Dear CIMG Members,

In this edition we have included some interesting news, events, information and articles. There has been much activity over the last couple of months as well as notices from MLR to release new regulations.

Please be reminded that the last CIMG Monthly meeting for 2006 will be held on Thursday December 14 at 4.00pm at the Swissotel.

News from the last CIMG meeting held at the end of November

Auslan opened the meeting and welcomed to those attending. He gave an update of the November 13 pre-China Mining Congress function, an update of the release of the Community Development Toolkit, update on the release of the CIMG 2006 White Paper, notes on the release of 2 laws by MLR regarding "Furthering Reform of the Exploration/Mining License Issuance" as well as the "Equity Method for Paying for Exploration/Mining License" and a final note regarding a news item in the China Daily on revisions to regulations that will affect exploration for gold. He also asked the floor for comments on the China Mining Congress. A presenation was also given by Kumsan on mining in North Korea. Lastly he announced upcoming events which are outlined in more detail below.

Auslan noted that the CIMG November 13 function, "State to State - Mining in the Provinces" was a success. He also thanked SinoGold and KPMG for their sponsorship of the day. The CIMG event followed on from the "Australia-China Mining" event held by the Australian Embassy in Beijing, This event focussed on inward investment in the resource sector in Australia. The "State to State - Mining in the Provinces" focussed on mining in the Provinces of China. The entire day attracted 280attendees with close to 100 attendees from Chinese Government and industry, On the "State to State - Mining in the Provinces" panel were the following provinces; Jiangxi, Shandong, Guangxi, Xinjiang, Shanxi, Guizhou and Hebei. A contact list of the the officials on the panel can be requested from the CIMG Secretariat. The officials from the provinces provided various outlooks on mining in their provinces and their attendance has opened the door for further discussions in 2007.

On the November 13 during the "State to State - Mining in the Provinces" the CIMG in association released the Mandarin version of the "Community Development Toolkit". The Community Development Toolkit was first published in November 2005, jointly by ICMM, the World Bank and ESMAP. The CIMG were responsible for the Mandarin translation. It was developed to support government, industry, and community efforts to realize more sustainable community development around mining and mineral processing operations. The Mandarin version of the Community Development Toolkit is the most comprehensive document of its type available in China and is a worthy addition to any company, NGO, government department looking at sustainable outcomes when engaging the community. The Toolkit was well recieved by domestic industry and the CIMG will be looking at some pilot project areas in 2007 where the toolkit will form a foundation to the sustainability platform of the CIMG. Copies of the Toolkit are free and are available from the CIMG Secretariat.

Just prior to China Mining the CIMG presented the "CIMG White Paper 2006" to officials at the Ministry of Land and Resources. The paper is bilingual and contains a number of issues facing international miners in China. Over 150 copies were distributed to officials and industry during the China Mining Congress. Copies of the White Paper can be downloaded from here.

Auslan made a short note on the that MLR Beijing issued 2 new regulations. The CIMG was recently informed that MLR Beijing issued 2 new regulations:
1.             Notice By MLR Regarding Furthering Reform of the Exploration/Mining License Issuance
2.             Equity Method for Paying for Exploration/Mining License

The following is the key contents of the document, which will be executed from Jan 1, 2007. with major contents as follows:
1.             In the aspect of new issuance of license, except for those can be applied for or agreed upon based on relevant government regulation, all licenses shall be bid for on the market.
2.             Except for otherwise stated, all license fees shall be transferred as state capital or equity.
3.             All exploration licenses which were previously issued freely and funded by the government or local governments and with proven resources, and all mining licenses that were given freely, shall be re-evaluated, and license holder shall pay for the deposits left.
4.             For the payment of license, the holder can pay by 1) one lump sum at one time; 2) down payment within 2 years;   mining license in 10 years; 3) equity based on the payment amount;
5.             Those funded by the state government shall be owned by the national geological fund management departments;
6.             Those previously received and changed status as national funds shall pay licenses;
7.             Those license held by the state-owned bureaus can continue to hold those licenses and can still change the license fee to state capital.
8.             For those metals that can not be dealt with on the market, such as uranium, the exploration/mining licenses are not being capitalized.

The regulations both in Chinese and English can be downlowded from here.

Comments were asked from the floor regarding news from the China Daily titled, "New rules to make gold shinier industry", that focussed on revisions to regulations that will affect exploration for gold. The CIMG is seeking comment from members on this news item. To read more a copy on the news article can be read clicking here.

Comments were also asked from the floor regarding the China Mining Congress. The comments were mixed. Comments included "a lack of majors", "drop in Chinese attendees", "Good traffic in exhibition area", etc. The comments were short and if you do have further comment on the congress please email them to the CIMG Secretariat.

Roger Barret from Kumsan JV presented on mining in North Korea. For those of you who would like a copy of the presentation or a interested in mining in this region please contact Roger at roger@kbc-global.com.

Lastly the CIMG has some interesting events lined up. One will be the tax update with PriceWaterhouseCoopers and SAT which will be held in January next year. As well, please mark your diaries for the CIMG Appreciation Dinner that will be held on 31 January. More details of these events will be emailed to you soon.

Member Update

THE SWANN GROUP HR SURVEY OF CHINA MINING INDUSTRY – NOVEMBER 06:

Earlier on in 2006  The Swann Group began a survey that was aimed to collect salary information of the industry in China, particularly from the point of view of the foreign mining company. Attached is the report that was written from the data collected by The Swann Group in association with the CIMG and the Mining Journal China. This is the second HR survey of the foreign mining community in China.

The Swann Group is very grateful for the time given by those who participated in the survey. It was not an easy task from either side; giving the data or receiving it. There were many different organisation structures in place and salaries paid in a variety of currencies. However, The Swann Group would like to note that it was great to be able to work with the mining community in China to draw as much of this together as they could.

Please note that confidentiality was critical in an exercise that looks at what people are paid. The Swann Group have been at pains to respect the privacy of individuals and companies in reporting the data gathered. It has not been possible to write a report that covers the broad sweep of info gathered. It is considered most fair that those who participated in the information gathering have the right to seek specific information for their particular needs. They are welcome to call Swann to get these more specific readings of the data. But of course, still within the confidentiality boundaries.

Feel most welcome to give The Swann Group or the CIMG Secretariat your feedback. As well, let the Secretariat know if you have any thoughts on other information that could be gathered by a later survey, which will continue these on a quarterly basis.

Click here to download the survey report

Feature Article

Background
The Convention on Biological Diversity provided strong support for the development of impact assessment techniques especially related to biodiversity. Although EIAs have traditionally addressed biodiversity issues, they have been generic in nature. Often, they did not consider non-protected species, different levels of biodiversity, structural and functional relationships within biological systems and between biophysical and socio-economic systems, potential indirect and cumulative impacts and possible mitigation measures, possibilities for enhancement or the concerns of communities and other biological resource users. In addition, they commonly lacked proper baseline surveys or data, the use of relevant scientific literature, clear criteria for assessing impact magnitude and significance and plans for post-project monitoring.

Taking Biodiversity into Account
In order to take into account various aspects of biodiversity, an environmental impact assessment should:
• consider all the relevant levels of biodiversity – bioregional, landscape, ecosystem, habitat, communities, species, populations and (when appropriate) individuals and genes; consider connections between the levels of biodiversity by looking at structural and functional relationships (such as connectivity, fragmentation and disturbance, hydrologic and demographic processes) and their relationship to biodiversity study areas likely to be affected by different impact types;
• collect more detailed abundance and distribution data on certain aspects of biodiversity without necessarily surveying everything in detail, but focusing on key biodiversity receptors; consider the full range of potential impacts, including indirect, cumulative and induced impacts;
• consider the social dimension – the importance of community and indigenous knowledge of local biodiversity aspects, traditional uses of resources and habitat and stakeholder participation; and set out clear criteria to judge the extent, magnitude and importance of impact.

The Importance of Starting Early
Ideally, assessments should be done at the exploration stage. However, the inherent redundancy of the process (only 0.1 per cent of targets represent potentially economic mineral deposits) means that there is resistance to spending survey money when the odds are that the area will be released with no further interest. On the other hand, early knowledge of critical biodiversity issues in a given project would provide very pertinent insights and should have some weight in the decision balance of the sustainability of the development project. (In fact, some money could be saved by stopping the project at an early instead of a later stage.) It is important to distinguish between the different stages of exploration and when an EIA is most likely to be triggered. General understanding of biodiversity issues in an area before bidding on exploration licences can be important.

An important step in gaining an understanding of how the system might be changed by a proposed project is to survey existing conditions – the baseline environment. The baseline survey should provide the necessary information on the site-specific environmental setting of the project. It should cover the different seasons, migrations, breeding and so on and should be, if feasible, long enough to establish pre-project trends. One important challenge in assessing baseline conditions is the limited time frame for a thorough assessment. Biodiversity field surveys require sufficient time and resources. And to be of significant value in the EIA, survey work needs to be initiated early in the process. There should be scope to take as long as necessary and appropriate to cover aspects such as migrations, breeding seasons, rainy seasons and so on.

Important Roles for Companies
Companies should demonstrate a high-level commitment to the integration of biodiversity aspects into decision-making processes and to the maintenance and enhancement of important and protected habitats and species. They should commit to addressing biodiversity at ecosystem, species and genetic levels as appropriate and to integrating associated social aspects.

The interrelationships between biological/ecological systems and human systems should be identified and the impacts on these relationships addressed in a local, regional, national and international context. In adopting an ecosystem approach, ecosystem functions and structure should be maintained.
The diversity of species or richness of ecosystems at the future project site should be understood, alongside related cultural and social aspects. Impact assessments should identify if a site is important and why. Does it contain or lie within a protected area? Is it a sensitive or vulnerable site with high biodiversity values? Is it a site of cultural importance? There should also be recognition of and respect for specific local biodiversity values and uses as well as for local, traditional and indigenous knowledge of the area.

Impact assessment should be viewed as a process, not a product. Direct, secondary and cumulative impacts on biodiversity should be assessed in a phased approach, both early in the project and throughout the life of the mine. Impact assessment should also take into account social, economic and health impacts. The open and iterative process should actively seek and allow time for stakeholder input. Biodiversity data gathered in baseline studies, impact assessments and subsequent monitoring should be shared with and validated by stakeholders, including local communities, academics, conservation organisations and other companies.

Impacts on biodiversity should be avoided wherever possible, minimised where they cannot be avoided, and mitigated where there are residual impacts. During the development phase of a project, there should be a rigorous assessment of all options, including ‘do nothing’. Offsets may be useful in mitigating residual impacts, and preference should be given to in situ offsets that are aligned with local, regional, national and international conservation strategies and goals and that bring a net positive benefit for biodiversity conservation.

Last, companies can manage risk around biodiversity and maximise positive contributions by working in partnership with government, communities and others. Community involvement in biodiversity assessment should be implemented at an early stage, and sufficient time should be allowed for government, industry and other stakeholders to understand, evaluate and discuss biodiversity concerns throughout the process.

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Regulatory Update

Provisional Regulation on Disciplining Dereliction of Duty in Environmental Protection Activity -SEPA -issued date: 20030228

Notice of Further Regulating Exploration Licenses and Mining Licenses Granting/Transfer Process Management

Notice of the People’s Government of Yunnan Province on new four laws including Management Rules of Yunnan Province for Rights of Exploitation and Mining. Laws in Yunnan were released that focus on the Rights of Exploitation and Mining, Interim Procedures of Yunnan Province for Levying and Management of Fees for Compensated Use of Mineral Resources, Interim Procedures of Yunnan Province for Management of Mineral Property Transaction, and the Interim Procedures of Yunnan Province for Management of Deposit for Security for Rehabilitation and Governing of Mine Geologic Environment. For those wishing to make comment or if you would like a copy of the laws please contact Auslan at admin@austcham.org

MLR Beijing issued 2 new regulations. The CIMG was recently informed that MLR Beijing issued 2 new regulations that will come into affect on the Jan 1 2007:
1.             Notice By MLR Regarding Furthering Reform of the Exploration/Mining License Issuance
2.             Equity Method for Paying for Exploration/Mining License

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Classifieds

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NOTE: If you are interested in placing a classified-hiring, buy or sell (looking for staff, equipment, etc) please contact the Seccretariat. This service is FREE for CIMG members

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