In 2008, just like the global mining and financial markets, the world experienced sudden and dramatic changes. As competition for mineral resources worldwide intensified to a fever pitch, the financial storm triggered by the U.S. subprime mortgage crisis spread globally, causing capital markets to undergo a sharp contraction in investment within a short period. As a result, the global mining economy was affected to varying degrees. In the second half of 2008, as the financial storm continued to spread across the globe, monetary and financial policies became the most challenging issue for governments around the world. Affected by the financial crisis, starting from November 2008, global mining markets—including those of developed mining nations such as Australia, Canada, and the United States—began to show sluggish trends. Due to an oversupply in the market, prices of mineral products such as coal, iron ore, and steel started to decline, leaving mining companies worldwide struggling through a harsh winter. Given the uncertainty surrounding when the financial crisis would bottom out, governments adopted different goals and strategies in their financial rescue plans. Consequently, the period of major adjustments in mining policies had not yet arrived, and protectionist tendencies toward domestic mineral products were on the rise in various countries. It is expected that after the financial rescue plans of each country become clearly defined in 2009, the mining industry will enter a phase of adjustment marked by revitalization policies.
Looking at the level of attention paid to mineral products throughout the year, energy minerals continue to be the focal point of mining policy adjustments in various countries, far surpassing the attention given to ordinary minerals. In most countries, policies toward minerals such as oil and coal are primarily adjusted through technical measures like tax rates. From the perspective of mining industry trends, a considerable number of countries have come to recognize the importance of new energy sources for socio-economic development and environmental improvement. As for the degree of emphasis placed on the mining sector by different countries, many nations rely heavily on mining to drive and enhance their domestic economic growth; in fact, mining holds an even more critical position in the economies of numerous countries. It can be said that mining policies around the world are becoming increasingly pragmatic—shifting away from simply opening up domestic markets with the sole aim of maximizing mining profits, and instead placing greater emphasis on the strategic significance of the mining sector and the state’s ability to maintain control over it.
    I. Energy Section   
1. With oil prices experiencing dramatic fluctuations, tax rate adjustments have become the primary means of regulation. Developing new energy sources and reducing dependence on oil have almost become a common goal for all oil-consuming countries.
(1) In the first half of the year, in response to the sharp rise in oil prices, many countries around the world adjusted their tax policies. The tax objectives of oil-importing countries and oil-exporting countries are fundamentally different.
At the start of 2008, oil prices began to rise sharply, reaching nearly $147 per barrel by mid-year. Some countries—especially those that import oil—were suffering greatly, while exporting countries were overjoyed. To ease the burden on consumers and boost both production and imports, many countries adopted adjustments to their tax policies.
Importing countries in Europe, Asia, and South America have纷纷 lowered oil-related taxes to address their urgent needs.
To ease the pressure on consumers caused by soaring fuel prices, several EU countries—including Italy, Poland, and France—have successively reduced their value-added tax (VAT) and excise taxes. To offset the fiscal losses resulting from the reduction in excise taxes, the Italian government has increased the corporate income tax rate imposed on oil companies. The Polish government is considering adopting a policy of cutting gasoline taxes. As the EU country with the highest VAT rate on petroleum products, the United Kingdom has seen several members of parliament calling on the government to further postpone its planned fuel tax hike. The reduction in VAT and excise taxes—the primary sources of revenue for EU member states—means that fiscal pressures on EU countries will continue to intensify.
Asian oil-importing countries such as the Philippines and India have successively abolished import taxes, ensuring stable operations for oil companies and boosting imports. India has adopted a resolution to raise fuel prices while simultaneously reducing import duties and excise taxes on crude oil and refined fuels. The Philippine government has eliminated all import tariffs on crude oil. In November 2008, the Argentine government introduced a tax incentive program that primarily includes lowering export taxes on petroleum products and accelerating the refund of value-added tax. This initiative aims to encourage businesses to invest in oil exploration, production, and refining, thereby increasing the supply of petroleum products in the market.
On the export side, countries are seizing the opportunity to strike while the iron is hot. To capitalize on the current surge in oil prices and boost revenue, the Russian government has lowered domestic oil-extraction taxes, encouraging oil companies to ramp up production to full capacity. The Russian government regards increasing oil output and fostering the development of the petroleum-processing industry as key priorities and plans to implement a series of tax measures to support this goal. The Russian government has approved a bill that will reduce the tax burden on oil companies starting from 2009. Oil companies engaged solely in exploration activities will enjoy a 10-year tax exemption, while those involved in both exploration and production will receive a 15-year tax break. The implementation of this tax-cut policy is expected to add between 165 billion and 175 billion rubles in annual revenue for oil companies. Moreover, starting December 1, 2008, Russia’s export tax on crude oil could be reduced to as low as $192.1 per ton.
(2) In the second half of the year, oil prices plummeted, putting tremendous pressure on several oil-exporting countries, which were forced to cut production and raise taxes.
Affected by the global financial crisis, international oil prices plummeted sharply in the second half of 2008, posing a severe challenge to the 12 OPEC member countries whose economies are highly dependent on revenues from oil exports. On October 24, 2008, the oil-exporting member countries announced that, starting November 1 of that year, they would cut crude oil production by 1.5 million barrels per day in an effort to halt further declines in oil prices. Should this production-cut decision still fail to stem the downward trend in oil prices, the countries would consider further reductions in output. Even so, oil prices continued to fall throughout December.
Among OPEC member countries, Venezuela is one whose economy is heavily dependent on oil. The sharp drop in oil prices and the resulting decline in production have had a profound impact on the Venezuelan government’s fiscal revenues and overall economy. According to the 2009 fiscal budget adopted by the Venezuelan parliament in December 2008, oil revenues for 2009 are set to decline significantly. As a result, the Venezuelan government will be compelled to adjust its fiscal policies. To boost fiscal revenues, the Venezuelan government may resort to raising tax rates and introducing new types of taxes. Moreover, the Venezuelan government has long provided substantial subsidies for domestic gasoline prices; driven by the need to cut expenditures, it may appropriately raise domestic gasoline prices in 2009. Additionally, the Venezuelan government faces the task of reducing oil production. If oil prices remain persistently low, investment in Venezuela’s oil industry will also be severely affected, and some new projects may even be forced to halt altogether.
Iran is OPEC’s second-largest oil producer, and petroleum is Iran’s pillar industry. On December 3, 2008, the Iranian government publicly acknowledged for the first time that, due to the sharp plunge in international crude oil prices, Iran’s interests had been severely damaged. The precipitous drop in oil prices has now threatened Iran’s fragile economy. As a result, the Iranian government will be compelled to cut expenditures, significantly increase subsidies, and raise taxes.
(3) Countries around the world have begun to reduce their dependence on oil.
Energy policy is a fundamental strategy that determines the future of a nation. The development of any economic entity is inseparable from energy, and many countries are heavily reliant on oil for their energy needs. Over the past year, the oil market has experienced dramatic ups and downs. After soaring to a peak of $147 per barrel in the first half of the year, international crude oil prices plummeted to a low of nearly $40 per barrel by year-end. Even though international crude oil prices saw a slight rebound amid the ongoing Israel-Palestine conflict, the recovery was insufficient. Nevertheless, this has at least given many countries—previously caught off guard by high oil prices—some breathing room. Yet after experiencing the thrilling roller coaster of soaring oil prices, major consuming nations such as the United States have increasingly realized that they are shifting from an advantageous position to a disadvantageous one. Relying on others is no longer a viable option; reducing dependence on oil has become an unavoidable choice for many countries.
The United States has set a policy goal of reducing its demand for petroleum by 20% within the next 10 years and has established mandatory fuel standards. By increasing the supply of renewable fuels and alternative fuels, the U.S. aims to lower gasoline consumption, thereby cutting gasoline demand by 8.5 billion barrels—a reduction of 20%—by 2017. All of these measures are designed to decrease the country’s reliance on imported oil. Under the UK’s Renewable Energy Act, the country plans to reduce its dependence on petroleum by 7% by 2020. Switzerland is stepping up its efforts in research, development, and innovation in energy efficiency and alternative energy sources, with the aim of reducing its reliance on oil, whose prices have been soaring. Cambodia plans to build a nuclear power plant as part of its strategy to reduce its dependence on imported oil. Vietnam has introduced a locally produced blended ethanol-gasoline fuel, aiming to “ensure national energy security and reduce economic dependence on petroleum products.” The Puerto Rican government will invest $165 million in wind power generation, with the goal of reducing its reliance on petroleum for electricity generation by 20% by 2015. The Philippines emphasizes the need to reduce its dependence on imported oil in the future and to strengthen the development and utilization of renewable energy sources.
In the current situation, even though oil-importing countries no longer need to be anxious about purchasing high-priced oil, an increasing number of nations and regions are nonetheless recognizing that they cannot afford to remain overly dependent on petroleum. To break free from this dependency, it is imperative to vigorously develop new energy sources. Globally, it seems we are moving toward an era—“the post-petroleum era”—that no longer relies on oil.
(4) Oil strategic reserve policies must keep pace with the times.
While reducing their dependence on oil, some countries continue to build up and adjust their petroleum reserves in order to ensure national energy security. At the same time, this also reflects the ambitions of major world powers to gain control over the international energy market.
The U.S. Strategic Petroleum Reserve program was implemented very successfully in 2008. At the beginning of the year, as oil prices continued to rise, the U.S. remained committed to carrying out the National Strategic Petroleum Reserve program. However, by May, the U.S. Department of Energy announced that, in order to avoid further fueling the rise in domestic gasoline prices, the U.S. government would suspend adding to the Strategic Petroleum Reserve in the second half of 2008. Following the onset of the financial crisis, oil prices plunged continuously, falling below $50 per barrel. In December, the U.S. Department of Energy announced that it would resume replenishing the Strategic Petroleum Reserve next month. Accurately timing the reserve buildup and seizing favorable market conditions were key factors behind the U.S.’s successful implementation of the petroleum reserve program in 2008.
The European Union plans to revise its strategic petroleum reserve system. In April 2008, the European Commission launched a public consultation, aiming to amend the EU’s current strategic petroleum reserve system to better address the changing circumstances in an era of high oil prices. Due to factors such as geopolitical developments, the risk of disruptions to oil supplies is intensifying. In the medium to long term, it will become increasingly difficult for oil supply to keep pace with growing demand; therefore, it is essential for the EU to further refine its strategic petroleum reserve system.
The Russian government is also considering building oil reserves to maintain policy independence. By establishing these oil reserves, Russia will be better positioned in the future to exert more effective control over the global oil market.
(5) Promote new energy policies such as renewable energy and clean energy, and implement environmental protection policies.
Due to the soaring oil prices in the first half of 2008, countries around the world have been racking their brains to cope with high oil prices. Promoting new energy policies has almost become a consensus among many mining nations, and even the onset of the financial crisis has not caused them to change their original intention.
Having been elected as the new U.S. president, Obama has repeatedly stated that, after taking office, the United States will invest $15 billion annually in clean energy, and will also develop safe nuclear energy and clean coal technologies. Investing in clean energy will not only reduce America’s dependence on foreign oil but will also create five million jobs related to clean energy, helping the U.S. emerge from the economic crisis.
The European Commission is vigorously promoting new energy policies, strengthening energy diversification, ensuring energy supply security, and improving energy efficiency. It recommends using a variety of measures to encourage energy conservation and has established, through legislation, targets for the development of renewable energy and biofuels. In November 2008, following the financial crisis, the European Commission unveiled a €200 billion European Economic Recovery Plan, which emphasized that initial investments should be directed toward energy efficiency to save energy, as well as toward clean technologies. Beyond considerations of economic development, the EU’s Economic Recovery Plan repeatedly highlighted the importance of developing a low-carbon economy and enhancing energy security. Clearly, shifting energy-use strategies represents a key direction for the EU’s future energy policy. Within the EU, the British government is set to introduce even stricter measures on greenhouse gas emissions from coal-fired power plants, raising environmental standards. Meanwhile, the German government, driven by concerns about sustainability, safety, and cost savings, has decided to phase out coal mining by 2018 and gradually abandon its already sizable nuclear power capacity, while vigorously expanding the development of renewable energy sources such as solar, wind, and biomass.
Canada has enacted legislation establishing a renewable fuels standard, requiring that gasoline sold in Canada contain 5% ethanol by 2020. The law also stipulates that diesel fuel sold in the country by 2012 must include 2% of its volume sourced from renewable resources.
In addition to the European Union, the United States, and Canada, several developing countries are also vigorously promoting environmental protection. In August 2008, China’s top legislative body adopted the “Law on Promoting the Circular Economy,” which came into effect on January 1, 2009. This law aims to foster the development of a circular economy, enhance resource-use efficiency, protect and improve the environment, and achieve sustainable development. Vietnam plans to vigorously develop its environmental protection industry so that by 2020, the country’s environmental protection sector will be capable of adequately addressing the pollution generated by the nation’s rapid economic growth.
2. Soaring coal prices are once again sparking a global boom in coal mining development, and trade protectionism may be on the rise.
Against the backdrop of growing global energy demand and persistently high oil prices, coal’s position has become increasingly prominent. During the first half of 2008, when oil prices were particularly high, coal prices rose rapidly—driven by factors such as severe weather in some regions, national energy policies, and robust global demand—eventually even outpacing the increase in oil prices. This surge in coal prices has sparked renewed enthusiasm for coal mining development, which exhibits the following key characteristics:
First, major coal-producing countries have been ramping up their output. Even as the approval process for coal mine development in the United States has become increasingly stringent, coal production in 2008 still reached 1.19 billion tons, and coal exports surged to 89 million tons, making the U.S. the world’s leading coal exporter for the first time since the 1990s. In 2008, Australia’s newly commissioned coal mines achieved a total capacity of 18.6 million tons, representing a 5% increase over the 2007 output. In response to earlier electricity crises, South Africa has implemented a plan to boost domestic coal production and expand port throughput capacity, thereby alleviating energy shortages and aiming to increase coal exports further. To ensure sufficient energy supplies for economic growth, the Indian government, in addition to increasing coal imports, has urged domestic companies to raise coal production. The country plans to boost coal output by 50% between 2008 and 2012, reaching 650 million tons. The Russian government has indicated that coal will play a dominant role in the future. Uzbekistan plans to increase the share of coal in its energy mix. To take a step toward expanding coal mining, Uzbekistan is currently drafting a national development plan for the coal sector, aiming to raise coal’s share of the energy mix from 4% in 2002 to 15% by 2010.
Second, we need to step up investment in overseas coal mine development. This includes not only major coal-producing countries such as China, India, and the United States, but also resource-scarce nations like Japan and South Korea, which rely heavily on imports. In April 2008, China’s Shenhua Group announced that it would invest in coal mines in Mongolia, Australia, and other countries. India indicated that it would invest in the development of coal mines in South Africa. Strategically speaking, overseas investments can, on the one hand, ensure a stable domestic supply of coal, and on the other hand, enable companies to reap profits during periods of rising coal prices.
Third, coal mines that had been shut down are resuming production. With the advancement of clean coal technologies and the recent rise in coal prices, two mines in the UK have already resumed operations. Meanwhile, Japan—whose coal mines were all closed in the early 21st century due to high extraction costs—is now seeing a significant increase in international coal prices. As a result, Mitsui & Co. has announced plans to redevelop coal mines in Hokkaido. This marks Japan’s first domestic coal mine development in 13 years, since 1995.
While ensuring energy security within their own borders, some countries are also exploring national coal policies and introducing regulations aimed at restricting coal exports, thereby safeguarding domestic energy self-sufficiency. Moreover, amid the impact of the financial crisis, resource conservation and mining trade protectionism appear to be on the rise. South Africa’s Department of Mineral Resources and Energy has revisited its national coal policy and plans to introduce relevant measures by the end of 2008 to limit coal exports and meet domestic demand. In 2008, Vietnam, in order to satisfy its domestic needs, already halted coal exports to six regions, including the Netherlands, Hong Kong, South Africa, the Czech Republic, Singapore, and Switzerland. As coal imports are expected to increase in the future, Vietnam will also introduce policies governing coal imports and production, standardizing import channels to ensure the country’s energy security. In August 2008, Bangladesh discussed details of a draft national coal policy, which is currently undergoing further review and refinement by the Ministry of Energy.
3. Developing nuclear power has become a new option for some countries.
For African countries with underdeveloped economies and scarce coal resources, developing nuclear power has become one of their options for tapping into new energy sources. Several African nations, including South Africa, Zambia, and Nigeria, are forging ahead in the nuclear energy market by formulating policies related to uranium mining and building nuclear power plants.
In the Southern African region, Zambia has enacted legislation governing uranium mining—a milestone development for Zambia’s mining sector, which has long been dominated by copper and diamond mining. The new law regulates uranium mining, storage, and export, and explicitly prohibits the transfer or use of uranium ore to manufacture nuclear weapons or nuclear facilities. This legislation, which governs the exploration, extraction, and processing of uranium ore and other radioactive minerals, grants the Minister of Mines the authority to issue licenses for uranium mining and export, thereby ensuring legitimate channels for ore exports and paving the way for the expansion of uranium mining in Zambia. Under the law, mining companies can now freely apply to the Zambian authorities for permits to carry out mining activities. With its abundant copper reserves already drawing significant interest from mining companies, Zambia’s discovery of uranium deposits has further enhanced its appeal to the mining industry. To address its electricity crisis, South Africa’s cabinet has approved a nuclear energy policy, enabling this controversial technology to play a role in alleviating power shortages. The policy aims to increase the share of nuclear power in electricity generation as part of South Africa’s broader energy diversification strategy, thereby enhancing energy security. At the same time, the nuclear energy policy will help shift South Africa away from its current over-reliance on coal-fired power.
The East African nation of Kenya is also joining the ranks of countries actively developing nuclear power, and is preparing to build a nuclear power plant to increase its domestic electricity supply.
In North Africa, Egypt—a major country—also prioritizes nuclear energy as its first choice for developing new energy sources. In addition, Nigeria has been actively pursuing nuclear power projects.
      II. Mining Law Section: Amending the Mining Law Is an Everlasting Melody in the Mining Industry
1. The mining laws of some countries have fallen behind the pace of changing times, and revising these laws has been put on the agenda.
In recent years, driven by the soaring prices of gold, silver, copper, and uranium, the number of mining rights applications submitted by U.S. mining companies has surged dramatically within a short period, a trend that has become increasingly difficult to control. As a result, the 1872 U.S. General Mining Act—long the cornerstone of U.S. mining policy—has now become obsolete. Left over from the era of the westward expansion, the 1872 Mining Act granted priority rights to mineral extraction on public lands, exempting miners from paying royalties and imposing no minimum environmental protection requirements. Consequently, it is easy to imagine the bleak future of abandoned mines and polluted rivers that will inevitably emerge. As early as the 1980s, U.S. lawmakers began calling for amendments to the 1872 Mining Act. In June 2008, conservative lawmakers from New Mexico proposed that the Senate revise the 1872 Mining Act, and support for such revisions has been steadily growing ever since. Subsequently, representatives from Arizona urged federal officials to take urgent measures to protect the land damaged by uranium mining near the Grand Canyon. Clearly, what the United States needs to do now is draft a more practical amendment, set a specific date for a vote, and ensure its passage during committee deliberations.
Ontario, Canada, is also planning to revise its mining legislation. In December 2008, the Ministry of Northern Development and Mines expressed its desire to allocate more time for further consultations with mining communities, landowners, and the mining industry itself regarding future developments and changes. The deadline for the revised mining legislation has been postponed from December to January 15, 2009. Ontario’s current mining law has been in effect for over 100 years and has faced criticism for lacking clear provisions on how exploration and mining companies should engage in consultations with local communities. The new mining legislation aims to achieve a legislative purpose that is both effective and balanced.
Starting in October, Brazil’s Ministry of Mines and Energy began reforming its mining legislation. Brazil’s mining and energy industry may draft a new national mining law to bring the country’s mining regulations up to date. The new mining law could establish a new agency to regulate and replace the National Department of Mineral Production (DNPM) under the Ministry of Mines and Energy. This new agency would also be empowered to regulate mining taxes. The government is considering breaking the monopoly on uranium mining.
Some African countries have revised their mining laws. In June 2008, the revision of Ecuador’s new Mining Law was largely completed. The new law paves the way for the state to engage in mining activities through the national mining company and recommends that each mining enterprise calculate its mining tax amount from the very start of production and then deduct the costs incurred during the mining process. To facilitate mining operations, the proposal suggests adjusting mining rights by having the state re-sign extraction contracts; companies that fail to meet the terms, deadlines, or obligations stipulated in their contracts will lose their mining rights. In terms of environmental protection, the new Mining Law adopts certain mining regulations from countries such as Chile and establishes charts and indices to measure pollution levels generated by mining activities. The new law will set up a mechanism under which the number of mining rights is not limited during the exploration phase, but the area covered by these rights is restricted. However, once the exploration phase ends, right holders will be entitled to only 50% of the original area they initially applied for; when mining begins, the maximum area that can be exploited is limited to 5,000 hectares. The new law imposes stringent conditions on the retention of already approved mining rights, requiring mining companies to make minimum investments based on both the area and the number of years involved. The new Mining Law opens up possibilities for large-scale development of the mining sector and is expected to yield positive outcomes in terms of socio-economic development and progress upon implementation. In July 2008, Venezuela’s forthcoming new Mining Law may introduce state ownership of the mining industry. This policy will compel some mining companies operating in Venezuela to transform into joint ventures. In 2008, the West African Economic and Monetary Union (WAEMU) began drafting a unified mining law aimed at harmonizing standards, resource policies, and investment contract terms among the region’s member countries. Such a law seeks to promote solidarity and harmony among WAEMU member states, attract foreign investment, ensure that local populations benefit from resource extraction, and safeguard the environment for future generations. The legislative process for this proposed law was launched on April 4, 2008, in Abuja, Nigeria.
Although Mongolia has implemented a new mining law, adjustments are still needed. Since Mongolia revised and promulgated its Mining Law in 2006, it has faced considerable criticism. As prices of most mineral commodities—such as gold, copper, and coal—have risen sharply on the international market, investment in the mining sector has surged rapidly, giving rise to numerous problems, including the lack of unified registration, planning, and centralized policy management for mineral reserves; as well as the absence of comprehensive planning and standards in the mining industry. In January 2008, the Mongolian government convened an extraordinary cabinet meeting to propose another revision of the Mining Law, with plans to amend the following provisions: ① Prohibit the transfer of mining rights for purposes of sale, gift, mortgage, or inheritance; ② Reaffirm by law the establishment of the “National Unified Fund for Minerals”; ③ Uniformly clarify the proportion of state participation in mining development, coordinate the rights and obligations of mining right holders in accordance with civil law, clearly define the special permits required for granting mining rights, and specify the procedures and regulations governing changes, termination, transfer, and mortgage of mining rights.
2. Some countries have made amendments to legislation related to mining safety and health.
Starting October 1, 2008, the Queensland government in Australia introduced a new mining safety and health tax to strengthen the management of mine workers’ safety and health in Queensland. In May 2008, the Queensland government amended the 1999 Mining and Quarrying Safety and Health Act. The draft amendment clarified regulations governing underground mining activities, specified the powers of authorized inspectors, and detailed procedures for emergency response to unexpected incidents. In November 2008, South Africa enacted a new Mines Safety Act, which tightened regulations on mining companies that violate constitutional provisions and imposed harsher penalties on mining company executives who flee the country following accidents. The newly revised Mines Safety Act aims to make mining company managers fully aware that they are accountable for mine fatalities and severe penalties. However, the new Mines Safety Act has faced some resistance, with critics arguing that it could deter mining investment in South Africa.
3. Some countries have been implementing revisions to their mining laws for many years, yet no final conclusion has been reached.
Indonesia currently uses the 1967 Basic Mining Law. As the mining landscape continues to evolve, this mining law—having been in effect for over 40 years—is now seriously hindering the development of the mining sector. Five years ago, amending Indonesia’s mining law was already placed on the agenda. Although the final new mining law has yet to be enacted as of 2008, several related policies have already been clarified. For instance, the new Indonesian mining law stipulates that foreign investors must sign contracts with state-owned enterprises. Under the Mining, Minerals, and Coal Regulations, the government will streamline approval procedures by replacing extraction contracts with permits issued by the government for longer durations. This move reflects the government’s increasingly conservative stance toward the business environment. Under the new law, licenses are categorized into three types: strategic mineral development zones, non-strategic mineral development zones, and small-scale mineral development zones, each of which is issued by different government agencies. Another new regulation requires that mineral products must undergo local processing before they can be exported.
China began preliminary research on amending the Mineral Resources Law, as well as studies on revising the Mineral Resources Law and developing supporting regulations, back in 2004; however, no substantial progress has been made since then. Over the past four years, the mining industry has undergone tremendous changes, making it increasingly difficult to revise the Mineral Resources Law. In 2008, the Leading Group for the Amendment of the “Two Laws” under China’s Ministry of Natural Resources held multiple rounds of discussions and deliberations on draft amendments to the Mineral Resources Law. These discussions focused on a range of pressing issues, including the currently low entry barriers for the mining sector, the property rights nature of mining rights, problems related to approval authority, and the large number of small mines that are small in scale and poorly distributed. As a result, a draft amendment to the Mineral Resources Law was submitted; yet, no final version has been adopted to date. It is expected that in 2009, relevant authorities will accelerate the pace of revising the Mineral Resources Law. The revision of the Mineral Resources Law is also anticipated to have a positive impact on China’s future mining market.
4. The amendments to mining laws in some countries are policy adjustments aimed at specific entities.
In June 2008, the Peruvian government amended the General Mining Law through national legislation. The new regulation aims to standardize mining activities conducted by small-scale mining enterprises. According to this regulation, local governments will be authorized to inspect and impose penalties on small enterprises based on their production equipment capacity, profitability, and mine area. The scope of inspections also includes miners—both those already registered and those not yet registered—with the Mining Bureau of the Ministry of Energy and Mines as small-scale mine owners. Under this regulation, local governments will play a key role in formalizing agreements or extraction contracts between small-scale miners and mineral rights holders, thereby enhancing these small mines’ mining techniques and management levels and ensuring that they carry out rational exploitation of mineral resources. Gold mining is an important source of economic revenue for Mali; as part of Mali’s revision of its mining laws, the country may increase its shareholding in gold mining operations from the current 20% to around 35%.
    III. Investment and Returns   
1. Many countries are increasing their investment in the mining sector and actively encouraging its development.
Strengthening investment in mineral exploration and encouraging mining investments are important strategies that some countries rely on to drive their national economies through the mining sector. The scale of mining investment reflects the degree of importance attached to the mining industry within a country and underscores its pivotal role in the national economy.
In 2008, the Russian government approved the “Outline for Mineral Resource Utilization by 2020,” drafted by the Ministry of Natural Resources. The new outline places particular emphasis on increasing investment in mineral resource exploration, especially in the oil and gas resources of Eastern Siberia. The outline points out that boosting investment in Eastern Siberia can accelerate the discovery of oil and gas reserves. In recent years, the Russian government has steadily increased its budget for resource exploration; in 2008, this budget had already risen to 22 billion rubles. By 2020, Russia plans to double its national spending on resource exploration, bringing it to 23 billion U.S. dollars. This proposal, already approved by the Cabinet, will enable Russia to speed up exploration efforts starting from 2009. Half of these expenditures will be allocated to oil and gas exploration, with the oil-rich region of Eastern Siberia receiving 5.5 billion U.S. dollars. Russia also plans to increase its production of gold by 4,000 tons, diamonds by 863 million carats, lead and zinc by 420,000 tons, copper by 1.3 million tons, and coal by 3 billion tons.
In addition to Russia, governments in the Philippines, India, and other countries also stepped up their investments in the mining sector in 2008. In 2008, the Philippines’ mining industry attracted investment totaling US$900 million, and the development of the mining sector has also brought employment benefits to the country. In April 2008, India introduced a new mining policy aimed at encouraging large-scale investment and boosting job creation. Over the next six years, investment in the mining sector is expected to reach 5 trillion Indian rupees, potentially creating employment for as many as one million people. In December 2008, the Rwandan government enacted a series of policies and laws targeting the mining industry, designed to attract both domestic and foreign investors to develop the country’s mineral resources. The government hopes that within the next five years, the country’s mineral export revenues will reach between 200 million and 250 million U.S. dollars. To protect the interests of mining investors, clear policies and regulations have been introduced; under these laws, investors will be allowed to lease mining sites for long terms.
Some countries that previously banned mining or imposed restrictions on certain types of mineral extraction—citing environmental or political conditions—are now beginning to lift these bans. In 2008, Costa Rica signed a decree lifting the ban on mineral exploration and extraction, which had been in place since 2002, provided that sustainable development is ensured and the environment is protected. Going forward, any company intending to engage in mineral development in Costa Rica will first need to meet a series of stringent environmental requirements, including establishing a comprehensive environmental management system—for instance, replanting three trees for every one tree felled—and safeguarding both surface and groundwater resources in mining areas from pollution. Mining companies will also be required to assist local governments in formulating and implementing plans that promote the sustainable socio-economic development of the region, ensuring that local residents benefit from mining activities. Starting July 30, 2008, the Liberian government lifted its ban on diamond mining, allowing people to begin applying for licenses to mine, sell, and act as agents for diamonds. In 2001, the United Nations had imposed sanctions on Liberia’s diamond industry, citing concerns that the country’s former president had used diamond revenues to fund the civil war. Following this, the Liberian government announced a temporary suspension of diamond mining and trade within the country. In April 2008, after determining that the new government was capable of ensuring orderly diamond trade, the United Nations lifted the sanctions. Since then, the Liberian government has taken a series of measures aimed at bringing the diamond industry back on track.
2. Opening up or tightening the mining sector varies from country to country.
Some countries—such as Ecuador—are beginning to take action against foreign companies that have been encroaching on their national mining interests. The Ecuadorian government has issued a decree revoking the concessions held by foreign companies. This move is driven by the fact that, over the years, successive governments have granted more than 4,000 mining concessions, most of which have been acquired by large private mining groups from Canada and the United States. The government accuses certain foreign mining groups of failing to make meaningful investments after obtaining mining rights in the country, instead profiting through reselling and flipping these concessions, thereby harming Ecuador’s national interests. The Ecuadorian Constituent Assembly will soon hold a vote on this decree. Once the decree is passed, the Ecuadorian government will gain control over 80 percent of the country’s mining concessions.
Amid a general trend toward tightening control over the mining sector, some countries are also making every effort to attract foreign capital into their mining industries. Among these countries are those that have long maintained a conservative stance and where the state traditionally plays a dominant role in mining, as well as countries that have never opened up their mining-related sectors to foreign investment—and still others that are developing countries.
Iraq’s New Energy Law strongly encourages foreign energy companies to invest in Iraq. Following the promulgation of the New Energy Law, Iraq will soon establish strategic partnerships with a series of international energy companies in the oil and gas sector. The New Energy Law will maximize the scope of investment and cooperation available to foreign investors in Iraq’s energy projects. Currently, Mexican law does not permit private enterprises to participate in the operation of the oil, gas, and electricity industries, which has significantly weakened the country’s energy sector competitiveness. Therefore, Mexico plans to enact legislation to open up certain segments of the energy industry to investment, gradually liberalizing specific areas of the energy value chain for both domestic private and foreign investors through energy-sector reforms. In 2008, Tunisia issued petroleum exploration licenses to companies from France and Australia. This marked the first time since 2008 that Tunisia had granted exploration licenses to foreign companies. In November 2008, Indonesia awarded exploration rights for oil and gas in nine blocks within the country to both domestic and international energy companies, including the U.S. firm ExxonMobil. Unlike Tunisia’s practice of issuing licenses to foreign companies, Indonesia has, over the past several years, transformed itself from a former member of OPEC into a net importer of crude oil. By once again offering new exploration rights and providing financial incentives for exploration activities, Indonesia aims to halt the continued decline in its domestic oil production. Vietnam encourages foreign investment in the coal industry, allowing foreign companies to explore and extract coal in the Red River Delta region. Priority is given to projects that can be settled in Vietnamese dong or through barter arrangements and do not require government guarantees. Uzbekistan is also making concerted efforts to attract foreign investment in its coal sector.
3. Relying on taxation to adjust the multifaceted interests within the mining industry.
Tax regulation is an important tool for regulating mining policies and can play multiple roles, such as adjusting government and corporate revenues and protecting domestic mining enterprises. Therefore, in 2008, despite the volatile state of the mining economy, many countries still relied on changes in tax policies to respond to these challenges.
Countries that rely on tax adjustments to regulate government revenues from enterprises include Australia and Zambia. In November 2008, New South Wales in Australia raised the royalty rate on coal to 10%. As a result of this move, the government can reap greater benefits from coal revenues. Meanwhile, Western Australia introduced a new policy regarding the use of royalties. Under the new policy, 25% of mining royalty revenues will be retained by local governments and must be allocated to the development of infrastructure and public services. Officials responsible for managing these funds stated that they will also enact legislation to ensure continued support and effective implementation of the role of local royalties. In January 2008, to ensure that Zambia would benefit from soaring international copper prices, the government raised the average tax rate on the mining industry to 47%. Under this tax increase plan, the Zambian government will impose a graduated tax rate on mining companies’ profits and levy an additional windfall profits tax. This measure is expected to boost Zambia’s tax revenue by US$400 million in fiscal year 2008. However, the new policy has faced resistance from various quarters.
Argentina is one of the countries that relies on tax policies to encourage investment in the mining sector. On November 12, 2008, the Argentine government introduced a tax incentive program aimed at encouraging enterprises to invest in oil exploration, production, and refining, thereby increasing the supply of petroleum products in the market. This tax incentive program also applies to investment projects designed to expand the production of oil and fuel. The key components of the tax incentive program include reducing export taxes on petroleum products and providing early refunds of value-added tax.
Countries that rely on taxation to protect their domestic mining industries include Vietnam and India. The Vietnamese government will amend Article 6 of the Law on Natural Resource Tax to increase export taxes on mineral resources and adjust tax rates for 1,181 types of commodities starting January 1, 2008. Export tax rates have been raised for raw commodities such as crude oil, metallic ores, and coal. The minimum and maximum tax rates for scrap steel have been reduced from 30%–40% to 10%–30%, while the minimum and maximum tax rates for scrap nonferrous metals have been lowered from 40%–50% to 10%–40%. In December 2008, the Indian government announced the elimination of export taxes on iron ore fines and a reduction in export taxes on lump ore to 5%. This move is also aimed at supporting domestic mining enterprises, given that iron ore is a key export product for India.
There are also several countries that have revised their tax rates on mineral products, such as Kazakhstan and Mozambique. The draft new tax law submitted by the Kazakh government to parliament for consideration sets out specific tax rate standards for the extraction of major metallic and non-metallic minerals. In February 2008, Mozambique introduced regulations governing taxes on oil and mining activities. The Mozambican government approved the “Regulations on Petroleum Production Tax” and the “Special Tax Regulations for Mining Operations,” as stipulated in Laws No. 12/2007 and No. 11/2007, respectively.
    IV. Mining and Communities: Environmental Conflicts and Economic Interests Involving Mining Operations and Local Communities—Issues Receiving Growing Attention
    In 2008, environmental damage caused by mining activities—resulting in deteriorating living conditions for local residents and endangering their health and safety—was on the rise, and this trend was no exception even in developed countries.
Increasingly, events are impacting the lives of residents in mining communities. In Colorado, USA, a surge in mining applications and extensive mining activities have contaminated drinking water in the Las Vegas area. Within a 10-kilometer radius of the Colorado River basin in the U.S., mining applications skyrocketed from 2,586 in 2003 to 5,545 in 2008. The massive scale of mining operations poses a serious threat to water resources near Colorado, prompting some officials to call for careful assessments of drinking-water quality before approving new mining projects. With no existing laws specifically addressing the interplay between mining and drinking-water safety, many environmental regulators are now urging amendments to the 1872 Mining Act. In northern England, 30,000 acres of public and private land could be contaminated due to uranium mining, potentially affecting more than one million people in the region as a result of uranium extraction and production. Residents of a village in Alaska, located north of the Arctic Circle, have filed a lawsuit in the U.S. District Court for the Northern District of California, accusing 24 energy companies of attempting to attribute the corrosion damage they’ve caused to global warming. These companies’ greenhouse gas emissions have led to atmospheric warming and the melting of oceanic glaciers—glaciers that previously shielded the village from harsh winter storms. As a result of these storms, homes and buildings are now at risk of collapsing into the sea, and the ground itself may begin to sink. This lawsuit is just one of many similar cases that have emerged since the United Nations Intergovernmental Panel on Climate Change released its comprehensive report last year, confirming human-induced contributions to global warming. In April 2008, Ecuador filed a lawsuit against the U.S. energy giant Chevron. The Ecuadorian government accused Chevron of causing severe environmental pollution in Ecuador between 1964 and 1990 and demanded that the company pay a total of $16.5 billion in compensation for pollution-related damages.
In addition to environmental damage, mining activities are also endangering the lives of local residents. Last year, a Swiss mining company produced 226,000 tons of zinc and 104,000 tons of lead at Mount Isa in Australia. As a result, in May 2008, blood tests revealed that 45 children in the Australian mining town of Mount Isa had lead levels exceeding the safety standards recommended by the World Health Organization; some children even had levels twice as high. The affected children have now filed lawsuits against the local government.
In addition to the significant harm caused by mining companies’ extraction activities to residents’ daily lives, physical health, and safety of life, the proper management of the relationship between mining companies and local residents has also drawn attention.
South Africa has begun to place greater emphasis on the relationship between the mining industry and the interests of local communities. In accordance with the requirements of the South African Mining Charter and the Black Economic Empowerment Act, all mining companies in South Africa must reapply to the government for production licenses. The South African Department of Mineral Resources and Energy will issue new licenses based on the Mining Charter’s stipulation that economic compensation be provided to “black” communities. At the same time, this initiative provides an opportunity to bring South African “black” enterprises into the management and operation of the country’s critical mining sector. Remarkably, the South African government has developed a deeper understanding of the relationship between mining companies and local residents. The government has reminded all mining companies that it is crucial for local residents to benefit from the mining economy. The government believes that if the interests of local communities are safeguarded, they will not oppose mining activities in their regions. From this perspective, it is evident that the government demonstrates foresight by taking into account the interests of local communities when managing the mining sector—a lesson that other governments would do well to reflect upon.
Looking at the global economy in 2008, the crucial role of the mining industry in national economies is self-evident. Examining the characteristics and trends of global mining policy adjustments in 2008, we can see that the globalization of the mining economy is increasingly demonstrating its powerful influence. The adjustment measures adopted are tending toward convergence, and the corresponding tax and technological policies used by various countries to respond to fluctuations in global mineral prices are remarkably similar. The mining sector—especially the energy sector—is becoming ever more closely intertwined with the economic and political destinies of nations, and in some countries, this close relationship has even been elevated to a strategic level. From the perspective of the general public, attitudes toward the mining industry can be described as mixed: people both love and hate it. Residents in mining regions widely experience and endure the adverse impacts of mining activities. Given the mining industry’s pivotal position and critical role within the resource, economic, and environmental systems, striking a balance based on humanity’s fundamental interests—namely, pursuing a sustainable, circular mining economy and adhering to a human-centered, science-based approach—is the essential principle guiding the global development of the mining industry.
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[2]Environmental Working Group http://www.ewg.org/
[3] http://www.miningnews.net  
[4] http://www.miningaustralia.com.au ∕
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[7] http://www.infomine.com ∕
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