China to Reform Mining Policy to Attract Foreign Funds

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Last updated at: (Beijing Time) Monday, October 21, 2002

China to Reform Mining Policy to Attract Foreign Funds

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Foreign companies should be optimistic about the Chinese mining industry as the sector improves its investment environment and sincerely moves to protect investors' interests, Land and Resources Vice-Minister Shou Jiahua reiterated Sunday.

"We are marching steadily towards a fairer and more transparent investment environment despite slow progress in some aspects," she said.

Major factors that used to turn foreign investors away from the Chinese mining industry - a lack of necessary legal guidelines, limits on geological data and a lack of an effective market mechanism allowing the transaction of mining rights - have been overcome, Shou said.

Shou said attracting more foreign funds to the mining industry is a pressing task before it can be upgraded, allowing for the discovery of more minerals, and she pledged unremitting efforts to further improve the investment environment.

Most of all, the ministry will push the operation of mining-related investment in China to join the rest of the world.

"The ministry is willing to protect the interests of foreign investors in mining on related international norms," Shou said.

The much-complained Chinese stipulation of giving "priority" in mining developments to exploration groups is expected to be revoked in the near future.

International practice just allows the company discovering a new mineral deposit to mine and market the area. China's "priority" wording leaves an impression that companies are not assured of the right of follow-up exploitation and marketing.

Shou revealed that the issue will top the coming revision agenda of China's mining law at the Standing Committee of the National People's Congress.

"Although the 'priority' has in most cases guaranteed the profits of companies through exploitation and marketing, it is better to give the exploitation right directly to the companies," she said.

Also being considered for reform are rules that will help solve problems between local authorities and mine management, in addition to streamlining approval procedures for the establishment of joint venture mining enterprises.

The latter may use the experiences gained from a pilot programme in Southwest China's Yunnan Province, where the provincial government was authorized to decide the qualification of applicants.

It is a faster process in comparison to the normal two-tier practice involving the provincial and central governments.

Most of the mooted improvements are in response to frequently heard complaints from foreign investors, which reach the ministry through the annual China Mining International Symposium.

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