Mineral Law Perspective | Brief Analysis and (III) of Mineral Resources Overburden Practice
Published:
2024-05-15
Mineral resource overburden means that the identified mineral resources cannot be developed and utilized due to the implementation of construction projects or planning projects. Mineral resources overburden disputes are characterized by many controversial focuses, low compensation standards, long resolution cycles, and different judicial decisions. This series of tweets intends to sort out the practical problems of mineral overburden, with a view to helping all parties to effectively safeguard their legitimate rights and interests.
Mineral resource overburden means that the identified mineral resources cannot be developed and utilized due to the implementation of construction projects or planning projects. Mineral resources overburden disputes are characterized by many controversial focuses, low compensation standards, long resolution cycles, and different judicial decisions. This series of tweets intends to sort out the practical problems of mineral overburden, with a view to helping all parties to effectively safeguard their legitimate rights and interests.
Compensation/Compensation Standard for Mineral Resources Overburden Disputes
1. direct loss compensation standard
1. Relevant regulations
Item (III) of Article 4 of the Circular of the former Ministry of Land and Resources on Further Doing a Good Job in the Examination and Approval and Administration of Construction Projects Overlaying Important Mineral Resources (No. 137 [2010] of the Ministry of Land and Resources, hereinafter referred to as "Document No. 137") stipulates:
If the construction project has overlaid the mineral resources with mining rights, the new land use right holder shall also sign an agreement with the mining right holder at the same time, which shall include the mining right holder's agreement to give up the scope of the overlaid mining area and the relevant compensation content. The scope of compensation in the compensation agreement should, in principle, include: first, the price payable by the mining right holder under the current market conditions of the overlaid resource reserves.
2. Judicial jurisprudence
The Supreme People's Court in the "Shanxi Transportation Holding Group Co., Ltd. Xinzhou North Expressway Branch [Original Linghe Expressway (Original Shensection) Construction Management Office], Shenchi County Xiangyang Stone Purchase and Sale Co., Ltd. Property Rights Protection Dispute Retrial Review and Trial Supervision Civil Ruling ([2019] Supreme Fa Min Shen No. 1285)" found that "the original judgment considered the original Shenzhou section of Linghe Expressway constructed by the Expressway Branch was" Shanxi Expressway Network Planning an important part, involving the public interest, so refer to the provisions of No. 137, in accordance with the principle of direct loss of compensation for overlaid minerals to deal with, will be Xiangyang Company should be compensated for the scope of the loss identified as direct loss, deduction of judicial appraisal opinion beyond the direct loss of the assessed value ...... is not improper."
The standard of compensation for 2. direct losses plus expected profits.
1. Guiding spirit
(1) The General Office of the Central Committee of the Communist Party of China and the General Office of the State Council issued the Guiding Opinions on Coordinating the Reform of the Property Rights System of Natural Resources Assets (issued and implemented on April 14, 2019):
Establish and improve the compensation system for the occupation of various types of natural ecological space and overburden minerals in accordance with the law, strictly enforce the conditions for occupation, and raise the compensation standard.
The document defines the guiding spirit of "raising the standard of compensation" at the national level.
(2) Article 3 of Document No. 137 stipulates:
The overlaying of important mineral resources by a construction project shall be examined and approved by the competent administrative department of land and resources at or above the provincial level. The Ministry of Land and Resources shall be responsible for the examination and approval of those who cover oil, natural gas and radioactive minerals, or cover the minerals (except oil, natural gas and radioactive minerals) listed in the appendix of the measures for the Registration and Administration of Mineral Resources exploitation, or those whose cumulative reserves have reached the scale of large-scale mining areas and cover more than 1/3 of them.
Therefore, for the compensation standard of mineral resources compensation agreement that only needs to be approved by the administrative department of natural resources at or above the provincial level, we need to pay attention to whether there are detailed regulations in each province.
2. Specific provincial regulations
Article 4 of the Notice of the Department of Land and Resources of Hunan Province on Issues Concerning Compensation for Construction Projects Overlaid Mineral Resources (No. 17 [2013] of Hunan Province) stipulates:
The contents and standards of compensation are divided into the following two situations: 1. If the prospecting right or the proven resource reserve mineral area of the geological survey funded by the state is overlaid, the compensation shall be made in principle according to the verified workload and the working cost calculated by the current budget standard. 2. In the case of overlaying non-state-funded mining rights, compensation shall be made in principle in accordance with the following scope and standards of compensation, and the specific compensation shall be determined by both parties through consultation. ① acquisition cost of mining rights in the overlaid area; ② exploration investment in the overlaid area and average profit of industry investment; ③ investment in overlaid mining rights plus average profit of similar mining industry investment minus the return on investment earned.
In the first case, the compensation fee shall be paid by the construction unit to the finance, and shall be used by the land and resources department for geological prospecting and mining development, and shall not be used for other expenses; in the second case, the construction unit shall pay the compensation fee directly to the mining right owner.
3. mining rights value compensation standard.
1. Relevant regulations
(1) Article 3 of the Interim Provisions on the Administration of the Transfer of Mining Rights (No. 309 [2000] of the Ministry of Land and Resources) stipulates:
Prospecting rights and mining rights are property rights, collectively referred to as mining rights, which apply to the principles of adjustment of real estate laws and regulations. Natural persons, legal persons or other economic organizations that have obtained mining rights in accordance with the law are called mining rights owners. The mining right holder shall have the right to possess, use, profit and dispose of his mining right in accordance with the law.
(2) Article 238 of the Civil Code states:
If the infringement of property rights causes damage to the right holder, the right holder may request compensation for the damage or other civil liability. If the property of another person is infringed upon, the loss of the property shall be calculated in accordance with the market price at the time of the loss or by other means.
2. Judicial jurisprudence
The Jiangxi Provincial Higher People's Court determined that the case was a prospecting right infringement in the "Civil Judgment of the Second Instance of Jiangxi Expressway Investment Group Co., Ltd. and Yichun Xinyun Trading Co., Ltd. ([2018] Ganmin Final No. 431)" The calculation method of loss compensation is that the court of first instance determined that "High Investment Corporation and Changli Project Office have obvious tort liability and should bear tort compensation liability. Gaotou Company and Changli Project Office claim to calculate the relevant losses of the plaintiff according to the actual investment amount of the prospecting right involved in this case. However, according to the provisions of the the People's Republic of China Tort Liability Law, if the property of others is infringed, the property loss shall be calculated according to the market price at the time of the loss or other methods. Therefore, the relevant losses of the plaintiff shall be calculated according to the actual market value of the prospecting right involved in this case".
In summary, there are three kinds of compensation/compensation standards for overlaying mineral resources, and according to different cases, the previous judicial precedents on the compensation standards for overlaying mineral resources are not completely consistent. In order to better safeguard the interests of the parties, in the trial of this kind of dispute, we should not only consider the direct loss compensation standard determined by No. 137, but also consider the relevant provisions of the Civil Code and the specific circumstances of the case.
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