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DECISION OF THE STATE COUNCIL ON REVISING THE PROVISIONS ON THE ADMINISTRATION OF COLLECTION OF THE MINERAL RESOURCES COMPENSATION

Category  GEOLOGY, MINERAL RESOURCES AND ENERGY INDUSTRY Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1997-07-03 Effective Date  1997-07-03  

Decision of the State Council on Revising the Provisions on the Administration of Collection of the Mineral Resources Compensation




APPENDIX: PROVISIONS ON THE ADMINISTRATION OF COLLECTION OF THE MINERAL
Appendix:  Table for Rates of Mineral Resources Compensation

(Promulgated by Decree No. 222 of the State Council of the People's

Republic of China on July 3, 1997, and effective as of the same date)

    The State Council has decided to amend the first paragraph of Article 10
of the Provisions on the Administration of Collection of the Mineral Resources
Compensation as follows: "The mineral resources compensation collected shall
be timely and fully turned over to the respective treasuries according to the
distribution ratio between the Central Government and the provinces,
autonomous regions or municipalities directly under the central government set
forth in the following paragraph, and shall not be settled again at the end of
the year."

    This Decision shall come into effect on the date of promulgation.

    Appendix: The former provisions of the first paragraph of Article 10 of
the Provisions on the Administration of Collection of the Mineral Resources
Compensation before amended

    "The mineral resources compensation collected shall be timely and fully
turned over to the Central Treasury on the spot, and be separately settled at
the end of the year according to the distribution ratio between the Central
Government and the provinces, autonomous regions or municipalities directly
under the central government set forth in the following paragraph."

APPENDIX: PROVISIONS ON THE ADMINISTRATION OF COLLECTION OF THE MINERAL
RESOURCES COMPENSATION (1997 revision) (Promulgated by Decree No. 150 of the
State Council of the People's Republic of China on February 27, 1994, and
revised on July 3, 1997)

    Article 1  These Provisions are formulated, in accordance with the
relevant stipulations of the Mineral Resources Law of the People's Republic
of China, in order to ensure and promote the exploration, protection and
rational development of mineral resources, and to safeguard the property
rights to and interests of the state to mineral resources.

    Article 2  The mineral resources compensation shall be paid, in
accordance with these Provisions, for mining mineral resources within the
territory of the People's Republic of China and the sea areas under the
jurisdiction. Where laws or other administrative regulations provide
otherwise, their stipulations shall apply.

    Article 3  The mineral resources compensation shall be computed and
collected at a certain ratio of the sales income of mineral products. The
mineral resources compensation paid by the enterprises shall be included in
the administration fees.

    For any concessioners holding the mining licenses that process mineral
products by themselves, their sales income shall be calculated according to
state prices; where the state does not fix the prices, their sales income
shall be calculated according to the average prices of the mineral products
on the local markets at the time of collection.

    For concessioners that sell mineral products out of the territory, their
sales income shall be calculated according to the prevailing sales prices on
the international markets.

    The term "mineral products" mentioned in these Provisions shall refer to
those products extracted or mined and separated from mineral resources which,
having been mined or separated, are no longer in their natural state.

    Article 4  The mineral resources compensation shall be paid by
concessioners.

    The mineral resources compensation shall be settled in the currency used
in the sales of mineral products; where the mineral products are processed by
concessioners themselves, the settlement shall be made in the currency used
in sales of the end products.

    Article 5  The mineral resources compensation shall be calculated in
accordance with the following formulas:

    amount of the mineral resources compensation to be collected = sales
income of mineral products x compensation rate x coefficient of mining
recovery rate

    Where,

    coefficient of mining recovery rate  =

              approved mining recovery rate

             ________________________________

              actual mining recovery rate

    

    The approved mining recovery rate shall be the rate prescribed in the
mine design that has been approved in accordance with the relevant provisions
of the state. With regard to those mining enterprises that, according to the
relevant provisions of the state, are not required to prepare the mine design
in addition to the mining plan, the mining recovery rate shall be determined
by the administrative departments in charge of geology and mineral resources
under the local people's governments at or above the county level together
with other relevant departments at the same level.

    For those minerals whose mineral resources compensation cannot be
calculated in the formulas provided for in paragraphs 1 and 2 hereof, the
competent department in charge of geology and mineral resources under the
State Council shall make other calculation formulas together with the
department of finance under the State Council separately.

    Article 6  The mineral resources compensation shall be collected at the
rates prescribed in the appendix of these Provisions.

    Any adjustment to the rates of the mineral resources compensation shall
be jointly determined by the department of finance under the State Council,
the competent department in charge of geology and mineral resources under the
State Council and the competent department in charge of planning under the
State Council, and submitted to the State Council for approval and
implementation.

    Article 7  The mineral resources compensation shall be collected by the
competent departments in charge of geology and mineral resources together
with the departments of finance.

    Where a mining district is within a county-level administrative region,
the administrative department in charge of geology and mineral resources
under the people's government at the county level of the place where the
mining district is located shall be responsible for collecting the mineral
resources compensation.

    Where a mining district extends across more than one administrative
region at or above the county level, the administrative department in charge
of geology and mineral resources under the people's government at the next
higher level of all the administrative regions involved shall be responsible
for collecting the mineral resources compensation.

    Where a mining district extends across more than one provincial
administrative region, or is within the territorial seas of the People's
Republic of China or other sea areas under its jurisdiction, the competent
department in charge of geology and mineral resources under the provincial
people's governments authorized by the competent department in charge of
geology and mineral resources under the State Council shall be responsible
for collecting the mineral resources compensation.

    Article 8  Concessioners shall pay the mineral resources compensation for
the first half of each year on or before July 31 of the year, and pay the
mineral resources compensation for the second half of the year on or before
January 31 of the following year.

    Concessioners shall, when their mining activities are suspended or
terminated, settle and pay their mineral resources compensation.

    Article 9  Concessioners shall, at the time of paying their mineral
resources compensation, submit at the same time the data as to the mineral,
the output, the sales volume, the sales price, the actual mining recovery
rate and others of their mineral products mined.

    Article 10  The mineral resources compensation collected shall be timely
and fully turned over to the respective treasures according to the
distribution ratio between the Central Government and the provinces,
autonomous regions or municipalities directly under the central government set
forth in the following paragraph, and shall not be settled again at the end of
the year.

    The distribution ratio of the mineral resources compensation between the
central government and the provinces or municipalities directly under the
central government shall be 5:5; and that between the central government and
autonomous regions shall be 4:6.

    Article 11  The mineral resources compensation shall be included in the
state budget, conducted the specific management and mainly used for mineral
resources exploration.

    The department of finance under the State Council, the competent
department in charge of geology and mineral resources under the State Council
and the competent department in charge of planning under the State Council
shall be jointly responsible for formulating the specific measures for the
use and management of the mineral resources compensation received by the
central government.

    The people's government of a province, autonomous region or municipality
directly under the central government shall be responsible for formulating
the specific measures for the use and management of the mineral resources
compensation received by the localities.

    Article 12  Concessioners may be exempted from the mineral resources
compensation, upon joint approval of the competent department in charge of
geology and mineral resources under the provincial government and the
department of finance at the same level, under any one of the following
circumstances:

    (1) where mineral products are recovered from barren rock (waste rock);

    (2) where non-security left-over ore bodies of closed mines are mined
upon approval pursuant to the relevant provisions of the state; and

    (3) other circumstances where the exemption from the mineral resources
compensation are determined by the competent department in charge of geology
and mineral resources under the State Council together with the department of
finance under the State Council.

    Article 13  The mineral resources compensation may be reduced, upon joint
approval of the competent department in charge of geology and mineral
resources under the provincial people's government and the department of
finance at the same level, for concessioners under the following
circumstances:

    (1) where the mineral products are recovered from tailings;

    (2) where the low grade mineral resources that are below the industrial
grade or whose reserves have not been calculated are mined;

    (3) where the mineral resources under waters, buildings, or vital
communication lines are mined in accordance with the law;

    (4) where policy losses are incurred as a result of carrying out the
state fixed prices; and

    (5) other circumstances where the reduction of the mineral resources
compensation are determined by the competent department in charge of geology
and mineral resources under the State Council together with the department of
finance under the State Council.

    Approval from the provincial people's government shall be required if the
mineral resources compensation to be reduced for a concessioner exceeds 50%
of the amount of the mineral resources compensation payable.

    Any reduction approval of the mineral resources compensation shall be
reported to both the competent department in charge of geology and mineral
resources under the State Council and the department of finance under the
State Council for record.

    Article 14  In case any concessioner fails to pay the mineral resources
compensation in full within the prescribed time limit, the collecting
authorities shall, in addition to setting a dead line for the payment, impose
an overdue fine of 0.2% per day on the amount in arrears, counting from the
day on which the payment becomes overdue.

    In case any concessioner fails to pay the mineral resources compensation
fees and the overdue fine in accordance with the provisions of the preceding
paragraph, the collecting authorities shall impose penalty of up to three
times the amount of the compensation payable. If the case is serious, the
concessioner's mining license shall be revoked by the original licensing
authorities.

    Article 15  In case any concessioners do not pay or underpay the mineral
resources compensation by means of misrepresenting the minerals, concealing
the output, sales volume, or misrepresenting the selling prices or actual
mining recovery rate, the collecting authorities shall pursue the payment
of the compensation payable, and impose a penalty of up to five times the
amount of the compensation payable; if the case is serious, the
concessioner's mining license shall be revoked by the original licensing
authorities.

    Article 16  In case any concessioner fails to submit the relevant data
pursuant to the provisions of Article 9 of these Provisions, the collecting
authorities shall set a deadline for submission; in case of failure to
submit within the prescribed time limit, a fine up to 5,000 yuan shall be
imposed; and in case the concessioner still fails to submit the data, its
mining license may be revoked by the original licensing authorities.

    Article 17  The penalties imposed on and overdue fines paid by
concessioners in accordance with these Provisions shall be turned over to
the State Treasury.

    Article 18  If a party concerned is not satisfied with the decision on
administrative penalties, the party may, within 15 days from the date of
receipt of the notification on the administrative penalties, apply for
reconsideration to the authorities at the next higher level than that which
made the decision on the administrative penalties; the party may also
directly institute legal proceedings in the people's court within 15 days
from the date of receipt of the notification on the penalties.

    In the event of the party concerned failing both to apply for
reconsideration or initiate legal proceedings with a people's court and to
comply with the penalty decision within the specified period, the authorities
which made the decision on the penalties may apply to the people's court for
enforcement.

    Article 19  Where the contents of any local regulations, rules or
administrative documents promulgated by local people's governments before the
promulgation of these Provisions are in conflict with these Provisions, these
Provisions shall prevail.

    Article 20  The people's governments of provinces, autonomous regions and
municipalities directly under the central government may, in accordance with
these Provisions, formulate measures for the implementation of these
Provisions.

    Article 21  The Ministry of Geology and Mineral Resources shall be
responsible for the interpretation of these Provisions.

    Article 22  These Provisions shall enter into force on April 1, 1994.

Appendix:  Table for Rates of Mineral Resources Compensation


_____________________________________________________________________________
Minerals                                                           Rate ( % )
_____________________________________________________________________________
petroleum                                                             1      
_____________________________________________________________________________
natural gas                                                           1
_____________________________________________________________________________
coal, coal-related gas                                                1
_____________________________________________________________________________
uranium, thorium                                                      3
_____________________________________________________________________________
stone coal, oil sand                                                  1
_____________________________________________________________________________
natural bitumen                                                       2
_____________________________________________________________________________
geothermal resources                                                  3
_____________________________________________________________________________
oil shale                                                             2
_____________________________________________________________________________
iron, manganese, chromium, vanadium, titanium                         2
_____________________________________________________________________________
copper, lead, zinc, bauxite, nickel, cobalt,
tungsten, tin, bismuth, molybdenum, mercury,                          2
antimony, magnesium
______________________________________________________________________________
gold, silver, platinum, palladium, ruthenium,
osmium, iridium, rhodium                                              4
_____________________________________________________________________________
niobium, tantalum, beryllium, lithium, zirconium,
strontium, rubidium, cesium                                           3
_____________________________________________________________________________
lanthanum, cerium, praseodymium, neodymium,
samarium, europium, yttrium, gadolinium, terbium                      3
dysprosium, holmium, erbium, thulium, ytterbium                    
lutetium
_____________________________________________________________________________
ion-type rare earths                                                  4
_____________________________________________________________________________
scandium, germanium, gallium, indium, thallium,
hafnium, rhenium, cadmium, selenium, tellurium,                       3
_____________________________________________________________________________
gemstone, jade, gem diamond                                           4
_____________________________________________________________________________
graphite, phosphorus, natural sulphur, pyrite,
sylvite, boron, crystal (piezoelectric crystal,
smelting crystal, optical crystal, craft crystal),
corundum, kyanite, sillimanite, andalusite,                           2
tabular spar, nitratite, talc, asbestos, crocidolite,
mica, feldspar, garnet, pyrophyllite, diopside,
tremolite, vermiculite, zeolite, alumstone,
mirabilite (including glauberite)
_____________________________________________________________________________
diamond, gypsum, anhydrite, barite, witherite,
natural alkali, calcite, Iceland spar, magnesite,
fluorite (including common fluorite and optical
fluorite), topaz, tourmaline, agate, mineral
pigments (ochre, pigment loess), limestone (for
use in calcium carbide, manufactured soda,
fertilizers, flux, glass, cement, construction
stone, mortar, and facing), marl, chalk, rock
containing potassium, dolomite (for use in
metallurgy, fertilizers, glass, and construction),
quartz (for use in metallurgy, glass, and
fertilizers), sandstone (for use in metallurgy,
glass, or as cement ingredient, or for use in brick,
fertilizers, casting molds, and ceramics), natural
quartz sand (for use in glass, casting molds,
construction, or as cement ingredient or standard sand
in cement, or for use in bricks), vein quartz (for use
in metallurgy and glass), powdered quartz, natural
oilstone, potassium-bearing shale, diatomite, shale                   2
(including ceramsite shale, shale used for bricks,
and shale used as cement ingredient), kaolin, ceramic
clay, refractory clay, clay for convexo-concave rod,
sepiolite clay, illite clay, rectorite clay, bentonite,
iron alum, miscellaneous clays (including clay for use
in casting molds, brick, and ceramsite, clay used as
cement ingredient, red clay used as cement ingredient,
yellow clay used as cement ingredient, mudstone used
as cement ingredient, and insulating clays), peridotite
(for use in fertilizers and construction), serpentine
(for use in fertilizers, flux, and facings), basalt
(for use in stone casting and asbestos), diabase (for
use in cement, stone casting, facings, and
construction), andesite (including andesite for use
in facings, andesite for use in construction, and
andesite porphyrite for use in cement mixers), diorite
(for use in cement mixers and construction), granite
(for use in construction and facings), medical stone,
perlite, obsidian, pitch stone, pumice stone, trachyte
(for use in cement and stone casting), nepheline syenite,
tuff (for use in glass, cement, and construction),
volcanic ash, volcanic slag, marble (for use as facing,
and construction, cement, and glass), slate (for use as
facing and cement ingredient), gneiss, amphibole,
peat, magnesium salt, iodine, bromium, arsenium
_____________________________________________________________________________
lake salt, rock salt, natural brine                                   0.5
_____________________________________________________________________________
carbon dioxide, hydrogen sulphide, helium, radon,                     3
_____________________________________________________________________________
mineral spring water                                                  4
______________________________________________________________________________
groundwater                                                 The rate and  

                                                             measures for

                                                             collection

                                                             administration

                                                             will be

                                                             formulated  

                                                             elsewhere by

                                                             the State Council
______________________________________________________________________________





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