Mineral Legal Perspective... Analysis of common legal issues in mining rights mortgage.
Published:
2024-09-30
As a kind of property right, mining right has the characteristics of beneficial property right in legal nature, and can be used as mortgage guarantee according to law. In practice, mining rights as collateral can certainly be used as an effective way of financing for mining enterprises, and mining enterprises can use their legally owned mining rights as collateral to apply for loans from banks or other financial institutions to obtain funds to support their production and operational activities. The author will combine the provisions of relevant laws and regulations and normative documents to analyze and summarize the legal issues related to the mortgage of mining rights.
As a kind of property right, mining right has the characteristics of beneficial property right in legal nature, and can be used as mortgage guarantee according to law. In practice, mining rights as collateral can certainly be used as an effective way of financing for mining enterprises, and mining enterprises can use their legally owned mining rights as collateral to apply for loans from banks or other financial institutions to obtain funds to support their production and operational activities. The author will combine the provisions of relevant laws and regulations and normative documents to analyze and summarize the legal issues related to the mortgage of mining rights.
The time of establishment of the mortgage of 1. mining rights.
According to Article 214 of the Civil Code, the establishment, alteration, transfer and extinction of real property rights, which should be registered in accordance with the provisions of the law, shall take effect from the time they are recorded in the real property register. Article 15 of the "Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Mining Rights Dispute Cases" stipulates: Article 15 If the parties request to confirm the mortgage of mining rights is established at the time of registration according to law, the people's court shall support it. The registration procedures for the mortgage of mining rights handled by the competent department of land and resources that issued the mineral resources exploration license or mining license in accordance with the relevant provisions shall be regarded as the registration specified in the preceding paragraph.
Accordingly, mineral resources as land attachments, mining rights mortgage should follow the principle of registration effectiveness, mortgage rights should be established from the time of registration. However, the registration of the mortgage of the mining right handled by the competent department of land and resources in accordance with the relevant provisions can be regarded as the registration of the mortgage of the mining right. Therefore, after the creditor signs the mortgage contract with the mortgagor, it should promptly go through the mortgage registration or mortgage filing procedures, otherwise the mortgage has not yet been established and the creditor cannot exercise the mortgage in accordance with the law. At the same time, when filing the mortgage of mining rights, it should be carried out in strict accordance with the procedures prescribed by the local natural resources management department to ensure the validity of the filing, otherwise it may lead to the mortgage filing being found invalid, which in turn leads to the failure to establish the mortgage.
The effect of the mortgage filing period of 2. mining rights on the mortgage right.
The mortgage filing documents issued by the mining administration often indicate that the mortgage filing registration has a valid period, and if no application is made for cancellation after the expiration of the period, the filing registration matters shall be automatically canceled. In practice, after the expiration of the validity period, the mining right may be seized or the mining enterprise refuses to cooperate with the reasons, resulting in the failure to re-apply for the record registration, then whether the mortgage record registration expires, the mining right mortgage will be lost?
Article 12, paragraph 1, of the original Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the the People's Republic of China Security Law (Law Interpretation No. 2000) stipulates that "the duration of the security agreed upon by the parties or requested by the registration department shall not be legally binding on the survival of the security interest." However, this provision expired when the Civil Code came into effect on January 1, 2021, resulting in no clear provision as a basis for the validity of the mortgage after the expiration of the registered mortgage term. According to the Letter of the Research Office of the Supreme People's Court on the question that the mortgage right is not affected by the mortgage term stipulated by the mortgage registration authority, the mortgage right exists at the same time as the claim it guarantees, and the mortgage term stipulated by the department handling the mortgage registration does not affect the validity of the mortgage right.
According to the approval, combined with the relevant judicial practice, the author believes that the mortgage right of mining right is subordinate to the main creditor's right guaranteed by it, and the mortgage period registered by the mortgage record has no legal effect on the existence of the mortgage right. Therefore, if the mortgage registration period expires but the mining right is still within the validity period, the mortgagee still enjoys the mortgage right.
If the 3. mining warrant is lost, whether the mortgage is valid.
According to the relevant provisions, the mining right that has been obtained will be lost due to the expiration of the license period, the failure of the mining right holder to renew or the competent department, and the revocation or cancellation of the license due to the violation of laws and regulations by the mining right holder. What is the effect of the mortgage on the mining right?
Mortgage has a subordinate property, the mortgage is based on the mortgage, the mortgage is lost, the mortgage is eliminated. Therefore, if the mining right is lost due to the expiration of the mining license without the renewal registration procedure, the mortgage established on the mining right is also eliminated and the creditor no longer enjoys the mortgage. Therefore, when accepting a mortgage on a mining right, the mortgagee should take prior measures to avoid the above-mentioned circumstances that lead to the loss of the mining right, such as limiting the term of the principal debt to the period of validity of the license, and prior monitoring of the possible violations of the mining right holder.
The impact of 4. mining rights mortgage filing on the transfer of mining rights.
Article 106 of the Civil Code stipulates that during the mortgage period, the mortgagor may transfer the mortgaged property. If the parties agree otherwise, they shall follow their agreement. If the mortgaged property is transferred, the mortgage shall not be affected. If the mortgagor transfers the mortgaged property, he shall promptly notify the mortgagee.
The "Notice of the Ministry of Natural Resources on Further Improving the Registration and Management of Mineral Resources Exploration and Mining" (Natural Resources Regulations [2023] No. 4) stipulates that "in any of the following circumstances, the registration of the transfer and change of mining rights shall not be handled:(3) The mining rights are in a mortgage filing status and have not been approved by the mortgagee."
After the implementation of the Civil Code, property that creates a mortgage may, in general, be transferred after notifying the mortgagee without the consent of the mortgagee. However, according to the natural capital regulations [2023] No. 4 document, during the filing period of the mining right mortgage, the registration of the transfer of mining rights cannot be carried out without the consent of the mortgagee. Some local documents, such as the "Online Public Information on the Mortgage of Mining Rights of Yicheng County Jinquan Mining Co., Ltd." published by the Shanxi Provincial Department of Natural Resources, also clearly state that "within the mortgage period, if the mortgage of the mining right is not released or without the consent of both parties to the mortgage, our department will not handle the transfer of the mining right." Therefore, after the repayment of the main claim is completed, the procedures for the release of the mortgage of the mining right should be handled in a timely manner to avoid affecting the transfer of the mining right.
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