In the current situation—where electricity demand continues to grow rapidly and most provinces and cities across the country are facing a supply-demand imbalance—disputes between coal and power companies over coal prices for power generation have become increasingly prominent. To resolve this long-standing conflict, an increasing number of power and coal enterprises are turning their attention to “integrated coal-power operations.”
The so-called “coal-power integrated operation” refers to the integration of coal and power industries through mutual shareholding, equity participation, or controlling interests between coal and power enterprises. By leveraging the fusion, merger, and restructuring of different types of capital, this approach enables mixed-ownership management, thereby stabilizing coal prices and their sales channels. On the one hand, it addresses the issue of coal enterprises merely providing raw materials, thus extending the industrial chain of coal enterprises. On the other hand, it ensures stable coal prices and supply for power enterprises, reducing risks in the supply chain. However, the process of coal-power integration necessarily involves the handling of mining rights issues; obtaining mining rights is indispensable for any coal-power integrated operation project. This article focuses solely on the legal and practical aspects of dealing with mining rights within coal-power integrated operation projects.
　　I. Legal Basis and Disposal Procedures for the Transfer of Mining Rights
　　(1) Relevant laws, regulations, and normative documents pertaining to the transfer of mining rights
　　1. The Mineral Resources Law of the People’s Republic of China;
　　2. The “Administrative Measures for the Transfer of Prospecting Rights and Mining Rights,” No. 242, issued by the State Council on February 12, 1998;
　　3. Notice No. [1998]104 issued on August 24, 1998 by the Ministry of Land and Resources and the State Administration for Industry and Commerce, titled “On Issues Concerning the Registration of Mining Rights and Enterprise Business Registration for Mining Enterprises”;
　　4. The “Provisions on Issues Concerning the Approval of Transfer of Prospecting Rights and Mining Rights” issued by the Ministry of Natural Resources on December 14, 1998;
　　5. The “Interim Measures for the Assessment and Management of Prospecting Rights and Mining Rights” issued by the Ministry of Land and Resources on March 30, 1999;
　　6. The “Measures for the Review and Confirmation of Mineral Resource Reserves,” issued jointly on July 15, 1999, by the Ministry of Land and Resources, the State Planning Commission, the State Economic and Trade Commission, the People’s Bank of China, and the China Securities Regulatory Commission, Document No. [1999]205 of the Ministry of Land and Resources;
　　7. The “Interim Measures for the Administration of Qualifications for Valuation of Prospecting Rights and Mining Rights” issued by the Ministry of Natural Resources on October 31, 2000;
　　8. The “Interim Provisions on the Granting and Transfer of Mining Rights” issued by the Ministry of Natural Resources on November 1, 2000;
　　9. Guidelines for Mineral Rights Valuation;
　　10. The “Notice on Issues Concerning the Assessment and Confirmation of Mining Rights” issued by the Bureau of Land and Resources on September 2, 2002.
　　(2) The Formation and Disposal Process of Mining Rights
　　Before obtaining mining rights, the proposed mining area typically undergoes three stages of exploration: First is general exploration, usually organized by the state; second is detailed exploration; and third is precise exploration. If the detailed and precise explorations are funded by a company, the mining rights acquired will belong to that company. Moreover, prior to conducting detailed and precise explorations, the company must pay the fees required to obtain exploration rights.
　　After the detailed exploration is completed, if a company wishes to obtain a mining license, it must submit a reserve report, a preliminary design report (typically prepared by the Coal Research Institute), and an assessment report on mining rights. Whether mineral resources in a particular area can be mined in a divisible manner depends on the preliminary design report issued by the Coal Research Institute; if the design report concludes that divisibility is feasible, then the resources can be mined in a divisible way.
　　In coal-power integrated projects, the disposal methods for mining rights mainly include the following two types:
　　a. Contributing mining rights as capital investment, thereby becoming part of the capital contribution made by the mining enterprise that serves as a joint venture partner in the project company;
　　b. After the project company is established, it will purchase the mining rights required for the project from the mining enterprise, with the payment for the mining rights to be made in installments. According to relevant regulations, when the state grants mining rights and the payment is made in installments, the full amount must be paid within six years. However, when transferring or assigning the mining rights obtained through such granting, there is no statutory limit on the duration of installment payments. Therefore, when transferring mining rights, the timing of installment payments can be agreed upon by both parties involved.
Due to the increasing attention paid by the state to mining rights in recent years and the implementation of a policy for the paid transfer of mining rights, the prices for the assignment and transfer of mining rights have been trending upward. Given the substantial amounts involved in mining rights transactions, in coal-power joint venture projects, the design of the mining rights disposal plan is critically important, as it directly affects the equity stakes and returns that each joint venture party holds in the project company.
　　However, regardless of the method used to dispose of mining rights in coal-power integrated projects, the process will invariably involve the transfer of such mining rights from the mining enterprise to the project company. The approval for the transfer of mining rights is granted by the original issuing authority of the mining right certificate. In principle, for mineral resource reserves exceeding 100 million tons, the approval is handled by the Ministry of Natural Resources; for reserves below 100 million tons, the approval is handled by the local Department of Natural Resources.
　　Documents Required for the Transfer of Mining Rights
　　1. Documents that the transferor of mining rights must submit:
　　2. Application for Transfer of Mining Rights;
　　3. A copy of the mining license;
　　4. Supporting documents issued by the mining registration authority certifying that the transfer applicant has paid the mining rights usage fee and the mining rights purchase price as required;
　　5. Supporting documents issued by the authority responsible for the collection and administration of mineral resource compensation fees, certifying the status of payment of such fees;
　　6. Supporting documents issued by the authority responsible for the collection and administration of the resource tax, certifying the status of resource tax payments;
　　7. Proof materials issued by the competent authority for geological and mineral resources certifying that there is no dispute over mining rights;
　　8. The mining rights transfer contract signed by the applicant for transfer and the transferee;
　　9. Map of the mining area’s boundaries and a schematic diagram showing its geographic location; the latter map must be in A4 size (210mm × 297mm).
　　10. Report on the Development and Utilization of Mineral Resources;
　　11. Mining rights appraisal report and appraisal confirmation documents.
　　2. Documents that the transferee of mining rights must submit:
　　Application for Transfer of Mining Rights;
　　A copy of the legal entity certificate for the mining enterprise;
　　Creditworthiness certificate that can meet the requirements for this mining investment;
　　Other supporting documents demonstrating the assignee’s qualifications.
　　II. Statistics on the Valuation and Acquisition of Mining Rights by Some Listed Companies

Company Name	Proven Reserves (100 million tons)	Assessment agency	Evaluation time	Assessment value	Transaction price	Payment method
Datun Energy	(Yaoqiao, Kongzhuang, Xuqing, Longdong) 6.123 (Proven reserves: 10.04)	Beijing Haitians	2000	60.2732 million	60.2732 million	Pay in full within 2 years
Yanzhou Coal Industry	(Jining No. 3) 5.2	Beijing Guoyou Dazheng	April 30, 2000	132 million	132 million	Pay in full within 10 years (interest-free)
Guoyang New Energy	(Guoyang No. 1 and No. 2 Mines) 10.42	Beijing China Mining Association	1999	115 million	115 million	Pay off within 5 years
Panjiang Fine Coal	/	Beijing Haitians	August 2000	52.42 million	52.42 million	Pay off within 30 years
Shenhuo Coal Power	(Xinzhuang, Gedian) 1.25 (Reserves held: 2.17)	Henan Geological and Mineral Resources	1999	/	Free transfer	/
Note: Due to differences in coal quality among various coal mines, reserves and assessed values are not necessarily proportional.

　　III. Procedures for Business Registration of Coal-Fired Power Enterprises

　　According to Document No. [1998]104 issued by the Ministry of Land and Resources and the State Administration for Industry and Commerce on August 24, 1998, the procedures for establishing coal-fired power enterprises (mining section) are as follows:
　　1. Before applying for the delineation of a mining area, applicants for mining rights intending to establish mining enterprises shall, in accordance with the “Regulations on the Administration of Enterprise Name Registration,” apply to the administrative authority for industry and commerce for pre-approval registration of the mining enterprise’s name.
　　2. After the applicant for mining rights of a mining enterprise has been approved by the administrative authority for industry and commerce and obtained the right to use the enterprise’s name, they shall, in accordance with the provisions of Article 3 and Article 4 of the “Administrative Measures for the Registration of Mineral Resource Exploitation” and with authorization from the competent department of geology and mineral resources under the State Council, apply to the relevant department of geology and mineral resources (hereinafter referred to as the mining registration management authority) for the delineation of the mining area boundaries.
　　3. Applicants for mining rights intending to establish mining enterprises shall, holding the approval document delineating the mining area issued by the mining registration and management authority as well as other relevant documents and certificates, go to the administrative authority for industry and commerce to register as a corporate entity or obtain a business license.
　　4. After a mining enterprise has been approved and registered by the administrative authority for industry and commerce and issued a business license or a corporate legal person’s business license, it shall, in accordance with Article 5 of the “Administrative Measures for the Registration of Mineral Resource Exploitation,” complete the mining registration procedures and obtain a mining permit before engaging in mining enterprise development, construction, and mineral resource exploitation activities.
　　The above discussion has outlined, from a practical perspective, the relevant methods and procedures for handling mining rights in coal-power joint-operation projects. Typically, such projects involve substantial capital investments as well as issues related to the project company’s land use, equity structure, organizational framework, and more—and may also entail arduous negotiations among the joint-operation partners. Moreover, these projects give rise to numerous legal and practical challenges involving mining and energy laws, corporate law, land management law, and other related areas. It is therefore crucial that all parties involved in coal-power joint-operation projects pay close attention to these legal matters to avoid unnecessary disputes.
　　Jintiancheng Law Firm, Shanghai City??? Wang Qinghua? Xu Jun
　　Tel: 0086-21-53851095
　　Email: wangqinghua@allbrightlaw.com
　　Website: www.allbrightlaw.com