First, regarding policies on opening up the mining sector to foreign investment, each country follows its own unique path, with some adopting more relaxed measures and others taking stricter ones.
　　Since the late 1980s and early 1990s, due to a sluggish mining industry and the fact that many developing countries were undergoing economic transitions, these countries became highly eager to attract investment in the mining sector. As a result, many nations gradually liberalized their policies toward foreign investment in mining, adopting various measures such as lifting restrictions on shareholding and offering tax incentives to draw in international mining investments. However, since international mineral prices entered an upward cycle in 2002, some countries began to realize that the investment incentives offered during the mining industry’s downturn had been excessively generous, causing governments to lose substantial revenue. Consequently, these countries started to readjust their foreign investment policies and imposed certain restrictions on foreign capital. On the contrary, countries that had previously been relatively cautious about foreign investment in mining have recently relaxed their policies toward foreign investment in the mining sector, driven by considerations such as access to capital and advanced technology.
　　Among foreign-invested projects, Venezuela has shown the most significant shift in attitude. Driven perhaps by political considerations, the country appears to be deliberately disregarding international mining norms. Venezuelan President Chávez once stated that the mining contracts previously signed by the state with certain foreign companies offered excessively favorable terms to those foreign firms, thereby harming national interests. In 2005, the Venezuelan government launched a series of measures aimed at restricting foreign investment in the mining sector. At the beginning of the year, Balmor Vásquez, Deputy Minister of Basic Industries and Mining, pointed out that 70% of mining agreements signed between foreign mining companies and local private firms had failed to function properly, leaving the country’s mining production virtually paralyzed. He warned that if this situation persisted, Venezuela would terminate these agreements altogether. At the same time, the Venezuelan government announced publicly that all foreign-invested projects within the country would undergo rigorous review before any final decisions were made—ensuring that the nation’s mineral resources would serve its own economic interests. To further consolidate its control over mining resources, the Venezuelan government established a state-owned mining company, which began operations in January 2006. The company primarily took over underperforming mining concessions, thereby strengthening the state’s oversight and management of mining resources. Additionally, Venezuela announced that it would no longer issue tenders for gold mining to foreign or private companies. In September 2005, the Venezuelan president stated that, in order to further restructure the mining industry and regain control over gold and diamonds, the government would cease issuing new mining concessions to private companies and decided henceforth not to grant mining rights to multinational mining corporations. In the oil sector, over the past year and more, the Venezuelan government has repeatedly revised the country’s petroleum regulations. First, the government raised both the income tax rate and the royalty rates; second, it altered the participation model for foreign oil companies. For foreign enterprises, the primary risk posed by these policy changes is that, should they transition from being fully independent service providers to becoming minority shareholders in joint ventures, the operational decision-making power of these joint ventures would fall entirely into the hands of the Venezuelan government.
　　Currently, the mining companies engaged in mining activities in Venezuela are mainly from Canada, the United States, and China. Canada’s Corestone Resources had originally planned to develop gold mines in the Las Cristinas mining district—the largest gold deposit globally that remains undeveloped and widely recognized as such—but is now awaiting environmental permits. The Venezuelan president announced that a state-owned mining company will be established to invest in and develop this region. In response to the Venezuelan government’s significant increase in royalty fees for certain mining projects, the world’s largest oil company, ExxonMobil, formally notified Venezuelan authorities of its dissatisfaction and indicated that it reserves the right to submit the dispute to international arbitration.
　　Russia’s stance on foreign investment in the mining sector remains unclear. In October 2004, Russia revised its Subsoil Resources Law, clarifying its policy on attracting foreign investment and allowing foreign investors to directly invest in resource exploration and development—including gold mining. Depending on the actual amount of investment made by foreign enterprises, they can legally obtain absolute controlling stakes. Restrictions on gold ore grades and reserves in foreign cooperation have also been largely lifted, particularly with no restrictions whatsoever on investments in exploration and mining activities. The limitation on the duration of cooperative agreements has been removed; the term of such agreements will now be determined based on the size of resource reserves and the capacity for extraction and processing. However, this revised law has not yet been finalized. At the beginning of 2005, the Russian Deputy Minister of Natural Resources indicated that the government might ban foreign companies from participating in the development of mines rich in reserves. Russia could also raise the threshold for foreign mining companies entering the Russian mining sector, thereby restricting foreign investment. Subsequently, the Russian government published an initial list of strategic minerals prohibited from foreign capital involvement, including oil, gold, and copper. With a few large-scale producing regions being the exception, foreign companies are permitted to invest in and participate in resource development projects at other sites. According to the Russian Minister of Natural Resources, Russia will not allow foreign companies to bid for the rights to develop strategically important oil and gas fields, gold mines, and copper mines. Only companies in which Russian enterprises hold a stake of at least 51% will be eligible to participate in such bidding processes. Earlier, when deciding when to sell the Sukhoi Log gold mine, the Russian government had failed to reach a consensus on whether foreign investors should be allowed to participate in the development of Russian gold mines, thus stalling the planned auction of the mine. Previously, gold mining companies from Canada, the United Kingdom, and Russia had all expressed interest in participating in the development of the Sukhoi Log gold mine. The Sukhoi Log gold mine holds reserves accounting for one-third of Russia’s total gold reserves, and the estimated funding required for its development exceeds 1 billion U.S. dollars.
　　In fact, over the past seven years, Russia has not authorized the auction of any major natural resource deposits. In the oil and gas sector, Russia has strengthened state capital control. Over the past year, the government has doubled the strength of the state-owned Russian Oil Company, and its stake in Gazprom—the country’s leading natural gas company—has risen to 51%, giving it effective controlling interest. Going forward, Gazprom will continue to tighten its grip on major natural gas fields.
　　Since taking office, India’s new government has accelerated its efforts to attract foreign investment. However, growing domestic demand for mineral resources has prompted the government to tighten its foreign-investment policies in the mining sector. Drawing on China’s experience, India has established 11 special economic zones and plans to set up an additional 35 such zones. On May 12, the upper house of the Indian Parliament followed the lower house in passing a bill aimed at promoting the establishment of special economic zones through tax breaks and other incentives. The bill allows developers and tenants of these zones to enjoy tax exemptions for up to 15 years and reduces certain administrative hurdles. India has proven iron-ore reserves totaling 13 billion tons, making it the world’s second-largest supplier of iron ore after Australia. The country’s vast, untapped iron-ore resources have drawn the attention of steelmakers and mining giants from around the globe. Yet, factors such as rising domestic demand and India’s robust economic growth are now driving the government to adopt a more restrictive approach toward foreign investment in the development of domestic resources. South Korea’s POSCO and BHP Billiton, the world’s largest mining company, have proposed to the government of India’s Odisha state an investment of $10 billion to develop the state’s iron-ore deposits. If successful, this would become the largest-ever foreign investment in India’s history. However, after months of negotiations, the project remains highly uncertain. The crux of the issue lies in India’s surging domestic steel production and escalating demand for iron ore. Several domestic steelmakers are keen to curb iron-ore exports in order to secure ample supplies of inexpensive iron ore for their own operations. This sentiment is shared by governments at various levels across India. While the Odisha state government supports attracting foreign investment, it also wishes to ensure that the iron ore produced in the state be used primarily by local steelmakers. According to the original plans of POSCO and BHP Billiton, the two companies intend to mine 10 billion tons of iron ore over the next 25 years, with roughly 60% of the ore destined for a new steel plant being built by POSCO in Odisha and the remaining 40% earmarked for export.
　　The Iranian government has repeatedly expressed its eagerness to attract foreign investment in the mining sector, primarily in an effort to reduce its excessive reliance on oil revenues. Iran is one of the world’s richest countries in terms of mineral reserves, with more than 50 gold mines, 25 of which have been officially confirmed to contain proven reserves totaling 200 tons of gold. Prospects for Iran’s gold exploration projects are promising, and foreign companies have shown strong interest in developing gold mines in Iran. Many major international gold mining companies are currently conducting feasibility studies in Iran. According to Iran’s current legal framework, foreign companies are not permitted to engage in gold mining operations independently in Iran. If a foreign company wishes to carry out gold mining activities in Iran, it must enter into a joint venture with an Iranian partner. Foreign companies can hold up to 90% of the equity in such mining ventures, and there are no restrictions on their share of the profits. Under Iranian regulations, foreign companies participating in joint ventures for gold mining in Iran can operate for a period of up to 25 years, and this term can be further extended.
　　In late 2005, Iran’s Development and Renovation Organization announced that Iran would reform its investment policies for the mining sector, emphasizing the need to significantly boost investment in mining so that its scale would match that of the oil and gas industry. Ahmad, the chairman of the organization, stated that the Ahmadinejad administration would strongly support both domestic and foreign investments. The country hopes to use the development of the mining sector to reduce its excessive reliance on oil revenues. Ahmad noted that mineral exploration has been designated as a top priority in the sector’s development plan, adding that small coal mines would also be transferred to private companies. At the subsequent 20th World Mining Congress, Iranian Vice President Pazhva Davoudi also expressed Iran’s openness to foreign investment in its mining sector and indicated that the government had established a guarantee fund aimed at minimizing risks associated with mining investments. Meanwhile, the Iranian government is planning to set up special economic zones and provide technical assistance to non-governmental organizations involved in the mining sector. Currently, several mines in Iran remain unexploited due to a lack of funding. As a result, Iran has suspended the granting of exploration rights related to mining to the private sector and is discouraging foreign investors from participating in large-scale mining exploration projects.
　　After encouraging and then restricting foreign investment in the mining sector, Indonesia is now in an encouragement phase, aiming to address its economic challenges. Prior to the Asian financial crisis of 1997–1998, Indonesia had been actively promoting the development of the mining industry, and many multinational mining companies operated in the country at that time. However, following the fall of former President Suharto’s regime in 1998, mining exploration and investment suffered a severe blow due to persistent political instability, ongoing disputes over labor and land access, as well as factors such as illegal mining and harassment of foreign companies. Since 2003, Indonesia has not built any new large-scale mines. Among the world’s 30 largest publicly listed mining companies, only five have projects in Indonesia, and exploration investments are extremely low.
　　After the new government took office, it introduced a series of measures aimed at attracting foreign investment. First, in January, Susilo announced a package of investment-stimulating measures that included improving tax policies, eradicating corruption, and comprehensively reforming the legal system. In the oil sector, Indonesia’s daily oil production reached as high as 1.6 million barrels per day in 1991. However, due to factors such as the depletion of mature oil fields, insufficient investment, bureaucratic inefficiencies, separatist unrest, and widespread corruption, oil production has long been on the decline. Today, daily output has fallen to around 950,000 barrels, causing Indonesia to shift from being a net oil exporter to a net oil importer. Against this backdrop, rather than imposing or preparing to impose restrictions on oil extraction—as most oil-producing governments have done—Indonesia announced on April 26th the introduction of new preferential policies for eight domestic oil companies. Among those benefiting are six oil fields operated by China National Offshore Oil Corporation.
　　In 2005, North Korea opened its resource sector to foreign investment for the first time. North Korea boasts abundant coal resources, many of which are surface deposits. However, due to a lack of funding and technology, numerous mining areas have been shut down, and the current operating rate stands at only 30%. In October, China Minmetals Corporation signed an agreement with the North Korean Ministry of Trade on establishing a joint venture in the country’s coal sector. This agreement to set up a joint venture in the coal industry with China Minmetals Corporation marks not only North Korea’s first joint venture established outside its special economic zones but also the country’s initial opening-up move in the resources sector. The specific details—including the equity ratio and investment methods—were resolved through Sino-North Korean consultations.
Nigeria’s legislative body is currently discussing provisions regarding the exploitation of offshore oil fields by foreign oil companies. Compared to previous provisions, the share of revenues going to foreign oil companies will be significantly reduced.
　　Starting in 2004, China Minmetals acquired Canada’s Noranda Inc., making a takeover offer at a price of 6 billion Canadian dollars. This move sparked strong reactions in Canada. Under Canada’s Foreign Investment Act, the Canadian Department of Industry will determine whether to approve foreign investors’ applications based on whether such investments are beneficial to Canada. Originally, according to the Foreign Investment Act, foreign investment acquisition applications exceeding 237 million Canadian dollars were required to obtain approval from the Canadian government. However, Canada’s Minister of Industry, Ed Fast, indicated that new regulations might be introduced in 2005, under which even smaller transactions with strategic significance would also be subject to government review. Due to unresolved deal terms and other factors, the acquisition ultimately failed to go through.
　　II. Many countries are undertaking reforms of their mining laws, and the issue of sustainable development has been given a prominent position.
　　Mining laws in any country are never static; they are constantly being revised and improved. In the early 1990s, many countries launched a wave of mining law reforms, and in recent years, an increasing number of countries have been preparing to revise their mining laws. As of 2005, mining laws in numerous countries were still undergoing reform and amendment. The main focus of these revisions has been on emphasizing environmental, economic, and social sustainability.
　　Amendments to the U.S. General Mining Law of 1872 dragged on for years without yielding any results. Mineral resource legislation in the United States operates at both the federal and state levels. To meet the needs of socio-economic development at different historical stages, the U.S. Congress has successively enacted numerous regulations governing mineral exploration and development, among which the 1872 General Mining Law stands out as particularly significant. Obtaining mining rights on federal lands has primarily relied on the 1872 General Mining Law. At the time of its enactment, the law coincided with the massive westward expansion of the United States; federal policies encouraged the sale of public lands to facilitate the extraction of minerals such as gold, silver, tin, copper, uranium, construction stones, and diamonds. The law stipulated that as long as mineral resources were discovered, anyone could freely stake claims and establish boundaries on public lands and thereby acquire mining rights. Fifty years later, in 1920, the U.S. Mineral Leasing Act separated from the General Mining Law a group of high-value, large-scale, and highly competitive resources—including oil, gas, coal, oil shale, phosphate, sulfur, asphalt, potash, and sodium—placing them under a leasing system administered by the federal government. Under this new system, miners not only had to pay mineral lease fees but also royalty payments. In 1947, the Building Materials Mining Act further separated construction materials such as sand, gravel, stone, and clay from the General Mining Law, prescribing that mining rights for these resources be granted through a bidding process involving fixed-price sales. Currently, minerals such as gold, copper, and silver found on public lands remain subject to the constraints of the 1872 General Mining Law.
　　As early as 1989, signs began to emerge of an intention to amend the U.S. Mining Law of 1872. At that time, the U.S. General Accounting Office reported that, under the 1872 Mining Law, the cost of acquiring mining land was only $2.50 to $5.00 per hectare—far below market prices. This land-grant system had been misused by some individuals for purely speculative land profits. The GAO report recommended imposing additional royalties on hard-rock mines and setting stringent reclamation standards. During the 103rd Congress, the House of Representatives passed a resolution calling for a comprehensive reform of the 1872 Mining Law. In 1993, the House and Senate adopted different versions of the proposed General Mining Law reform, which were highly contentious. After lengthy negotiations, the two chambers still failed to reach a consensus on the key points of disagreement. The main areas of contention centered on the relationship between the federal and state governments, water quality issues, and the economic impacts of mining activities. Since then, various sectors in the United States have continued to debate the need to revise the 1872 Mining Law. The central debates have focused on ending the land-grant system, establishing new environmental standards, increasing royalty payments, and creating a plan for reclaiming abandoned mines. Before 1994, mining companies did not have to pay any fees to the federal government for extracting and selling mineral products. In 1994, the Congress, with bipartisan support, put an end to this practice. Previously, the cost for mining rights holders to acquire federal land had been less than $5.00 per hectare. However, after a Canadian mining company purchased federal land worth $10 billion for just $10,000 in 1994, starting from fiscal year 1995, the U.S. Congress adopted a one-year deferred-payment system for granting mining concessions.
　　In early 2005, Nick Rahall, a senior member of the House Resources Committee, introduced H.R. 3968—the Federal Mineral Development and Land Conservation Fairness Act of 2005—aimed at reforming the 1872 Mining Law. Congressman Rahall’s proposal calls for permanently ending the leasing system and prohibiting the free transfer of federal lands. The legislation also requires that moderate royalties be paid when minerals are extracted from federal lands in the western United States, while establishing a program for the cleanup of abandoned mines. The act mandates the designation of areas unsuitable for mining activities and sets forth operational and reclamation requirements to ensure environmental protection.
　　Venezuela is also planning to revise its mining law. According to Mr. Victor Álvarez, Venezuela’s Minister of Basic Industries and Mining and President of the Venezuelan Guayana Corporation (CVG), the revised law should take into account the development of the mining sector under the principles of economic, social, and environmental sustainability, while also promoting new investments guided by principles that differ from those currently in place. According to a report by Venezuela’s El Universal newspaper, Pedro Jiménez Flores, Chairman of the Mining Committee of the Venezuelan National Assembly, stated that the amended mining law will be adopted in June 2005.
　　The Honduran government has submitted a proposal for mining reform to Congress. In September 2004, Honduras established the Association for Mining Law Reform to prepare the reform proposal. According to reports from the Honduran government, this reform will clarify the procedures for the production of mineral resources such as silver, lead, and zinc. Previously, Honduras’s mining law, amended in 1982, offered incentives to newly established mining companies, including a five-year period of reduced tax rates and royalty payments. It also capped the total tax burden on both existing and newly established mining companies at no more than 55%.
　　In 2005, Gambia enacted a newly revised “Mining and Quarrying Act” that incorporates provisions on environmental protection, compensation for landowners, and stringent penalties for violators. The Kenyan government has allocated 3 million Kenyan shillings (equivalent to US$62,500) to re-examine the country’s previous mining legislation. This review is expected to be completed by 2006.
　　The Moroccan government will enact a new mining law and introduce a series of preferential policies to encourage private and foreign investment. To ensure the sustainable development of the mining sector and meet the needs of the national economy, Morocco’s Ministry of Energy and Mines has formulated a mining development strategy for the period from 2004 to 2007. Under this strategy, a new mining law is planned, along with a package of preferential policies aimed at attracting private and foreign investment. At the same time, authority will be decentralized to support local and regional development. Going forward, the policy and direction for mining development will focus on expanding production capacity and enhancing the value of mineral products. In terms of mining legislation, the scope of the new mining law will be extended to include minerals and ornamental stones that hold industrial exploitation potential. A large-scale exploration regime covering areas from 100 to 600 square kilometers will be introduced, allowing mining companies to conduct small-scale explorations near existing mining sites. Furthermore, value-added tax and customs duties on prospecting activities will be waived. Currently, foreign companies conducting geological surveys in Morocco are mainly from Spain, France, Germany, and Japan. While attracting foreign investment, Morocco is also encouraging its own mining groups to participate in mining projects in other African countries, such as Guinea, Burkina Faso, and Mali. Industry insiders predict that the new mining law will greatly boost the enthusiasm of the mining sector and accelerate the privatization process in the mining industry. Meanwhile, training for mining personnel and the restructuring of regulatory authorities will receive strong support from relevant funds.
　　On July 7, 2005, the Moroccan government issued the final mining regulations, stipulating that mining companies intending to carry out exploration or mining activities on lands within the national forest system must submit either a letter of intent or an operational plan. If forest rangers in the area determine that such activities could significantly disturb ground resources—regardless of whether earth-moving equipment is used or trees are cut down—the final regulations clarify and strengthen the Forest Service’s longstanding position. Previously, a federal district court had ruled, based on earlier legislation, that mining activities on lands within the federal forest system did not require prior notification to or permission from the Forest Service—as long as the proposed activities did not involve the use of mechanized earth-moving equipment nor entail tree removal.
　　India is also revisiting the 21 regulations and rules governing mining activities, with the goal of making them more investor-friendly. The government has decided to establish a committee to oversee this process. A six-month period has been allocated for developing relevant recommendations. Key areas of focus include streamlining procedures to attract more private investment and reviewing tax-related issues.
　　New South Wales in Australia is amending its 1992 Mining Act. The provisions concerning the environment primarily focus on the issue of ecologically sustainable mining development.
　　Another country currently considering reforms to its mineral laws is Mongolia, which hopes that by tightening regulations on mining investments, it can create more room for domestic enterprises. Mongolia’s current Mineral Law was first implemented in 1997 and revised in 2001. Under the existing law, mining investments—especially those from foreign investors—are granted numerous incentives, such as tax exemptions for the first five years of a project and reduced tax rates—halved—for the subsequent five years. On May 27, Mongolian parliamentary representatives submitted a proposed amendment to the Mineral Law to the Speaker of the Mongolian Parliament, hoping that the amendment will be adopted and provide greater investment opportunities for local mining companies. The proposal suggests amending the current Mineral Law in several key areas. First, it calls for increasing the royalty rate on mineral rights from the current 2.5% to 15%. Second, it proposes doubling the licensing fee for mining rights. Additionally, the proposal seeks to shorten the duration of exploration licenses from the current three-year term to two years, with any extensions subject to individual circumstances. It also recommends imposing export tariffs on mined products. Furthermore, the proposal advocates reducing the preferential treatment currently afforded to mining activities.