Finance Departments (Bureaus) and Departments in charge of geology and mineral resources of all provinces, autonomous regions, and municipalities directly under the central government:

To safeguard the state’s ownership of mineral resources and strengthen the management of fees and payments for exploration rights, mining rights, and usage rights, in accordance with the relevant provisions of the Mineral Resources Law of the People’s Republic of China, as well as the Measures for the Registration and Management of Mineral Exploration Blocks, the Measures for the Registration and Management of Mineral Exploitation, and the Measures for the Transfer of Exploration and Mining Rights, we have formulated the “Measures for the Management of Fees and Payments for Exploration and Mining Rights.” These measures are now being distributed to you; please ensure compliance and implementation.

Attachment: Management Measures for Fees and Payments for Exploration Rights and Mining Rights

Ministry of Finance of the People's Republic of China

Ministry of Natural Resources of the People's Republic of China

June 1, 1999

Administrative Measures for the Fees and Payments for Exploration Rights and Mining Rights

Article 1: In order to safeguard the state’s ownership of mineral resources and strengthen the management of fees and payments for exploration rights and mining rights, in accordance with the relevant provisions of the Mineral Resources Law of the People’s Republic of China, as well as the Administrative Measures for the Registration of Mineral Exploration Blocks, the Administrative Measures for the Registration of Mineral Exploitation, and the Administrative Measures for the Transfer of Exploration Rights and Mining Rights, we have formulated the relevant provisions of the “Administrative Measures for the Fees and Payments for Exploration Rights and Mining Rights,” and hereby promulgate these Measures.

Article 2: Any exploration or mining of mineral resources within the territory and jurisdictional waters of the People’s Republic of China shall be subject to the payment of fees and consideration for prospecting rights and mining rights as prescribed.

Article 3: The fees for exploration rights and mining rights include:

(1) Exploration Right Usage Fee. This is the fee collected by the state from the exploration right holder in accordance with regulations, for the transfer of mineral resource exploration rights to the exploration right holder.

(2) Mining rights usage fee. This is the fee collected by the state from the mining right holder in accordance with regulations, for the transfer of mining rights to the mining right holder for mineral resources.

Article 4: The consideration for prospecting rights and mining rights includes:

(1) Exploration Right Fee. This is the fee collected from the exploration right holder, as prescribed, for the transfer of exploration rights—formed through the state’s capital investment in exploration—to the exploration right holder.

(2) Mining rights payment. This is the fee collected from the mining rights holder, as prescribed, for the transfer of mining rights—formed through the state’s capital investment in exploration—to the mining rights holder.

Article 5: Standards for the Collection of Fees for Exploration Rights and Mining Rights

(1) The exploration right usage fee is calculated on an annual basis according to the exploration year and paid annually per block area. For the first through third exploration years, the fee is RMB 100 per square kilometer per year; starting from the fourth exploration year, the fee increases by RMB 100 per square kilometer per year, with a maximum cap of RMB 500 per square kilometer per year.

(2) The mining rights usage fee shall be paid annually based on the area of the mining district, at a rate of 1,000 yuan per square kilometer per year.

Article 6: Standards for the Collection of Fees for Prospecting Rights and Mining Rights

The payment for exploration rights and mining rights shall be based on the appraised value confirmed by the competent department of geology and mineral resources under the State Council, and shall be paid either in one lump sum or in installments. However, the payment deadline for exploration rights shall not exceed two years at most, and the payment deadline for mining rights shall not exceed six years at most.

Article 7: The fees and payments for exploration rights and mining rights shall be collected by the authority responsible for the registration and management of such rights. The fees and payments for exploration rights and mining rights shall be paid by the holders of these rights when applying for exploration or mining registration, or during annual inspections.

When applying for exploration and mining registration or annual inspections, the holders of exploration and mining rights shall directly remit the fees and payments for the use of such rights to the “Fiscal Special Account for Exploration and Mining Rights Fees and Payments” opened by the fiscal authorities at the same level, according to the standards set by the registration and management authority. The holders of exploration and mining rights may then, presenting the bank’s receipt of payment, go to the registration and management authority to complete the registration procedures and obtain the “Special Receipt for Exploration and Mining Rights Fees and Payments” as well as the exploration and mining licenses.

The “Special Receipt for Fees and Payments for Exploration Rights and Mining Rights” is uniformly printed by the financial authorities.

Article 8: For prospecting rights and mining rights that fall within the scope of registration and administration by the geological and mineral resources authority under the State Council, the usage fees and consideration payments shall be collected by the registration authority under the geological and mineral resources authority of the State Council and remitted into the “Special Fiscal Account for Usage Fees and Consideration Payments for Prospecting Rights and Mining Rights” opened by the Ministry of Finance. For prospecting rights and mining rights that fall within the scope of registration and administration by the provincial-level geological and mineral resources authority, the usage fees and consideration payments shall be collected by the registration and administration authority under the provincial-level geological and mineral resources authority and remitted into the “Special Fiscal Account for Usage Fees and Consideration Payments for Prospecting Rights and Mining Rights” opened by the provincial-level financial department.

Article 9: The revenues from exploration rights fees and mining rights fees and payments shall be earmarked exclusively for expenditures related to the exploration, protection, and management of mineral resources. The plans for the use of these funds shall be proposed by the geological and mineral resources authorities under the State Council and the provincial-level geological and mineral resources authorities, submitted to the financial authorities at the same level for approval, and then disbursed for use.

Article 10: The fees for exploration rights and mining rights may cover administrative and operational expenses incurred in the approval and registration of such rights.

The following costs and expenses may be covered by the consideration paid for exploration rights and mining rights: fees for the valuation and confirmation of the transfer of exploration and mining rights, announcement fees, consulting fees, commissions to intermediary agencies, site rental fees, and other necessary costs and expenses.

Article 11: When state-owned enterprises transfer exploration rights and mining rights actually held by them that were formed through exploration activities funded by the state, the payment for such exploration and mining rights—subject to approval by the geological and mineral resources authority under the State Council in conjunction with the Ministry of Finance—may be wholly or partially converted into the enterprise’s state-owned capital.

When state-owned geological exploration units transfer the prospecting rights and mining rights they actually hold—rights that were formed through exploration activities funded by the state—the proceeds from the transfer of these rights shall be handled in accordance with relevant regulations.

Article 12: If the fee and price for the use of prospecting rights and mining rights are not paid in a timely manner as required, the authority responsible for the registration and management of such rights shall order the holder to make the payment within 30 days and impose a late-payment penalty of 2‰ per day starting from the date of delinquency. If the payment is still not made after the deadline, the authority responsible for the registration and management of prospecting and mining rights shall revoke the exploration license or mining license.

Article 13: The financial authorities and the competent departments for geology and mineral resources shall earnestly strengthen financial management and supervision of the revenues from fees and payments for exploration rights and mining rights, and conduct regular inspections of the status of such revenues.

Article 14: These Measures shall be interpreted by the Ministry of Finance and the Ministry of Natural Resources.

Article 15: These Measures shall take effect as of the date of their promulgation. Fees and payments for exploration rights and mining rights already collected prior to the promulgation of these Measures shall be handled in accordance with the provisions of these Measures.

Source: Zhejiang Mining Network