Since 2016, China has steadily and systematically advanced the management of mineral resources by streamlining administration and delegating power, combining deregulation with regulation, and optimizing services. New progress has been made in clearing, delegating, and simplifying mining-related approval procedures. The construction of the mineral rights market has become further standardized, macro-control over key mineral types has continued to be strengthened, and the level of service in mineral rights management has improved. At the same time, various reforms in mineral resource management are being comprehensively and orderly promoted, creating favorable conditions for supply-side structural reform in the mining sector and the transformation and development of the mining industry, and accumulating new momentum for future growth.

“Release, Regulate, and Serve” are being advanced in an orderly manner to support the development of the mining industry.

In 2016, in accordance with the State Council’s overall requirements of streamlining administration and delegating power, combining deregulation with regulation, and optimizing services, the Ministry of Natural Resources continued to deepen its efforts to transform its functions and achieved new progress.

First, another batch of mining-related matters has been streamlined and standardized. In February 2016, the State Council issued a document to streamline and standardize five mining-related matters previously handled by the Ministry of Natural Resources: abolishing the administrative licensing item of “Geological Data Protection Registration” implemented by the Ministry; streamlining and standardizing two intermediary service items—“Verification and Public Notice of Mining Rights Transfers” and “Preparation of Geological Reports for Mineral Resource Exploitation”—implemented by the Ministry; and abolishing two administrative approval items that had been designated by the central government for implementation at the local level: “Approval and Registration for Extension of Geological Data Submission” and “Approval for Exploration, Development, and Construction Activities of Mineral Resources in Areas Outside National Geological Parks and Geological Heritage Nature Reserves.”

Second, the integration of mineral rights transfer into public resource trading platforms has been further advanced. In accordance with the State Council’s requirements for consolidating and establishing a unified public resource trading platform, in August 2016, the Ministry of Natural Resources issued the “Notice on Promoting the Inclusion of State-Owned Land Use Rights and Mineral Rights Transfer into the Unified Public Resource Trading Platform” (Guotu Zifa [2016] No. 104), which clearly defined the procedures for incorporating mineral rights into the public resource trading platform, including requirements for information disclosure, trading rules, and technical standards. The notice also urged local authorities to accelerate the implementation of online trading for mineral rights transfers. This move will further enhance the standardization and transparency of mineral rights transfer transactions.

Third, the approval authority for certain coal and coalbed methane mining rights has been delegated to provincial departments. In March 2016, the Ministry of Natural Resources issued a document stipulating that the approval authority for coal mining rights—after coal enterprises have undergone mergers and restructuring and their resource reserves exceed 100 million tons (with coking coal exceeding 50 million tons)—would be entirely delegated to provincial departments. In April, the Ministry of Natural Resources issued Order No. 65, delegating certain approval authorities for coalbed methane exploration and development to the Shanxi Provincial Department of Natural Resources: First, approval and registration for coalbed methane exploration as well as the renewal, modification, transfer, retention, and cancellation of existing coalbed methane prospecting rights; second, approval and registration for coalbed methane extraction operations with medium-sized or smaller reserves, as well as the renewal, modification, transfer, and cancellation of existing coalbed methane mining rights with medium-sized or smaller reserves; third, approval for pilot coalbed methane production. The delegation of these approval authorities will help reduce coal overcapacity and promote the coordinated and rational development and utilization of coal and coalbed methane resources.

Fourth, the requirements for mining rights approvals have been continuously simplified, leading to improved approval efficiency. In July 2016, the Ministry of Natural Resources issued the "Notice on No Longer Requiring Opinions from Safety Supervision and Administration Authorities as Prerequisites for Issuing Mining Permits" (Guotu Zigu [2016] No. 9) and Announcement No. 18, abolishing the requirement that opinions from safety production supervision authorities be submitted as a prerequisite for issuing mining permits. Since December 2015, the provinces of Fujian, Shanxi, and Hubei have successively merged the documents required for applying for mining permits—namely, the mineral resource development and utilization plan, the land reclamation plan, and the mine geological environmental protection and restoration plan—into a single, unified document. This approach involves unified preparation, unified review, and unified implementation of these plans. The elimination or simplification and consolidation of relevant approval requirements have reduced the number of steps in the mining rights approval process, optimized the approval procedures, lowered enterprise costs, and significantly enhanced the efficiency of mining rights approvals.

Fifth, the fee for reviewing development and utilization plans for mining rights issued by the Ministry will be paid from fiscal funds. To implement the requirements of the “Notice of the General Office of the State Council on Clearing Up and Standardizing Intermediary Services in Administrative Approval Procedures of State Council Departments” (Guobanfa [2015] No. 31), the Ministry issued a notice in June 2016, specifying that starting from 2016, the fees for reviewing mineral resource development and utilization plans for mining rights issued by the Ministry of Natural Resources will be covered by fiscal funds and settled on a per-project basis, with each project subject to a fixed fee and handled through individual委托 agreements. For expenses already paid by the applicant prior to the issuance of this notice, the Ministry will also reimburse the applicants based on their actual expenditures, thereby effectively reducing the financial burden on the applicants.

Sixth, the level of service in mineral rights management has been continuously improving. In recent years, the Ministry of Natural Resources has successively implemented one-stop services for mineral rights applications, allowing applicants to submit application documents and collect results exclusively through the government service hall windows. The ministry has also optimized related services by reducing the content and number of application materials, streamlining approval procedures, introducing online approvals, setting time limits for completion, adjusting the method of submitting provincial department opinions, making approval information publicly available via online inquiry, providing reminders when mineral rights are about to expire, adopting a dedicated official seal for government services, establishing dedicated consultation and complaint hotlines and email addresses, and holding applicant evaluation meetings. As a result, the awareness, capability, and overall quality of mineral rights management services have been significantly enhanced.

Seventh, the pilot program for the reclamation and utilization of historically abandoned industrial and mining sites is progressing smoothly. In August 2015, the Ministry of Natural Resources issued the "Administrative Measures for the Pilot Program on the Reclamation and Utilization of Historically Abandoned Industrial and Mining Sites," which clearly defined the management requirements related to the reclamation and utilization of such sites. These include national financial support for reclamation, attracting social investment, encouraging rights holders to carry out reclamation themselves, and linking the reclamation of abandoned sites to land balance indicators or to newly allocated construction land indicators through various policies and incentives. To date, the pilot program has been launched in more than 200 counties across 24 provinces nationwide, with a total reclaimed area of 422,000 mu and an investment of approximately 8 billion yuan.

Macro-management of mineral resource development continues to be strengthened, boosting the supply-side structural reform in the mining industry.

First, we are strictly controlling the approval process for coal mining rights to support the “reduction of overcapacity” in the coal industry. To further implement the requirements set forth in the State Council’s “Opinions on Resolving Excess Capacity and Achieving Recovery and Development in the Coal Industry,” in March 2016, the Ministry of Natural Resources issued the “Opinions on Supporting the Steel and Coal Industries in Resolving Excess Capacity and Achieving Recovery and Development.” These opinions clearly stipulate that, within three years, the approval of new coal-mining area boundaries will be suspended, and applications for establishing new coal mining rights or expanding production scales without prior project approval (including capacity increases) will not be accepted. For coal mine construction projects already approved (or with capacity increases approved) before Document No. 7 [2016] issued by the State Council, the relevant provincial-level people’s governments must first announce that the projects have completed their tasks of phasing out outdated capacity and resolving excess capacity before processing applications for establishing new mining rights or for changes involving expansion of production scale. These measures provide strong guarantees from the very source of coal resource allocation for achieving the goal of “reducing overcapacity.”

Second, we will strengthen macro-control over strategic minerals such as rare earths and tungsten, thereby promoting the optimization and upgrading of the industrial structure of these advantageous strategic mineral sectors. In November 2015, the Ministry of Natural Resources issued the "Notice on Standardizing the Approval and Management of Prospecting and Mining Rights for Rare Earth and Tungsten Mines." While continuing to suspend the approval of new rare earth prospecting rights, in accordance with the decisions and arrangements of the State Council, we will advance the development of an industry pattern led by the six major rare earth groups, implement differentiated policies, allow full investment from the state treasury for preliminary exploration activities, and permit large rare earth groups to apply for exploration registration when necessary for balancing mining and reserves. Applications meeting the requirements for total output control and capacity balance will be approved for mining registration. The registration of new tungsten mine exploration activities will no longer be suspended, but the acceptance of new tungsten mining registration applications will remain suspended. The extraction of co-associated rare earth and tungsten ores will be brought under total-volume control management, and ion-adsorption-type rare earths will be reclassified as second-category minerals. These policies will help concentrate the rare earth industry around large, state-owned rare earth enterprise groups, optimize the industrial structure, and better protect and rationally develop and utilize rare earth resources.

The mining rights market is gradually returning to rationality.

Looking at the mineral rights market, in the first three quarters of 2016, a total of 876 exploration rights were granted, representing a year-on-year increase of 24.3%. The main minerals involved included gold, geothermal, copper, iron, and lead. The number of exploration rights awarded through competitive bidding and auction mechanisms decreased compared to the same period last year, while the number of rights awarded under fiscal-funded projects increased, accounting for approximately 60% of all exploration rights granted. In the first three quarters of 2016, a total of 1,287 mining rights were granted, down 27.9% year-on-year; among these, about 80% were awarded via competitive bidding and auction. The decline in both exploration and mining rights awarded through market competition reflects the gradual return of the mineral rights market to rationality. From a regional perspective, the western regions—rich in mineral resources—continue to show relatively active exploration and mining activities.

Reform of mineral resource management is being actively promoted.

In accordance with the central government’s requirements for comprehensively deepening reform and other relevant directives, the Ministry of Natural Resources is actively advancing research on major institutional reforms, including the natural resource management system, the national equity fee system for mineral resources, and the system for granting mining rights. It is also steadily piloting reforms in the oil and gas exploration and production system, proactively promoting the delegation of authority for approving mining rights, and simultaneously advancing the establishment of a “2+1” institutional framework for mining rights management. These efforts will adopt a multi-pronged approach, addressing issues such as perfecting the mineral resource management system, streamlining the relationship between resource taxes and fees, strengthening market-based allocation of resources, intensifying the delegation of administrative powers, and refining the approval procedures for exploration and mining activities. By pursuing these reforms at multiple levels and in a comprehensive manner, we aim to better protect and rationally develop and utilize mineral resources, boost the supply-side structural reform of the mining industry, and build new momentum for the transformation, upgrading, and healthy, sustainable development of the mining sector.

To better advance the various reforms in mineral resource management, we need to further intensify our efforts in “delegation, regulation, and service”: In terms of “delegation,” we must place greater emphasis on coordinated integration with related reforms to create synergies. We should conduct thorough analyses of local needs and capacity-building conditions to enhance the substantive value of delegated powers. It is crucial to synchronize delegation with administrative streamlining, guiding localities to further simplify approval requirements, optimize approval processes, and reduce approval costs, thereby achieving the fundamental goal of improving management efficiency. In terms of “regulation,” we need to further enrich and refine the tools and measures for mineral resource management to participate in macroeconomic regulation and support the supply-side structural reform of the mining industry. We should implement rational regulation across all stages—mineral resource planning, exploration and evaluation, establishment, renewal, and cancellation of mining rights—to appropriately guide the “capacity reduction” efforts in coal and steel industries as well as the upgrading of strategic minerals such as rare earths and tungsten. Moreover, we must establish and improve mid- and post-event regulatory mechanisms. In terms of “service,” we need to further enhance the informatization, standardization, and transparency of the granting, approval, and supervision of mining rights. We should strengthen the role of mineral resource development in supporting local economic development, especially in underpinning and ensuring comprehensive poverty alleviation efforts, and continuously elevate the quality of mineral resource management services.

(Affiliation: China Institute of Land and Resources Economics)