Minerals Legal Perspective. Is it illegal to sell mineral products with only prospecting rights?
Published:
2024-09-30
According to Article 6 of the detailed rules for the implementation of the the People's Republic of China and Mineral Resources Law, prospecting right refers to the right to explore mineral resources within the scope of the exploration license obtained in accordance with the law. Mining right refers to the right to mine mineral resources and obtain the mined mineral products within the scope of the mining license obtained in accordance with the law. According to the above definition, the owner of the mining right can only sell the mined mineral after obtaining the mining right. So, if the owner of the mining right only obtains the prospecting right, is it necessarily illegal to sell the mined mineral?
According to Article 6 of the detailed rules for the implementation of the the People's Republic of China and Mineral Resources Law, prospecting right refers to the right to explore mineral resources within the scope of the exploration license obtained in accordance with the law. Mining right refers to the right to mine mineral resources and obtain the mined mineral products within the scope of the mining license obtained in accordance with the law. According to the above definition, the owner of the mining right can only sell the mined mineral after obtaining the mining right. So, if the owner of the mining right only obtains the prospecting right, is it necessarily illegal to sell the mined mineral?
1. cases
On May 31, 2018, the Natural Resources Bureau confirmed that China Coal Corporation mined 298764 tons of coal from June to December 2013, with sales revenue of 0.02714 billion yuan; from January to October 2014, China Coal Corporation mined 612356 tons of coal, with sales revenue of 0.06159 billion yuan; From January to May 2018, China Coal Corporation mined 122778 tons of coal, with sales revenue of 0.01516 billion yuan. On September 27, 2018, the Bureau of Natural Resources issued a decision on administrative penalty No. 8 of HuGuotuzi Penalty (Mine) (2018). The contents of the decision are as follows: 1. Order to stop illegal mining activities; 2. Confiscation of illegal income of 103914068.4 yuan; 3. A fine of 51957034.2 yuan (illegal income of 103914068.5 yuan × 50%), with a total fine of 155871102.6 yuan.
The court held that the plaintiff, China Coal Company, claimed that it had obtained the exploration right for two years in 2013, and carried out the trial operation of a single project according to the sixth division's "reply on the trial operation of the 106 coal mine reconstruction and expansion project of China Coal Energy Xinjiang Tianshan Coal and Electricity Co., Ltd." Document No. 20 [2014]. During the trial operation, the coal that can be explored and mined according to the approved scope belongs to the law belongs to the engineering coal. The Court believes that whether the mining behavior of China Coal Company during the trial operation is illegal and whether there is engineering coal, the Natural Resources Bureau did not determine the fact during the administrative penalty, and the defendant Natural Resources Bureau made the call for land and capital penalty decision (mine). The 2018 No. 8 administrative penalty decision is unclear and should be revoked.
2. legal basis
According to the above cases, it can be seen that the sale of minerals is not necessarily illegal when the owner of the mining right has only the right to explore. According to Article 16 of the Detailed Rules for the Implementation of the the People's Republic of China Mineral Resources Law, prospecting rights holders have the following rights: (7) to sell on their own mineral products recovered in accordance with the approved engineering design and construction during the exploration, except for mineral products that are uniformly purchased by designated units as stipulated by the State Council.
3. considerations
The prospecting right holder shall pay attention to the following issues when selling minerals in the course of exploration:
(I) prospecting engineering design shall be approved
The mining right holder can only mine and sell mineral products after obtaining the mining right. The Rules for the Implementation of the the People's Republic of China Mineral Resources Law authorizing prospecting rights holders to sell mineral products recovered in prospecting as exceptions to mining rights should be strictly controlled. In order to prevent the prospecting right holder from using the name of prospecting to mine and sell mineral products and deliberately exaggerating the design scheme of the engineering design, the design scheme of the prospecting project should be approved by the relevant departments before the prospecting right holder makes sales.
(II) sales of mineral products are limited to recycled mineral products
The main purpose of the state authorizing the prospecting right person to sell the recovered mineral products is to make effective use of resources and avoid the loss of value of some ore due to long-term inability to be reasonably disposed of due to excavation and construction during the prospecting process, rather than the economic compensation of the prospecting right person. Therefore, the legal sale of mineral products at the prospecting stage must be carried out in accordance with the approved prospecting engineering design scheme, and the mineral products recovered in excess shall not exceed the scope of construction, nor shall they be directly mined for sale.
(III) shall be approved by the competent department of natural resources before sale
Some provinces and regions require prospecting rights holders to go through the approval of the natural resources department before selling recovered minerals. For example, Article 10 of the "Regulations on the Administration of Mineral Resources in Wenshan Zhuang and Miao Autonomous Prefecture of Yunnan Province" stipulates that "the prospecting right holder may sell the mineral products recovered in accordance with the approved engineering design and construction during the exploration, but it shall be reported to the land and resources department of the county (city) where it is located for the record. And pay relevant taxes and fees as required." It may also be illegal to sell recycled minerals without the approval of the local land and resources department.
The mineral products recovered from (IV) sales shall not be the mineral products uniformly purchased by the designated units as stipulated by the State Council.
According to the Ministry of Geology and Mineral Resources's reply to the Request for Instructions on Issues Related to the Implementation of the Mineral Resources Law (No. 167), according to the "Regulations on the Administration of the People's Republic of China Gold and Silver" (promulgated by the State Council on June 15, 1983), "Notice of the State Council on Listed Tungsten, Tin, Antimony, and Ionic Rare Earth Minerals as Specific Minerals for National Protective Mining" (Guo Fa [1991] No. 5) and "Natural Crystal Management Measures" (No. 241 issued by the State Economic Commission and Planning Commission on August 12, 1982). The varieties of "mineral products purchased by designated units" include: gold, silver, ionic rare earth and crystal, tungsten, tin, antimony mineral products and their smelting products. The prospecting right owner shall not sell the above-mentioned recovered mineral products.
4. Summary
The prospecting right owner can sell the recovered mineral products during the exploration process, but he should follow the relevant regulations, otherwise he may still be subject to administrative penalties for being deemed to be illegally selling mineral resources.
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