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RULES FOR IMPLEMENTATION OF THE MINERAL RESOURCES LAW

Category  GEOLOGY, MINERAL RESOURCES AND ENERGY INDUSTRY Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1994-03-26 Effective Date  1994-03-26  

Rules for Implementation of the Mineral Resources Law of the People's Republic of China



Chapter I  General Provisions
Chapter II Registration for Mineral Exploration and Examination and
Chapter III  Mineral Exploration
Chapter IV Mineral Exploitation
Chapter V  Collectively-Owned Mining Enterprises, Privately-Run Mining
Chapter VI  Legal Liability
Chapter VII  Supplementary Provisions
Appendix: Detailed List of Mineral Resources

(Promulgated by the Decree No.152 of the State Council of the People's

Republic of China on March 26, 1994, and effective as of the date of
promulgation)
Chapter I  General Provisions

    Article 1  These Rules are formulated in accordance with the Mineral
Resources Law of the People's Republic of China.

    Article 2  The mineral resources refers to the natural resources formed
through geologic function, which are of value for utilization, and existing
under solid, liquid or gaseous states.

    The varieties of the mineral resources and its classification are listed
in the "Detailed List of Mineral Resources" attached thereunder. The competent
department in charge of the geology and the mineral resources under the State
Council shall report any discovery related to the new varieties of the mineral
resources to the State Council for approval, then make publications.

    Article 3  All mineral resources shall be owned by the state. The state
ownership of the mineral resources, either near the earth's surface or
underground, shall not change with the ownership of the land or the right to
the use of the land which the mineral resources are attached to.

    The State Council is granted to exercise the ownership of the mineral
resources on behalf of the state. The competent department in charge of
geology and mineral resources under the State Council is authorized by the
State Council to exercise a centralized management over the allocation of
mineral resources.

    Article 4  The exploration and exploitation of the mineral resources
within the territory of the People's Republic of China and other sea areas
under its jurisdiction must abide by the Mineral Resources Law of the
People's Republic of China (hereinafter referred to as the Mineral Resources
Law) and these Rules.

    Article 5  The state shall adopt a license system for the exploration and
exploitation of the mineral resources. Anyone who wants to explore the mineral
resources shall apply for registration in accordance with the law, draw the
exploration license, obtain the exploration right. Anyone who wants to exploit
the mineral resources shall apply for registration in accordance with the law,
draw the exploitation license, obtain the mining right.

    The block divided based on the longitude and latitude is the basic unit in
determining both the scope of exploration areas and the scope of
exploitation areas of the mineral resources. The specific methods shall be
formulated by the competent department in charge of geology and mineral
resources under the State Council.

    Article 6  The terms both in the Mineral Resources Law and in these Rules
are defined as follows:

    "Exploration right" means the right to explore the mineral resources
within the scope provided by the exploration license which is legally
obtained. The units or individuals that have obtained the exploration licenses
are called exploration licensees.

    "Mining right" means the right to exploit the mineral resources and own
its products within the scope provided by the exploitation license which is
legally obtained. The units or individuals that have obtained the exploitation
licenses are called concessioners.

    "The special kinds of the mineral ores under protective exploitation
prescribed by the State"  means those minerals are, in view of the need for
the construction of the national economy and high-tech development, or in view
of their scarcity and their value, specified by the State Council, and granted
to exploit by the competent departments concerned under the State Council
according to the state plans.

    "Mining areas under the state plan" means the areas where the mineral
resources are located and zoned by the state for the construction of large or
medium sized mines according to both the national construction plan and the
national mineral resources plan.

    "Mining areas with great value to the national economy" means the mineral
resources protection areas where is zoned by the state based on the need of
the national economic development but have not been listed in the national
construction plan, because the minerals there are rich in deposits, fine in
quality and with a good prospect for development.

    Article 7  The state allows foreign companies, enterprises and other
economic organizations as well as individuals to invest for exploration and
exploitation of the mineral resources within the territory of the People's
Republic of China and other sea areas under its jurisdiction pursuant to the
relevant laws and regulations of the People's Republic of China.

    Article 8  The competent department in charge of geology and mineral
resources under the State Council shall be responsible for the supervision and
administration over exploration and exploitation of the mineral resources
throughout the country. The other competent departments concerned under the
State Council shall assist the competent department in charge of geology and
mineral resources under the State Council to conduct the supervision and
administration of exploration and exploitation of mineral resources according
to their functions and powers granted by the State Council..

    The competent departments in charge of geology and mineral resources under
the people's governments of provinces, autonomous regions and the
municipalities directly under the Central Government shall be responsible for
supervision and administration over the exploration and exploitation of the
mineral resources within their respective administrative areas. The other
competent departments concerned under the people's governments of provinces,
autonomous regions and municipalities directly under the Central Government
shall assist the competent departments in charge of geology and mineral
resources at the same level to conduct the supervision and administration of
the exploration and exploitation of mineral resources.

    The municipal people's governments with administrative districts and the
people's governments of autonomous prefectures and the people's governments of
counties as well as their departments in charge of mineral resources shall be
responsible for conducting supervision and management over the state-owned
mining enterprises approved by them according to law, and shall also be
responsible for conducting supervision and administration over the
collective-owned mining enterprises, the private-owned mining enterprises,
individual miners as well as the units and individuals who undertake the
exploration within their respective administrative areas in their respective
administrative areas according to law. And they shall protect the lawful
rights and interests of the exploration licensees and the concessioners
pursuant to law.

    The competent departments in charge of geology and mineral resources at
higher levels are authorized to redress or revoke the illegal or improper
administrative behaviors over the exploration and exploitation conducted by
the competent departments in charge of geology and mineral resources at lower
levels.
Chapter II Registration for Mineral Exploration and Examination and
Approval for Mineral Exploitation

    Article 9  Exploring any mineral resources, anyone should go through the
formalities concerning the application, examination, approval and the
registration in accordance with the regulations on the exploration
registration of the mineral resources which are issued by the State Council.

    Where exploring the special kinds of mineral ores, anyone should go
through the formalities concerning the application, examination, approval and
registration which are stipulated by the State Council.

    Article 10  Where the state-owned mining enterprises exploit the mineral
resources, they shall go through the formalities concerning the application,
examination, approval and mining registration in accordance with the State
Council's regulations governing mining registration. Where they want to
exploit the mineral areas under the state plan, the mining areas with great
value to the national economy, or the special kinds of mineral ores under
protective exploitation prescribed by the state, they shall, with the approval
documents from the relevant competent departments under the State Council go
through the formalities concerning the application, examination and approval
and the mining registration.

    Where they want to exploit the special kinds of mineral ores, they shall
go through the formalities concerning application, examination and approval
and mining registration in accordance with the relevant stipulations of the
State Council.

    Article 11  The establishment of state-owned mining enterprises shall
meet the following requirements in addition to conditions prescribed by laws
and regulations:

    (1) having the mineral resources exploration report required for mine
construction;

    (2) having the feasibility study report required for mine construction
project (including the mineral resources utilization proposal and the report
on the influence on the environment within the mining areas);

    (3) having the definite scope of the mine and the mining area;

    (4) having the mine design; and

    (5) having the  technical support required for production.

    The State Council, the competent departments under the State Council and
the people's governments of provinces, autonomous regions and municipalities
directly under the Central Government shall, pursuant to the state regulations
regarding fixed assets investment and the conditions given hereinabove,
exercise examination over the application for establishment of the state-owned
mining enterprises before the approval is to be granted.

    Article 12 The application for establishing the collective-owned mining
enterprises and private mining enterprises as well as individual miners shall
go through the formalities concerning the examination, approval and the mining
registration prescribed by the relevant regulations which is issued by the
province, autonomous region and municipality directly under the Central
Government.

    Article 13 Application for establishing the collective-owned mining
enterprises or private mining enterprises shall meet the following
requirements in addition to the conditions prescribed by laws and regulations:

    (1) having the mineral resources exploration materials required for the
mine construction and which shall also be appropriate to the mining scale;

    (2) having the definite mining scope which has been approved without
dispute;

    (3) having the necessary funds, equipment and technical personnel required
appropriate to the scale of the mine to be constructed;

    (4) having the feasibility study report, mine design or mining proposal
appropriate to the mine to be constructed, also in line with the state
industrial policies and the technical regulations; and

    (5) the mine chief shall be equipped with basic knowledge regarding to the
mining production, safety control and environmental protection.

    Article 14 Where the individuals apply for mining, they shall meet the
following requirements:

    (1) holding the definite mining scope which has been approved without
dispute;

    (2) holding the necessary funds, equipment and technical personnel
required appropriate to the scale of mine to be constructed;

    (3) holding necessary mineral resources exploration materials required and
the mining proposal that has been approved; and

    (4) having the necessary conditions and proper measures required for
safety production and for environmental protection.
Chapter III  Mineral Exploration

    Article 15 The unified plan for the mineral resources exploration shall
be carried out by the state. The competent department in charge of geology and
mineral resources under the State Council shall organize and map out the
national medium and long term plans over the mineral exploration under the
guidance of the competent department in charge of planning under the State
Council, in accordance with the national medium and long term economic and
social development programs, and based on the exploration plans adopted by the
relevant competent departments in charge under the State Council.

    The national annual mineral exploration plan and the annual mineral
exploration plan of provinces, autonomous regions and municipalities directly
under the Central Government shall be made respectively by the competent
department in charge of geology and mineral resources under the State Council
and the competent departments in charge of geology and mineral resources under
the people's governments of provinces, autonomous regions and municipalities
directly under the Central Governments with other competent departments
concerned, in accordance with the national medium and long term exploration
plans. After the approval granted by the competent departments in charge of
planning under the people's governments at the same level, they shall be
carried out.

    Where laws made the authority of examination and approval upon the
exploration plan otherwise, the stipulations in the laws shall prevail.

    Article 16  The exploration licensees are granted the following rights:

    (l) conducting exploration operations in the areas, within the terms and
on the proper objects prescribed by the exploration license;

    (2) erecting power, water supply pipes and communication lines in the
exploration area and in the neighboring areas, but they shall not affect or
damage the original power, water supply facilities and the communication
lines from functioning;

    (3) passing through the exploration areas and the neighboring areas;

    (4) using the land temporarily according to the need of exploring project;

    (5) priority in obtaining the exploration right to explore the discovered
minerals within the exploration areas;

    (6) priority in obtaining the mining right to exploit the minerals within
the exploration areas;

    (7) selling the mineral products recycled during the exploration operation
in accordance with the project design that has been approved, except for those
minerals which shall be sold to the designated units only as prescribed by the
State Council.

    When exercising their rights provided hereinabove, the exploration
licensees shall abide by other laws and regulations which require them to
obtain the approval or go through the other formalities.

    Article 17  The exploration licensees shall fulfill the following
obligations:

    (l) starting the exploration operation within the time limit prescribed,
and completing the exploration within the time limit prescribed by the
exploration license;

    (2) reporting to the exploration registration authorities the situation
relating to the start of exploration, ect.;

    (3) the exploration shall be conducted in accordance with the exploration
construction designs. No arbitrary exploitation will be permitted;

    (4) conducting comprehensive exploration as well as evaluation over the
paragenetic and associated minerals while ascertaining the key minerals;

    (5) compiling the mineral exploration reports, submitting it to the
relevant departments for examination and approval;

    (6) submitting the mineral resources exploration achievement files in
accordance with the stipulations of the State Council;

    (7) complying with the relevant laws and regulations regarding labor
safety production, land recovery and environmental protection; and

    (8) taking immediate efforts upon the completion of exploration to block
the wells and holes left by the exploration or adopting other measures, to
eliminate dangerous elements.

    Article 18 The exploration licensees may exploit the complex mineral
deposits which is permitted by the state to be exploited while being explored.
But they shall submit the supporting proof documents to the original licensing
authorities, the mineral reserves examination and approval administration and
the competent departments in charge of the exploration project. After the
approval is granted, the exploitation registration shall be made in accordance
with the regulations of the State Council regarding exploitation registration.

    Article 19 The mineral exploration report shall be examined and approved
in accordance with the following procedures:

    (l) the mineral reserves examination and approval administration under the
State Council shall be responsible for the examination and approval of the key
and large-scale mineral exploration report used for mine construction and of
the underground water exploration report used for the construction of large
scale water supply bases;

    (2) the mineral reserves examination and approval administrations of
provinces, autonomous regions and municipalities directly under the Central
Government shall be responsible for the examination and approval of the
ordinary large, medium and small scale mineral deposits exploration reports
used for mine construction and of the underground water exploration report
used for the construction of medium or small sized water supply bases;

    The mineral reserves examination and approval authorities or the competent
departments concerned above the exploration units shall reply within six
months upon the receipt of the mineral exploration reports.

    Article 20 The mineral exploration reports and other exploration data
with value shall be provided for use with compensation in accordance with the
provisions made by the State Council.

    Article 21 In case of the exploration licensees, after obtaining the
temporary right to use the land, damage the properties of other people during
the exploration, they shall make compensations according to the following
stipulations:

    (l) compensation for damages caused to the arable land shall be made on
the annual basis according to the average yield of the land in the past three
years, and to be calculated according to the local market average price, to be
paid annually. They shall also be responsible for the recovery of the arable
land and return the land in due course;

    (2) compensation for damages caused to the grass land shall be made in
accordance with the stipulations of the above clause and shall be paid in
annual basis. They shall also be responsible for recovery of the grassland
vegetation and return them in due course;

    (3) compensation for damages caused to the agricultural or economic crops
on the cultivated land shall be made according to the average yield of the
land damaged in the past three years, and shall be calculated according to the
local market average price at the time of compensation;

    (4) compensation for damages caused to bamboo or trees shall be made
according to the actual numbers of bamboo and trees damaged. And the amount
of compensation shall be calculated on a number basis according to the local
market average price;

    (5) compensation for damages caused to the fixtures on the land shall be
made according to the actual damages degree and shall be calculated according
to the local market price.

    Article 22  No compensation shall be made when the exploration licensees
conducting exploration on the waste mountain slopes, hillsides, wasteland,
abandoned desert, or on the sand, river, lake or sea beaches where there are
no agricultural crops or other fixtures attached. However, the exploration
shall neither impede the navigation, irrigation or flood control activities
nor shall it cause any damages to such facilities. Meanwhile, necessary
measures shall be taken upon the completion of the exploration for preventing
the loss of water and erosion of soil and for ecological environmental
protection.

    Article 23  Disputes among exploration licensees with regard to the scope
of exploration areas shall be settled through consultation by the parties
involved; in case of no settlement can be reached through consultation, the
competent departments concerned in charge of geology and mineral resources
under the people's governments of provinces, autonomous regions and
municipalities directly under the Central Government of the places where the
exploration areas located, shall be responsible for adjudicating. For
disputes involving more than one province, autonomous region and municipality
directly under the Central Government relating to the scope of exploration
areas, if the settlement can not be reached through consultation, the people's
governments of the relevant  provinces, autonomous regions and municipalities
directly under the Central Government shall be responsible to make settlement
through consultation. If the settlement still not be reached, the competent
department in charge of geology and mineral resources under the State Council
shall be responsible for adjudicating. For disputes relating the exploration
areas of special kinds of mineral ores, if no settlement can be reached
through consultation by the parties concerned, the relevant competent
departments authorized by the State Council shall be responsible for
adjudicating.
Chapter IV Mineral Exploitation

    Article 24  The national allocation and development and utilization of the
mineral resources shall be conducted in consideration of the interests of the
long term and the present, and of both the Central Government and the
localities, and shall be carried out by unified plan, sufficient protection,
rational exploitation and comprehensive utilization.

    Article 25 The competent department in charge of geology and mineral
resources under the State Council shall be responsible for organizing the
relevant competent departments under the State Council and the people's
governments of provinces, autonomous regions and municipalities directly under
the Central Government to map out the national mineral resources plan, under
the guidance of competent department in charge of planning under the State
Council, and based on the mid and long term national economic and social
development programs. The plan shall be carried out after the approval from
the State council has been granted.

    The national mineral resources plan shall make an overall arrangement on
the allocations of the national mineral resources, and shall delineate a
rational scope for the examination and approval and development to the mineral
resources granted by the Central Government and by the people's governments of
provinces, autonomous regions and municipalities directly under the Central
Government.

    Article 26 The mineral resources development plan shall be the overall
plan regarding the development and construction of the mine areas.

    The mineral resources development plan shall consist of the industrial
development plan and the regional development plan.

    The industrial development plans of the mineral resources shall be made
and implemented in accordance with the allocation of the mineral resources
given to the respective departments by the national mineral resources plan.

    The regional mineral resources development plans shall be made by the
people's governments of provinces, autonomous regions and municipalities
directly under the Central Government in accordance with the allocation of
mineral resources given to the respective provinces, autonomous regions and
municipalities directly under the Central Government by the national mineral
resources plan; the regional plans shall also give an overall arrangement,
and shall delineate a rational scope within which the people's governments at
levels of provinces, municipalities and counties are entitled to make the
examination and approval over the mineral resources development.

    The industrial development plans and regional development plans of the
mineral resources shall be submitted to both the competent departments in
charge of planning and geology and mineral resources under the State Council
for records.

    Both the competent departments in charge of planning and geology and
mineral resources under the State Council are authorized to redress the
industrial or regional development plans that is not fit into the national
mineral resources plan.

    Article 27 The establishment, changes or revocation regarding the mines
under the state plan or the mines with great value to the national economy
shall be brought up by the relevant competent departments under the State
Council attached with the reports of detailed reports and other supporting
proof materials. Both the competent departments in charge of planning and
geology and mineral resources under the State Council shall be responsible for
conducting examination and approval, and jointly issue the notice in written
form to the people's governments at the county level. The people's governments
at county level shall make a public announcement within one month upon receipt
of the notice and shall submit it to both the competent departments in charge
of planning and geology and mineral resources under the State Council for
records.

    Article 28 The confirmation or revocation of the special minerals under
protective exploitation prescribed by the state shall be brought up by the
relevant competent departments under the State Council, attached with
supporting proof documents, submitted to the State Council for approval after
the permission is granted by both the competent departments in charge of
planning and geology and mineral resources upon the examination.

    Article 29  Before the exploitation of the mineral resources, the units or
individuals shall entrust the units that hold the relevant mine design
certificates to conduct the feasibility study and designing. No feasibility
study and design are required for mining the scattered minerals or for mining
sand, rocks and clay that can only be used as building materials, but the
mining proposals and the environmental protection measures are required.

    The mine design shall be made in accordance with the mine design
assignment instruction and shall adopt rational mining sequence, mining method
and ore-dressing technology.

    The mine design shall be examined and approved in accordance with the
relevant provisions of the state; No construction shall be permitted without
the approval.

    Article 30 Any concessioners are granted the following rights:

    (l) conducting the mining activities within the term and the exploitation
area prescribed by the mining license;

    (2) selling the mineral products by themselves, except for those minerals
which the State Council has prescribed for a unified purchase by the
designated units only;

    (3) constructing within the mine area the production and living facilities;

    (4) obtaining in accordance with law the right to use the land required for
the production; and

    (5) other rights granted by laws and regulations.

    Article 31 The concessioners shall fulfill the following obligations:

    (l) conducting mine construction or mining within the term approved;

    (2) conducting efficient protection, rational mining and comprehensive
utilization of the mineral resources;

    (3) paying the resources tax and the mineral resources compensation
pursuant to law;

    (4) complying with the state laws and regulations regarding the labor
safety, water and soil conservancy, land recovery and environmental
protection; and

    (5) accepting the supervision and management from both the competent
departments in charge of geology and mineral resources and the other relevant
competent departments, and filling out and presenting the mineral reserve
forms and mineral resources development and utilization statistics reports
according to the relevant stipulations.

    Article 32  Where the concessioners close down the mines either at the
expiration of the exploitation license or within the term of validity, while
mineral resources is still remain there, they shall take measures to maintain
the mines in the state under which mining can be resumed. Also they shall
complete in advance the following work:

    (1) compiling the mine exploitation progress report and the actual survey
charts;

    (2) making a statement on the reserves that has been exhausted pursuant to
the relevant stipulations;

    (3) completing the respective actual work in accordance with the original
design regarding labor safety for production, water and soil conservancy, land
recovery and environmental protection, or paying in full the cost for the land
recovery or the environmental protection.

    The concessioners' application on closing down of the mines shall be
approved by the competent departments in charge which originally approved the
setting up of the mine and shall also be given permission by the original
mining licensing authorities before revocation of the relevant license.

    Article 33 The mining enterprises shall go through the following
procedures regarding the examination and approval in case of a need to close
down a mine:

    (l) submitting the application on closing down of mine to the competent
departments which originally approved for setting up the mine, and submitting
the geological report on closing down of pits, one year prior to the
completion of exploitation;

    (2) the geological report on closing down of pits shall be examined and
permitted by the competent departments  which originally approved the setting
up of the mine, and shall be submitted to the competent departments in charge
of geology and mineral resources and mineral reserves administration for
approval; and

    (3) after the geological report on closing down of pits being approved, the
concessioners shall compile report on closing down of mines which shall be
approved jointly by the competent departments which originally approved the
setting up of mines and the competent departments in charge of geology and
mineral resources at the same level and the relevant competent departments in
accordance with the relevant industrial stipulations.

    Article 34  After the report on closing down of pits being approved, the
mining enterprises shall complete the following works:

    (1) classifying and filing up the geological, surveying and mining
documents, and presenting the report on closing down of pits, the report on
closing down of mines and other relevant materials;

    (2) finalizing the works regarding labor safety, water and soil
conservancy, land recovery and environmental protection or paying in full the
cost for the land recovery and environmental protection in accordance with the
report on closing down of mines approved.

    The mining enterprises, with the approval documents on the closing down of
mines and the proof documents supplied by the relevant departments for proving
the completion of above work, apply to the original licensing authorities for
the revocation of the mining license.

    Article 35  Before the construction of railways, roads, factories,
reservoirs, oil pipelines, electricity transmission lines and various large
buildings, any construction units shall seek data about the distribution of
the mineral resources in the place where the proposed building project located
from the competent departments in charge of geology and mineral resources
under the people's governments of provinces, autonomous regions and the
municipalities directly under the Central Government that is located in the
particular area, and shall attach proof documents issued by the department in
charge of geology and mineral resources while presenting the construction
designing assignment instruction for examination and approval. In case the
above mentioned construction project contradicts to the exploitation of key
mineral deposits, the competent departments under the State Council or the
people's governments of the relevant provinces, autonomous regions and
municipalities directly under the Central Government shall be responsible for
proposing a settlement upon which the competent department in charge of
geology and mineral resources shall make comment. The proposed settlement
shall be submitted to the competent department in charge of planning under the
State Council for approval.

    Article 36  Disputes among the concessioners over the scope of mine areas
shall be settled through consultation among the parties involved; if the
consultation fails, the disputes shall be handled by the relevant people's
governments at or above the county level of the place where the mineral
resources is located in accordance with the scope of the mine areas designated
according to law; Disputes over the scope of mine areas involving more than
one province, autonomous region or municipality directly under the Central
government shall, if the parties involved fail to reach the settlement through
consultation, be settled through consultation among the people's governments
of the relevant province, autonomous region and municipality directly under
the Central Government; if the consultation fails, the department in charge of
geology and mineral resources under the State Council shall put forward a
suggestion for settlement, and then submit it to the State Council for
decision.
Chapter V  Collectively-Owned Mining Enterprises, Privately-Run Mining
Enterprises and Individual Miner

    Article 37  The state shall protect the lawful rights and interests of
the collectively-owned mining enterprises, privately-run mining enterprises
and individual miner pursuant to law, exercise supervision and management
over the collectively-owned mining enterprises, privately-run mining
enterprises and individual miner.

    Article 38 Collectively-owned mining enterprises are permitted to
exploit the following mineral resources:

    (1) mineral deposits and mineral spots unfit for large or medium sized
mines to be constructed by the state;

    (2) the designated scattered minerals within the mine areas of the
state-owned mining enterprises by obtaining the consent from the state-owned
mining enterprises and the approval from the competent department in charge
at higher level;

    (3) the remaining ore bodies in the already closed mines by obtaining the
approval from the original department in charge of the mining enterprise that
the resumption of mining is safe and will not result in serious environmental
consequences;

    (4) other mineral resources allowed to be exploited by the
collectively-owned mining enterprises pursuant to the state plan.

    Before engaging in the exploitation of the mineral resources listed
hereinabove in clause 2 of this Article, the collectively-owned mining
enterprises shall sign the agreement with the state-owned mining enterprises
regarding the rational development and utilization of mineral resources and
mine safety. No waste or damages of mineral resources will be allowed. No
influence upon the safety production of the state-owned mining enterprises
will be allowed.

    Article 39  The scope of mineral resources to be exploited by the
privately-run mining enterprises shall be decided in reference to the
provisions in Article 38.

    Article 40 The individual miners are permitted to tap the following
mineral resources:

    (1) scattered mineral spots or small ore body;

    (2) sands, rocks or clay that can only be used as building materials.

    Article 41  In case that the state sets up the mining areas under the
state plan and the mining areas which are of great value to the national
economy, the state shall give rational compensation pursuant to the relevant
provisions to the original exploitation licensees who are supposed to retreat.
Chapter VI  Legal Liability

    Article 42 The fine penalties imposed in accordance with the provisions
in Article 39, 40, 42, 43 and 44 of the Mineral Resources Law shall be
implemented according to the following stipulations:

    (l) anyone who mines without a mining license, enters without
authorization and mines in mining areas that the state has planned to
develop, in mining areas which are of great value to the national economy, or
in other's mining areas, or exploits special kinds of minerals that the state
has prescribed for protective exploitation, shall be imposed a fine of or
below 50% of the value of the illegal proceeds;

    (2) anyone who mines beyond the approved limits of his mining areas shall
be imposed a fine of or below 30% of value of the illegal proceeds;

    (3) anyone who sells, leases or transfers mineral resources by other
means, the party that sells, leases or transfers shall be imposed a fine of
or below 100% of the value of the illegal proceeds;

    (4) anyone who puts his mining right in pledge shall be imposed a fine of
or below 5000 RMB Yuan;

    (5) anyone who, in violation of the provisions, purchases or sells mineral
products which are to be purchased exclusively by state, shall be imposed a
fine of or below 100% of the value of the illegal proceeds;

    (6) anyone who exploits mineral resources in a destructive way and causes
heavy damage to mineral resources shall be imposed a fine of or below 50% the
value of the mineral resources damaged.

    Article 43 Anyone who, in violation of these Detailed Rules, conduits one
of the following behaviors, the personnel in charge and the directly
responsible personnel shall be imposed the administrative sanctions, if the
case is serious as to constitute a crime, he shall be held for criminal
responsibility according to law:

    (1) approving the unqualified units or individuals to start the
establishment of mines;

    (2) issuing mining licenses to the mining enterprises or individual
miners who are not approved according to law.
Chapter VII  Supplementary Provisions

    Article 44  The underground water is of both water resources and mineral
resources nature. The Mineral Resources Law and these Detailed Rules shall
apply to the exploration of underground water; The Water Law and the
relevant administrative regulations shall apply to the development,
utilization, protection and management of water resources.

    Article 45  The Ministry of Geology and Mineral Resources shall be
responsible for the interpretation of these Detailed Rules.

    Article 46  These Detailed Rules shall be implemented as from the date of
promulgation.

 Appendix: Detailed List of Mineral Resources

    (1) Mineral Energy Resources:
Coal, coal-related gas, stone coal, oil shale, petroleum, natural gas,
oil sand, natural bitumen, uranium, thorium, geothermal resources.

    (2) Metallic Minerals:
Iron, manganese, chromium, vanadium, titanium, copper, lead,
zinc, bauxite, nickel, cobalt, tungsten, tin, bismuth,
molybdenum, mercury, antimony, magnesium, platinum, palladium,
ruthenium, osmium, iridium, rhodium, gold, silver, niobium,
tantalum, beryllium, lithium, zirconium, strontium, rubidium,
cesium, lanthanum, cerium, praseodymium, neodymium, samarium,
europium, yttrium, gadolinium, terbium, dysprosium, holmium,
erbium, thulium, ytterbium, lutetium, scandium, germanium,
gallium, indium, thallium, hafnium, rhenium, cadmium, selenium,
tellurium.

    (3) Non-Metallic Minerals:
Diamond, graphite, phosphorous, natural sulphur, pyrite, sylvite,
boron, crystal (piezoelectric crystal, smelting crystal, optical
crystal, craft crystal), corundum, kyanite, sillimanite, andalusite,
tabular spar, nitratite, talc, asbestos, crocidolite, mica, feldspar,
garnet, pyrophyllite, diopside, tremolite, vermiculite, zeolite,
alumstone, mirabilite (including glauberite), gypsum (including
anhydrite), barite, witherite, natural soda, calcite, Iceland spar,
magnesite, fluorite (including common fluorite and optical fluorite),
gemstone, topaz, jade, tourmaline, agate, mineral pigments (ochre,
pigment loess), limestone (for use in calcium carbide, manufactured
soda, fertilizers, flux, glass, cement, construction stone, mortar,
and facings), marl, white chalk, potassium, dolomite (for use in
metallurgy, fertilizers, glass, and construction), quartz (for use in
metallurgy, glass, and fertilizer), 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 (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, rectorine 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 in 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,
construction, cement, and glass), slate (for use as facing and cement
ingredient), gneiss, keraphyllite, peat, halite (including lake salt, rock
salt, and natural brine), magnesium salts, iodine, bromine, and arsenic.

    (4) Aqueous and Gaseous Resources:
Subterranean water, mineral water, carbon dioxide, hydrogen
sulfide, helium, and radon.


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