Classification and grading management is a universally adopted management approach both historically and across cultures, particularly in today’s society where the objects of social management are diverse and highly complex. Implementing classification and grading management has thus become an inevitable path for reducing management costs and enhancing management effectiveness. Generally speaking, horizontal classification involves dividing management objects into different categories based on their distinct characteristics and adopting tailored management approaches for each category; vertical grading refers to establishing hierarchical distinctions, clearly defining the management responsibilities of different levels—upper and lower. In recent years, the implementation of classification and grading management for mineral resources—such as the categorized allocation of mining rights—has significantly boosted the level of mineral resource governance. The relevant authorities have further called for improvements in classification and grading management. To this end, we would like to offer the following recommendations.
　　First, the most important classification is the separation of prospecting rights from mining rights, with different regulatory policies applied to exploration and development.
　　Implementing categorized management first requires identifying the key factors that fundamentally distinguish among the objects of management. In the administrative management of mineral resources, the primary categorization is to separate exploration rights from mining rights, adopting different regulatory policies for exploration and development. Although exploration and development are closely linked processes, their respective roles in mineral resources are entirely distinct. Exploration involves discovering and confirming mineral resources—a process akin to addition, an essential step in bringing the utility of mineral resources into being. By contrast, development is a process of subtraction, representing the consumption of mineral resources. Therefore, the government establishes separate management systems for exploration rights and mining rights, respectively, to oversee exploration and development. In general, the policy orientation toward exploration should be characterized by liberalization, encouragement, and protection, thereby accelerating the overall identification of various mineral resources nationwide, enabling a more accurate understanding of resource conditions and resource policies, and facilitating the more scientifically sound formulation of resource plans and the allocation of mining rights. By contrast, development should be subject to certain constraints, aiming at achieving sustainable utilization on a broader scale.
　　In China’s Mineral Resources Law system, prospecting rights and mining rights are established separately. Since the introduction of the umbrella term “mining rights,” many policy orientations have emerged that blur the essential distinctions between prospecting rights and mining rights, as well as between exploration and development—for instance, restricting exploration in an effort to curb development. In some regions, exploration licenses have been suspended for prolonged periods; license validity periods have been unreasonably shortened in defiance of geological principles; and even the rights of prospecting right holders have been arbitrarily infringed upon. For a long time, China’s mineral resource development has been characterized by a passive, wait-and-see approach: as soon as a new deposit is discovered, it is immediately slated for development. Deposits that cannot be developed right away are derided as “dormant mines.” In many mining areas, mining rights have been granted based on insufficient exploration—sometimes even with only preliminary survey data available. Insufficient exploration levels have become one of the major causes of resource waste and safety hazards in mineral development. Due to lax oversight of the exploration requirements for mining rights, the practice of treating exploration as mere prelude to mining and seizing mining rights by first securing prospecting rights has become a prominent issue in recent years. This trend of restricting prospecting rights in order to limit mining rights stems directly from such biases. Interference with and restrictions on prospecting rights are often harmful and unscientific. If we fail to cherish the investment environment for mineral exploration—which has just begun to improve over the past four or five years—and continue to stifle the growth momentum of mineral reserves, we will ultimately jeopardize both the strategic layout of development and the stability of supply and demand for mineral products.
　　Therefore, the following recommendations are proposed: Reaffirm the legal principle stipulated in the Mineral Resources Law that prospecting rights and mining rights should be separately established and managed; strengthen regulatory controls over the intended uses of results obtained at each stage of exploration; and further sever the close legal link between prospecting rights and mining rights. Regarding the previously advocated notion of a natural transition from prospecting rights to mining rights, it now appears that such a transition is no longer feasible. The transition from prospecting rights to mining rights must be subject to national planning and scientifically determined mining right allocations—whether immediate development or reserve for future exploitation. Whether large-scale or small-scale development is pursued, all such activities must conform to the overarching framework of land-use planning. (Of course, the rights and interests of prospecting right holders whose developments are delayed must be genuinely preserved and protected.)
　　II. The classification catalog for the transfer of mining rights needs to be refined.
　　Document No. 12 of 2006 issued by the Ministry of Land and Resources, dated January 20, 2006, “Notice on Further Standardizing the Management of Mineral Rights Transfer,” includes in its annex the “Classification Catalogue of Mineral Exploration and Mining.” This catalogue is divided into three categories: The first category comprises minerals for which exploration rights may be transferred on a first-application basis; the second category comprises minerals for which exploration rights may be transferred through bidding, auction, or listing procedures; and the third category no longer provides for exploration rights but directly transfers mining rights via bidding, auction, or listing procedures. According to Paragraph 4 of the Key Work Points for Land and Resource Management in 2006 (Document No. 1 of 2006 issued by the Ministry of Land and Resources on January 18, 2006), “Starting with classified management, we will deepen the reform of the paid acquisition system for mineral rights, and transfer exploration and mining rights according to their respective levels of exploration risk.” It is evident that the dominant factor underlying the above-mentioned classification is the varying degree of exploration risk. However, since each category adopts an enumerative approach and categorizes minerals by type, it fails to effectively distinguish among different levels of exploration risk.
Iron ore deposits exhibit a variety of industrial types, including sedimentary-metamorphic, magmatic, sedimentary, skarn, and marine volcanic rock types. Copper deposits include porphyry, skarn, marine volcanic rock, basic and ultrabasic rock, and marine volcanic-sedimentary rock types. The exploration difficulty and prospecting risks vary significantly among these different types, and even within the same type, they can differ considerably from one region to another. It is inaccurate to categorize all iron ore deposits as Class II and all copper deposits as Class I, as this fails to reflect the original intent of categorized management. We recommend using deposit industrial types as the primary classification criterion, emphasizing the intrinsic characteristics of each type, and allowing local areas to make adjustments and comparisons based on their specific regional features, using the listed types as guiding benchmarks.
　　Third, categorization is not necessarily better the more detailed it is; the classification of coal versus non-coal brings more drawbacks than benefits.
　　The classification in categorized management must be moderate—not the finer the classification, the better. Take the management of mineral resource assessment as an example: It is necessary to manage mining rights appraisers (or “appraisers”) and reserve appraisers (or “reserve appraisers”) separately, because the former fall under the category of economic and technical evaluations, whereas the latter pertain to the technical oversight and certification of mineral reserve quantities. These two categories differ in nature and follow different principles, thus requiring distinct operational and management approaches. However, further subdividing them into coal and non-coal minerals—and then imposing restrictions and reinforcing the distinction between coal and non-coal—would bring more harm than good. Although coal constitutes a large proportion of solid mineral resources, it is still a type of sedimentary deposit, and its fundamental geological principles and exploration methods are not essentially different from those of other solid minerals. Therefore, there is no need to establish a separate category for coal. In the past, there was a tendency toward separate management of coal, which led to significant discrepancies in reserve classification between coal and other mineral types, resulting in issues such as synonyms with different meanings and homonyms with different connotations. This created major obstacles to the unified formulation and reform of standards for classifying and grading mineral reserves. Another drawback is that coal mining areas have long neglected the comprehensive evaluation and integrated utilization of co-occurring minerals. Furthermore, the meticulous and sophisticated technical management experience accumulated in coal mining cannot be smoothly transferred and applied to other mineral types. It was only after the 1998 government institutional reform, which achieved centralized and unified management of mineral resources, that these problems gradually began to improve. Now, there is again a view advocating separate management of coal and non-coal minerals, and interpretations of technical specifications applicable to coal mines have been issued that differ from those for other mineral types. (From a technical standpoint, I agree with many of the views expressed in these “interpretations”—for instance, the provision of grid density for Category 333 resources, which enhances their credibility and usability. However, if other mineral types continue to adhere to the original general standards without adopting the concept of grid density, this could once again give rise to new instances of homonyms with different meanings.) The recently promulgated “Regulations on the Administration of Geological Exploration Qualifications” issued by the State Council adopts the classification term “coal and other solid minerals,” placing coal at the forefront among solid minerals without establishing a separate category—a move that is entirely appropriate.
　　IV. Tiered Management: It is recommended to implement a categorized authorization management model, provided that the basic framework remains unchanged.
　　Hierarchical management is more complex than horizontal classification management because it involves the division of authority and responsibilities between different levels of government. During field investigations at the grassroots level, we’ve heard frequent calls from lower-level authorities seeking greater autonomy and decentralization of power to their superiors. While higher-level authorities set policies and rules, lower-level authorities are responsible for implementation; the appropriate degree of devolution of power must be tailored to China’s specific national conditions. China is still in the primary stage of socialism and remains a centrally governed country. We cannot simply copy the institutional models of federal countries such as the United States, Australia, or Canada. Moreover, per capita resource endowments in China are relatively scarce, so we must adopt the strictest possible resource protection policies. Given the significant differences across the country in terms of overall strategic awareness and the varying degrees of administrative enforcement capacity at lower levels, it is currently inappropriate to broadly and uniformly delegate powers. The current hierarchical management structure should largely remain unchanged: large-scale and strategically important mineral resource management and licensing authority should continue to be held by the central ministries, while below the provincial level, vertical management should be maintained. To boost the initiative of lower-level authorities and reduce the administrative burden on higher-level authorities, we recommend adopting the approach of administrative delegation—transferring some of the higher-level authorities’ powers to lower-level agencies that demonstrate strong execution capabilities. Under this system, the higher-level authorities retain responsibility and ultimate authority, and through regular supervision and inspection, they can adjust the delegated powers as needed. There is no need to amend laws and regulations when powers are delegated or withdrawn; instead, delegations can be categorized according to the varying levels of execution capability and performance among lower-level agencies, allowing for differentiated treatment.
　　V. Even more important than improving the classification and grading management system is the strict enforcement of the system—ensuring that orders are carried out without any deviation.
　　Mineral resources are owned by the state, yet local protectionism persists, and the management system remains imperfect. Today, it is no longer an isolated case that local authorities fail to implement central unified regulations and instead formulate their own local policies to counteract directives from higher authorities. For example, Document No. 12 (2006) issued by the Ministry stipulated that mining rights transfers should be managed according to a categorized approach: under the first category, exploration rights could be granted on a first-come, first-served basis. However, many localities have arbitrarily switched to a bidding and auction system instead. Another instance is the Ministry’s regulation on the registration procedures for exploration and mining rights, which requires lower-level agencies to “check for duplicates” and provide a written response within one month. Yet some agencies simply drag their feet, and even higher authorities dare not proceed as if the request had been approved by default—resulting in delays that can last for months or even extend into the Lunar New Year period. What’s more, some agencies intentionally or unintentionally leak registration information, causing significant losses to the rights and interests of those registering. Many geological survey units and enterprises have reported that it has become extremely difficult to obtain registration for exploration and mining rights nowadays. It is recommended that, while further refining the categorized and tiered management system, we should also strengthen the rigor of enforcement, ensuring that orders are strictly obeyed and violations are firmly prohibited.