Laws of the People's Republic of China

    Article 1  These Measures are formulated in accordance with the Mineral
Resources Law of the People's Republic of China with a view to strengthening
the administration of transfer of mineral exploration right and mining right,
protecting the lawful rights and interests of persons with mineral exploration
right and persons with mining right and promoting the development of the
mining industry.

    Article 2  These Measures must be adhered to in the transfer of mineral
exploration right and mining right obtained according to law within the
territory of the People's Republic of China and other sea areas under its
jurisdiction.

    Article 3  Mineral exploration right and mining right must not be
transferred except for those which may be transferred in accordance with
the following provisions:

    (1)a person with mineral exploration right has the right to conduct
specified exploration and survey operations within the delimited exploration
and survey operations area(s) and has the right to obtain the mineral
exploration right of mineral resources within the exploration and survey
operations areas on a priority basis. A person with mineral exploration
right may, upon fulfilment of the prescribed minimum exploration and survey
input and approval in accordance with law, transfer the mineral exploration
right to another person.

    (2)a mining enterprise having obtained the mining right may, subject to
approval in accordance with law, transfer the mining right to another person
for exploitation as a result of enterprise amalgamation, separation, engaging
in a joint venture or cooperative venture with another person, or as a result
of the sale of the enterprise assets as well as other circumstances that
change the property rights of the enterprise assets necessitating a change
in the main body of the mining right.

    Article 4  The competent department of geology and mineral resources
under the State Council and the competent departments of geology and mineral
resources of people's governments of the provinces, autonomous regions and
municipalities directly under the Central Government shall be the organs for
the administration of examination and approval of the transfer of mineral
exploration right and mining right.

    The competent department of geology and mineral resources under the
State Council shall be responsible for the examination and approval of the
transfer of mineral exploration right and mining right the examination,
approval and issuance of permits fall under its jurisdiction.

    The competent departments of geology and mineral resources of people's
governments of the provinces, autonomous regions and municipalities directly
under the Central Government shall be responsible for the examination and
approval of the transfer of mineral exploration right and mining right
other than those prescribed in the Second Paragraph of this Article.

    Article 5  Transfer of mineral exploration right shall meet the
following conditions:

    (1)expiry of 2 years from the date of issuance of an exploration and
survey permit, or discovery of mineral resources for further exploration and
survey or exploitation within the exploration and survey operations area(s);

    (2)fulfilment of the specified minimum exploration and survey input;

    (3)there is no dispute over the ownership of the mineral exploration
right;

    (4)the mineral exploration right user's fee and mineral exploration
right purchase price have already been paid pursuant to relevant state
provisions; and

    (5)other conditions prescribed by the competent department of geology
and mineral resources under the State Council.

    Article 6  Transfer of mining right shall meet the following conditions:

    (1)expiry of one year of going into mining production of a mining
enterprise;

    (2)there is no dispute over the ownership of mining right;

    (3)the mineral exploration right user's fee, mineral exploration right
purchase price, mineral resources compensation fee and resources tax have
already been paid pursuant to relevant state provisions; and

    (4)other conditions prescribed by the competent department of geology
and mineral resources under the State Council.

    A state-owned mining enterprise should, prior to the appliction for the
transfer of mining right, obtain the consent of the competent department of mining enterprises.

    Article 7  A transferee of mineral exploration right or mining right
should meet the qualifications of a mineral exploration right applicant or
mining right applicant prescribed in the Measures for Area Registration
Administration of Mineral Resources Exploration and Survey or the Measures
for the Registration Administration of Mineral Resources Exploitation.

    Article 8  A person with mineral exploration right or a person with
mining right should, in applying for the transfer of mineral exploration
right or mining right, present the following materials to the examination
and approval administration organ:

    (1)a letter of application for transfer;

    (2)the transfer contract concluded between the transferor and the
transferee;

    (3)testimonial documents of human quality of the transferee;

    (4)proof of conditions of transfer of the transferor as prescribed in
Article 5 or Article 6 of these Measures;

    (5)a report on mineral resources exploration and survey or exploitation;
and

    (6)other materials the presentation of which are required by the
examination and approval administration organ.

    A state-owned mining enterprise should, in transferring the mining right,
present the approval document of the competent department concerned on
consenting to the transfer of the mining right.

    Article 9  An evaluation must be carried out in the transfer of mineral
exploration right and mining right formed by state-contributed exploration and
survey.

    Evaluation of the transfer of mineral exploration right and mining right
shall be carried out by evaluation agencies certified by the competent
department of geology and mineral resources under the State Council in
conjunction with the department of state assets management under the State
Council; the evaluation results shall be confirmed by the competent
department of geology and mineral resources under the State Council.

    Article 10  With respect to applicants for the transfer of mineral
exploration right or mining right, the examination and approval administration
organ should, within 40 days from the date of receipt of the application for
transfer, make a decision on the approval of the trnasfer or the non-
approval of the transfer and inform the transferor and the transferee of the same.

    In case of approval of the transfer, the transferor and the transferee
should, within 60 days from the date of receipt of the transfer approval
notice, go through the formalities of registering the change at the organ
that originally issued the permit; the transferee shall, upon effecting
payment of relevant fees pursuant to state provisions, obtain an exploration
and survey permit or a mining permit and become a person with mineral
exploration right or a person with mining right.

    In case of approval of the transfer, the transfer contract shall take
effect as of the day of approval.

    In case of non-approval of the transfer, the examination and approval
administration organ should explain the reasons.

    Article 11  The examination and approval administration organ should,
upon approval of the transfer of mineral exploration right or mining right,
notify the original permit issuing authority in time.

    Article 12  The rights and obligations of a person with mineral
exploration right or a person with mining right shall be transferred
along with the transfer of the mineral exploration right or mining right.

    Article 13  The duration of validity of the exploration and survey
permit or the mining permit upon the transfer of the mineral exploration
right or mining right shall be the remaining time period of the duration of
validity of the original mineral exploration permit or mining permit minus
the year(s) during which exploration or mining has already been conducted.

    Article 14  Whoever transfers the mineral exploration right or mining
right without authorization and approval of the examination and approval
administration organ shall be ordered by the registration administration
organ to make a rectification, confisticated of the illegal gains and
imposed a fine of less than RMB 100,000 Yuan; where the circumstances are
serious, the original permit issuing authority shall revoke the exploration
and survey permit or mining permit.

    Article 15  Whoever transfers the mining right to another person for
exploitation in the form of contracting out without authorization in violation
of the provisions of Section (2) of Article 3 of these Measures shall be
ordered by the department responsible for the administration of geology and
mineral resources of people's government at or above the county level
pursuant to the terms of reference prescribed by the competent department
of geology and mineral resources under the State Council to make a
rectification, confisticated of the illegal gains and imposed a fine of less than RMB 100,000 Yuan; where the circumstances are serious, the
original permit issuing authority shall revoke the mining permit.

    Article 16  Any functionary of the examination and approval administration
organs who indulges in self-seeking misconducts, abuses power, neglects duties
that constitute a crime shall be investigated of criminal liability according
to law; where a crime has not been constituted, administrative sanctions shall
be imposed according to law.

    Article 17  Formats of the letter of application for the transfer of mineral exploration right and the letter of application for the transfer of mining right shall be uniformly determined by the competent department of geology and mineral resources under the State Council.

    Article 18  These Measures shall enter into force as of the date of promulgation.