“The regulation on FDI Mining and Exploration Enterprises” has been issued by Ministry of Commerce and Ministry of Land and Resources the other day and shall officially enter into force on August 20, 2008.

According to the regulation, the state encourages FDI enterprises with mining exploration experience and financing capacity to invest on the mining exploration; encourages FDI enterprises to utilize high and innovative technologies in mining exploration and play an active role for sustainable development in the mining. The commerce departments and Land & Resources departments at various levels shall supervise and manage the business operations of FDI mining exploration enterprises.

The regulation clearly prescribes the qualifications and process for FDI mining exploration enterprises to apply the exploration license. The regulation also clearly prescribes the measures for determining the principal qualification, distributing the benefits and regulating the business operations in Chinese-foreign cooperatively-run. The regulation defines the conditions and range of business operations for FDI mining exploration enterprises. In addition, the regulation clearly defines the laws on listing overseas, transferring the exploration license and obtaining the mining license.

According to the regulation, if the state-owned investment enterprises utilize the exploration license of the subordinate enterprises to invest and cooperate, the state-owned enterprises shall provide the agreement letter with stamped signature of the person in charge. And if the state-owned enterprises invest and cooperate with its own exploration license, the state-owned mining exploration enterprises shall submit the agreement documents from the superior administrative departments for transferring the license.

According to the rules in Management Measure, foreign invested companies dealing with geological exploration can only carry out the activities of geological surveys on the condition that they have applied for and received the certificates of aptitude for geological exploration. They are supposed to report the following situations in writing to the accrediting institutions in march of each year: (1) the state of task of exploration (at the same time put on record for the accrediting institutions which examine and endorse the exploration) ;(2) submit the detailed information before handing out the tax (3) environmental protection (4) utilization of earth;(5) the test for joined foreign invested corporations each year. The foreign invested companies for minerals’ survey should follow the relevant rules in China, that is to say, they are only permitted to do the exploration and selling business in the area confined for foreigners.

It is present in Management Measure that foreign investors have to put on record in writing form to the Ministry of Commerce and Ministry of Land and Resources about their putting on the abroad market of the achievements of minerals’ survey done in china.

In Management Measure, it clarifies that the foreign invested companies for geological survey not only have to go to the management department in Ministry of land and Recourses to go through the procedures for examination and endorsement but also be obliged to put on record to Ministry of Commerce if they wanted to transfer the right of prospecting. If the foreign invested companies for minerals’ exploration spotted the potential minerals available to be explored, the sorts of which conform to the requirements on guiding list of Industry for foreign invested companies, they are permitted to explore the minerals on their own. Yet they have to go through the official procedures and apply for the exploration permit strictly by law according to the relevant rules of China and change the scope of business under the requirements of original institutions for examination and endorsement, they can go to Industry and Commerce Administration to apply for the register of transferring business after they got the permission for the first two ministries.

The regulation also provides that FDI investors can set up FDI mining exploration enterprises to engage in mining operation, transfer the exploration license or apply for the mining license directly according to law.