upon examination that the conditions
for setting a mining right are met, when an competent department of state land and resources handle the applications for any mining
industry right, a mining right shall be set according to the provisions of this Notice.

(3)

The competent department of state land and resources of each province (district or city) shall clear up and announce those ore-fields
that have been carried out mineral prospecting and mining activities and do not meet the provisions of this Notice on the remising
of the prospecting rights to the ore-fields subject to priority in application, and report the relevant information to the Ministry
of State Land and Resources for archival purposes.

(4)

In accordance with the actual situation of the area as well as the depth, geological structure and other considerations of the local
minerals prospect, the competent department of state land and resources of each province (district or city) may properly adjust
the way of remising of mining industry rights, formulate detailed administrative measures and report them to the Ministry of State
Land and Resources for archival purposes. In case it is necessary to formulate separate provisions on other special situations,
such provisions shall be implemented until they are approved by the Ministry of State Land and Resources.

(5)

The provisions of this Notice shall be more powerful than the contents in Articles 7 through 9 of the Measures for the Administration
of Invitation to Bid, Auction, and Quotation Concerning Mineral Prospecting Rights and Mining Rights (For Trial Implementation).
The competent departments of state land and resources of each province (district or city) shall clear up all former relevant provisions
according to the requirements of this Notice.

Appendix: Classified Catalogue for the Prospecting and Exploitation of Minerals(Omitted)

Ministry of State Land and Resources

January 24, 2006