Mineral Legal Perspective | April 12, Ministry of Natural Resources on Public Solicitation of Opinions on Several Matters Concerning Deepening the Reform of Mineral Resources Management (Draft for Comments)

Published:

2023-04-14

On April 12, 2023, in order to implement the decisions and deployments of the Party Central Committee and the State Council on the reform of the mining rights transfer system, the reform of the oil and gas system, the strengthening of domestic exploration and development of important energy and mineral resources, and the increase of storage and production, give full play to the decisive role of the market in resource allocation, give better play to the role of the government, deepen the reform of "decentralization, management and service", improve the ability to ensure energy resources, the official website of the Ministry of Natural Resources issued an announcement on the public solicitation of opinions of the Ministry of Natural Resources on deepening the Reform of Mineral Resources Management (draft for soliciting opinions). The draft for soliciting opinions retains the original framework and has been revised on the basis of the opinions of the Ministry of Natural Resources on promoting the Reform of Mineral Resources Management (for trial implementation) (Natural Resources regulations [2019] No. 7). 1. modify background 1. Deepening the reform of mineral resources management is an important measure to implement a series of decisions and deployments of the Party Central Committee and the State Council. The Party Central Committee and the State Council have successively issued the "Overall Plan for the Reform of the Ecological Civilization System", "Several Opinions on Deepening the Reform of the Oil and Gas System", "The Reform Plan for the Mining Rights Transfer System", and "Guiding Opinions on Coordinating the Reform of the Natural Resource Asset Property Rights System." In order to implement the reform requirements of the CPC Central Committee and the State Council, document No. 7, based on the outstanding problems existing in the exploration and exploitation of mineral resources, absorbs some mature and feasible experience of the first trial, and rises to the level of mineral resources management system, so as to accumulate practical experience for the revision and exploration of the mineral resources law. 2. Deepening the reform of mineral resources management is an objective need to strengthen the domestic exploration and development of important energy mineral resources and increase storage and production. The 20th National Congress of the Communist Party of China and the Central Economic Work Conference put forward a series of requirements such as strengthening the domestic exploration and development of important energy and mineral resources, increasing storage and production, promoting the implementation of a new round of prospecting breakthrough strategic actions, and ensuring the security of the energy and resource industry chain supply chain. To implement these requirements, it is necessary to further deepen the reform of mineral resources management, study and solve new situations and new problems in the implementation, continuously improve the level of mineral resources management, and promote the exploration and development of mineral resources. 3. The reform of mineral resources management has achieved positive results. Local and market entities generally reflect that the reform of mineral resources management is strong and operational, which has effectively solved some institutional problems in mining administration for many years and plugged institutional loopholes. All localities have further standardized the transfer of mining rights, the management rights and responsibilities of departments at all levels have become clearer, and the service awareness, service level and approval efficiency have been further improved. It has effectively reduced the burden on market players and further optimized the mining business environment. 2. Amendment Principles On the basis of implementing the decisions and deployments of the Party Central Committee and the State Council on the reform of the mining rights transfer system, the reform of the oil and gas system, strengthening the domestic exploration and development of important energy and mineral resources, and increasing storage and production, the revised principles of this draft for comments are: 1. Adapt to the domestic economic situation and changes in the foreign environment, implement the requirements of the central government on the reform of mineral resources management, strengthen the domestic exploration and development of important energy and mineral resources, and increase storage and production; 2. Follow the rules of geological work and respond to the demands of society and enterprises; 3, in line with the "Mineral Resources Law" (revised draft) guiding ideology and related content; 4, the policy risk is generally controllable, the degree of consensus is high, good operation of the first introduction, see not very accurate, operational difficulties to be in-depth study and demonstration in the future. 3. Modification Highlights On the basis of retaining the framework structure and main contents of the original document, the draft for soliciting opinions focuses on the following aspects: 1. In order to solve the problem that the transfer agreement is too strict, make rational use of resources, and give full consideration to the demands reflected by local departments in charge of natural resources and mining rights holders, scattered resources around the mining rights have been set up, as well as the gap area (except for sand, gravel and soil minerals for ordinary construction) with a distance of about 300 meters between adjacent mining rights belonging to the same subject (safety production distance requirements), allows the transfer of prospecting rights and mining rights to the same subject by agreement (Article 2). 2. In order to strengthen the investment confidence of market entities and solve the problem of large deductions repeatedly proposed by enterprises, the proportion of deductions should be appropriately lowered. First, the deduction base is changed from the area contained in the first license to the area stated in the exploration license at the time of renewal, and second, the deduction ratio is adjusted from 25% to 20% (Article 7). 3. The integration of oil and gas exploration and mining is an innovative system issued by Document No. 7. Combined with the practice in the past three years, it has sorted out and refined the self-reporting integration plan, carried out the integration of exploration and mining work, registered mining rights and other links as well as the management requirements for untransferred mining, and clarified the contents of the "Integration of Oil and Gas Exploration and Mining Plan" (Article 6, Annex 2). Since the implementation of No. 4 and No. 7, more than 60 national standards and industry standards such as the Classification of Solid Mineral Resources Reserves have been completed and issued, and 10 series of mineral resources reserves management reform documents have been issued, and the reserves specified in No. 7 have been fully completed. Management reform tasks. We will continue to promote the reform of the management of mineral resources reserves and implement the new classification standards for mineral resources reserves. (Article 8 9.). 5. In order to reduce the cost of the counterpart's work, on the basis of extending the extension period of the prospecting right, the retention period of the prospecting right shall be extended from 2 years to 5 years (Article 7). 6. The WTI crude oil price, which is the basis for determining the market benchmark price of the proceeds from the transfer of oil and gas mining rights, will be revised to the Shanghai crude oil futures price (Annex 1). 7. In order to ensure the smooth progress of mining rights transactions, promote the use of guarantees or deposits in mining rights transactions and improve the competitive transfer of mining rights. (Article 1) 8. Combined with practical experience, it is clear that the evaluation of the proceeds from the transfer of mining rights shall be organized and carried out by the provincial natural resources authorities (Article 4). 9, with the "mining rights transfer transaction rules" and other documents, simplify or adjust the relevant content expression (first, third). Full text of 4. draft for comments Ministry of Natural Resources on Deepening the Management of Mineral Resources Opinions on reform of certain matters (Draft for Comments) The competent departments of natural resources of all provinces, autonomous regions and municipalities directly under the Central Government, and the Bureau of Natural Resources of Xinjiang Production and Construction Corps: In order to implement the decisions and deployments of the Party Central Committee and the State Council on the reform of the mining rights transfer system, the reform of the oil and gas system, the strengthening of domestic exploration and development of important energy and mineral resources, and the increase of storage and production, give full play to the decisive role of the market in resource allocation and better play The role of the government, deepen the reform of "decentralization, management and service", strictly observe the bottom line of resource security, optimize the spatial pattern, we hereby put forward the following opinions on deepening the reform of mineral resources management. 1. comprehensively promotes competitive transfer of mining rights Except for special circumstances such as agreement transfer, other mining rights shall be transferred through open competition in the form of bidding, auction and listing, and shall be implemented in accordance with the Rules on the Transfer of Mining Rights (Natural Capital Regulation [2023] No. 1). Promote the use of guarantees or deposits in mining rights transactions and explore the establishment of relevant rules to ensure the smooth progress of mining rights transactions. When the oil and gas (including oil, hydrocarbon natural gas, shale gas, coalbed methane, natural gas hydrate, the same below) prospecting right is transferred through competition, the starting price of the oil and gas prospecting right shall be determined according to the market benchmark price standard of the transfer income listed in Annex 1. 2. strictly controls the transfer of mining rights agreement For rare earth and radioactive mineral exploration and mining projects or key construction projects approved by the State Council, the competent department of natural resources may transfer mining rights to specific subjects by agreement. The agreement of the local competent department of natural resources to transfer the mining right shall be submitted to the local people's government at the same level for approval, and the Ministry of natural resources shall first seek the opinions of the people's government at the provincial level. Based on the consideration of mine safety production and rational development and utilization of resources, in the deep or upper part of the mining right, scattered resources around the mining right, and the gap area between adjacent mining rights belonging to the same subject about 300 meters (safety production distance requirements), the original production system needs to be used for further exploration and exploitation of mineral resources (except ordinary construction sand and gravel minerals), the exploration right and mining right can be transferred to the same subject by agreement. Such agreements are no longer reported to the local people's government. 3. actively promote the "net mine" transfer Implement the "net ore" transfer of sand and gravel mining rights, and actively promote the "net ore" transfer of other minerals. Strengthen the preparatory work for the transfer of mining rights, optimize the process of mining rights transfer, and improve service efficiency. According to the mineral resources planning, geological work results and the needs of the main body of the market, the establishment of mining rights transfer project library, in conjunction with the relevant departments, in accordance with the law to circumvent the ecological protection red line and other prohibitions to restrict the exploration and mining area, reasonably determine the scope of transfer, and do a good job with land use sea forest grass and other approval items and management policies, so that after the transfer of mining rights, mining rights holders can legally and regulations for land use for approval procedures, normal exploration and mining work. If the mining right holder is unable to carry out exploration and mining work due to the preliminary work of the transfer of mining rights, the competent department of natural resources may change or terminate the contract according to law, withdraw the mining right, and return all or part of the collected mining right transfer income in accordance with the relevant provisions. 4. implementation of the same mineral exploration right mining right transfer registration at the same level management The Ministry of Natural Resources is responsible for the transfer and registration of mining rights of 14 strategic minerals, including petroleum, hydrocarbon natural gas, shale gas, natural gas hydrate, radioactive minerals, tungsten, rare earth, tin, antimony, molybdenum, cobalt, lithium, potash salt and crystalline graphite; other strategic minerals are controlled by mineral resources planning, and the provincial natural resources department is responsible for the transfer and registration of mining rights. The remaining minerals are the responsibility of the provincial and lower natural resources authorities. The assessment of the proceeds from the transfer of mining rights shall be organized and carried out by the provincial department in charge of natural resources. 5. opens oil and gas exploration and exploitation market Domestic and foreign companies registered in the People's Republic of China with net assets of not less than 0.3 billion yuan are eligible to obtain oil and gas mining rights in accordance with regulations. Engaged in oil and gas exploration and exploitation shall meet the qualification requirements and regulations on safety and environmental protection, and shall have corresponding technical capabilities for oil and gas exploration and exploitation. 6. implementation of oil and gas exploration and production integration system If the oil and gas prospecting right owner discovers the oil and gas resources available for exploitation and decides to continue exploitation after completing the oil (gas) test operation, it can be exploited after submitting the exploration and mining integration plan (Annex 2) to the natural resources authority with registration authority within 30 days. In areas where geological reserves are proven in the course of exploration and mining, a report on mineral resources reserves shall be prepared in a timely manner for review and filing. Within 5 years of reporting the exploration and mining integration plan, the prospecting right owner shall sign a mining right transfer contract and register the mining right in accordance with the law. If the plan for the integration of exploration and mining is reported for more than 5 years and the mining rights continue to be mined without being transferred, it shall be treated as illegal mining. If the prospecting right holder decides not to continue mining after completing the oil (gas) test operation, and if the mining is completed within 5 years or cannot be transferred and the mining is stopped, the mining right registration shall no longer be processed. 7. adjust the term of prospecting right The period of registration for the new establishment, renewal and retention of prospecting rights is 5 years. 20% of the area specified in the exploration license shall be deducted when applying for the renewal registration of the exploration right (except for the deep or upper exploration of the mining right). No deduction shall be made for the scope of submitted resources for non-oil and gas or the scope of submitted proven geological reserves for oil and gas. The oil and gas prospecting right may deduct the same area of other blocks of the prospecting right owner in the same basin, but the newly transferred oil and gas prospecting right shall not be used to deduct the area of other blocks of the prospecting right owner within five years. If there is an agreement in the contract for the assignment of prospecting rights, it shall be executed in accordance with the contract. 8. implementation of new mineral resource reserve classification Mineral resources management and planning, policy formulation, mineral resources exploration and exploitation, resource reserve estimation and evaluation, mineral resources statistics and release, and the formulation of relevant technical standards shall implement the "Solid Mineral Resources Reserves Classification" (GB/T 17766-2020), "Oil and Gas Mineral Resources Reserves Classification" (GB/T 19492-2020) and the current national standards and specifications such as geothermal and mineral water. 9. Strengthening Mineral Resources Reserves Review and Filing The competent department of natural resources shall implement the legal requirements of the state of mineral resources, perform the duties of the owner of mineral resources, review and record the reserves of mineral resources declared by the mining right holder or the project construction unit upon application, and issue review and record documents. The competent department of natural resources may entrust the mineral resources reserve evaluation institution to organize the evaluation and filing work according to the scope and authority of the evaluation and filing, and the relevant expenses shall be included in the financial budget. 10. clarify the scope and authority of review and filing Mineral resources reserves report conforming to relevant standards and specifications shall be prepared if the proven geological reserves of oil and gas minerals during exploration and mining, other minerals accumulatively found significant changes in mineral resources during mining (with changes exceeding 30% or above medium-sized scale), and construction projects overburden important minerals, application for review and filing. No review and filing shall be conducted on the reasons for the retention or change of prospecting rights, the continuation, transfer or transfer of prospecting and mining rights, the closure of mines, and the financing of listing. The Ministry of Natural Resources is responsible for the review and filing of mineral resources reserves for which exploration licenses or mining licenses have been issued at the same level, and the other is the responsibility of the provincial natural resources authority. If the construction project is involved in overlaying important minerals, the provincial natural resources department shall be responsible for the review and filing, except for petroleum, (hydrocarbon) natural gas, shale gas, natural gas hydrate and radioactive mineral resources. XI. Standardizing the geological exploration work with financial contributions The central or local financial-funded exploration projects shall not set up exploration rights, and geological exploration work shall be carried out on the basis of the project task book. If the prospecting right has been established before December 31, 2019, the competent department of natural resources may continue to handle the renewal of the prospecting right and cancel the prospecting right after completing the prescribed prospecting work. This opinion shall be implemented from the date of issuance and shall be valid for five years. If other documents issued before the implementation of this opinion are inconsistent with the provisions of this opinion, this opinion shall be followed.

Key words: