The Chinese government, in accordance with the requirement for the establishment of the socialist market economic system, has deepened the reform of the system for mineral resources exploration, and carried out the public and basic geological surveys and evaluation and the strategic exploration of mineral resources on the one hand and the commercial exploration of mineral resources on the other separately. In 1999, China set up the China Geological Survey, which organized a new round of large-scale survey of the land and resources, and initiated a basic exploration plan, a mineral resources prospecting and evaluation project and a resources survey and utilization technological development project, with the emphasis on the basic geological survey and the evaluation of the prospects for mineral resources in regions with a low level of geological work, especially the exploration and evaluation of the mineral resources potentials in the western regions and the exploration and evaluation of mineral resources in short supply, so as to provide a scientific basis for the planning work regarding mineral resources and administrative decisions by the government, and to furnish basic geological information regarding mineral resources for commercial prospecting. The strategic prospecting for mineral resources with government investment has attracted investment into commercial prospecting, and a number of areas with prospects of mineralization have become hot spots for commercial investment.

The Chinese government encourages and gives active guidance to the commercial prospecting that meets planning requirements, gears to market demands and focuses on economic results. It encourages commercial prospecting in central and western regions, remote and border regions and regions inhabited by ethnic minorities, as well as other economically less-developed regions with resources potentials. It encourages mining enterprises to carry out commercial geological prospecting in the outlying areas or the deeper formations of old mines with both market and resources potentials, and to find new substitute resources. It encourages investors to acquire exploration and mining rights, through fair competition, to sites of mineral deposits founded after prospecting with government investment. It encourages commercial prospecting for oil, natural gas, coal gas, coal with low ash and low sulfur contents, and fine-quality manganese, chromium, copper, aluminum, gold, silver, nickel, cobalt, metals of the platinum group, and sylvite. It also encourages the development of geothermal, mineral water and groundwater resources, in a scientific, economical and rational way, while encouraging the use of good-quality water for better purposes, and the prevention and control of pollution.

China will take the following measures to increase the domestic capability of mineral resources supply:

— Strengthen the exploration and exploitation of energy mineral resources. China has an abundance of coal resources, and there will be no major changes in the position of coal as China’s main energy source in the near future. However, the energy structure with coal as its main source causes serious air pollution, and some adjustments must be made to it. China will make full use of its coal and hydro power resources, and develop cleaning technologies for coal, including coal washing, dressing, liquefying and gasifying technologies. The scale of coal production in the eastern regions will be stabilized, stress will be laid on the development of the coal resources in Shanxi and Shaanxi provinces and the Inner Mongolia Autonomous Region, the coal resources in southwest China will be exploited in a rational way, and the coal resources in Xinjiang, Gansu, Ningxia and Qinghai will be exploited in an appropriate way. Greater efforts will be made to exploit coal bed methane. China boasts fairly rich oil resources, which, however, are insufficient to meet the demand. To solve the problem of insufficient oil and gas supply, China will first exploit and utilize its domestic oil and natural gas resources. Abundant petroleum resources have been discovered in the western regions. The Tarim and Junggar basins in Xinjiang, the Ordos Basin on the borders of Shaanxi, Gansu, Ningxia, Inner Mongolia and Shanxi, and the Qadam Basin in Qinghai all show great potentials for development. Important discoveries have also been made in the Bohai Sea area. In exploration and exploitation of oil resources, emphasis will be placed on prospecting work in the old oilfields on the basis of exploiting the deeper formations in the eastern regions, developing the oilfields in the western regions and accelerating the exploration of offshore oil and gas resources; at the same time, efforts will be exerted to make new discoveries in the new formations and regions to increase the verified oil reserves and maintain a rational rate of self-sufficiency in oil. In exploration and exploitation of natural gas resources, emphasis will be placed on the Tarim, Ordos and Qadam basins, and the Sichuan-Chongqing region along the west-east gas pipeline, as well as the East China Sea Basin, to increase the reserves, raise the output and gradually improve China’s energy structure.

— Strive for a rational distribution of regional geological exploration and exploitation of mineral resources. The comparative advantages of the mineral resources in the western regions are conspicuous, and their distribution is concentrated, thus providing the resources foundation for the formation of dominant pillar industries. Of the country’s 158 minerals with proved reserves, 138 are found in the western regions. The more than 30 minerals found in the western regions, including coal, oil and gas, sylvite, chromite, rare earths, phosphorus, nickel, vanadium, manganese, copper, aluminum and zinc, have comparative resources advantages in the country. With the implementation of the western development strategy, the accelerated construction of infrastructure facilities and ecological protection will help to connect quickly the resources and the resource-related products of the western regions with the domestic and international markets, thereby greatly improving the conditions for the exploitation of mineral resources and the entry of mineral commodities into the market. The Chinese government encourages the commercial exploration of mineral resources, including oil, natural gas, coal gas, high-grade coal, copper, gold, high-grade manganese, sylvite and groundwater in the western regions, with emphasis on the resource-rich areas, to promote the rational exploitation and deep processing of oil, natural gas, non-ferrous metals, sylvite, phosphorus and other mineral resources in the western regions and accelerate the change from resources advantage to economic advantage. In the central and eastern regions, emphasis will be placed on tapping the potentials of the mineral resources, strengthening their multipurpose use and expanding their processing industrial chain. Exploration of tungsten, tin, antimony, lead, zinc and rare earth resources will be started in accordance with the targets of the adjustment of the national industrial structure. Full play will be given to the advantages of the central and eastern regions in regional position and technologies in the exploitation of non-metallic minerals, so as to raise the level of deep processing and the degree of intensive utilization of non-metallic minerals, open new fields for their application and increase the market competitiveness of the products. At the same time, we will start the work of looking for substitute resources in existing mines in the central and eastern regions. Maritime areas under Chinese jurisdiction abound in mineral resources. The Chinese government will continue to strengthen the prospecting and exploitation of oil and gas resources in these areas and conduct research into other mineral resources, and take an active part in the international activities of seabed mineral resources research, prospecting and exploitation.

— Accelerate the structural adjustment of mineral resources exploitation and utilization. The degree of intensiveness and modernization of mineral resources exploitation in China is still somewhat low, and it is necessary to optimize the structure, innovate technologies and improve management in this regard. China will speed up the structural adjustment of mineral resources exploitation and utilization, increase productive capacity and raise efficiency. Through technological transformation of mining enterprises and improvement of their management mechanism, the Chinese government encourages the active introduction of clean production, and the application of mature and high and new technologies in mineral resources prospecting and exploitation, so as to raise the level of prospecting and exploitation. We shall introduce scale exploitation, raise the level of intensiveness and eliminate backward and scattered mining capacity. Mining enterprises which operate without licenses, cause environmental pollution, waste resources or do not have the proper conditions for safe operation shall be closed down in accordance with the law. Through market and policy guidance, we shall develop mining enterprise groups with international competitiveness. We shall continue to support and assist non-state-owned mining enterprises in their development.

— Raise the level of multipurpose utilization of mineral resources. Of China’s proved mineral resources, there are fairly large quantities of low-grade resources which are still difficult of utilization under the present technological and economic conditions. The exploitation and utilization of these resources is an important way to solve the shortage of mineral resources supply. The Chinese government encourages the accelerated conversion of resources with poor economic workability into resources of economic workability by strengthening the construction of the necessary infrastructure facilities in the resource-rich regions, improving the external conditions for the construction of mines, using high and new technologies, and reducing the cost of exploitation. To achieve multipurpose utilization of the country’s resources is one of China’s important technological and economic policies on mineral resources prospecting and exploitation. China carries out comprehensive prospecting, overall evaluation, comprehensive exploitation and multipurpose utilization of mineral resources. It encourages and supports mining enterprises to exploit and utilize low-grade refractory resources, and encourages and supports them to develop and use substitute or secondary resources to increase the sources of resources supply and reduce production costs. It encourages mining enterprises to pool efforts to tackle difficult sci-tech problems and pursue technological transformation for the multipurpose utilization of the “three wastes” (waste slag, waste gas and waste liquid). It also encourages the recycling of scrap metals and secondary resources, as well as the active exploitation of non-traditional mineral resources. China issued the “Interim Provisions Concerning Certain Questions on the Multipurpose Utilization of Resources” in 1985, promulgated the “Opinions on Making Further Multipurpose Utilization of Resources,” and published the “Catalogue of Resources for Multipurpose Utilization” in 1996. It has adopted preferential policies for the multipurpose utilization of mineral resources in the fields of enterprise income tax and value-added tax, and it encourages mining enterprises to raise the level of the multipurpose resources utilization by reliance on scientific and technological progress and innovations.

— Save energy and reduce consumption. China encourages the development of technologies for deep-processing of mineral products, new energy sources and new material technologies as well as technologies and technical processes that save energy, materials and water, reduce consumption and raise the efficiency of resources utilization. We shall develop renewable sources of energy and nuclear power, increase the use of clean coal and CBM, and reduce the proportion of coal directly burned. We shall develop new metals, new non-metals and substitutes for conventional mineral materials and reduce the dependence of an economic society on conventional mineral materials.

— Establish a system for the reserves of strategic mineral resources. China will put the major strategic resources in the reserves order by stages and in groups, on the basis of the present situation concerning the supply and demand of mineral resources, as well as its national strength.

— Solve step by step the problem of substitute resources in old mines. Some of the large and medium-sized state-owned mines in China have entered their middle or late stages, and have insufficient substitute resources. Some old mining enterprises can no longer continue their operations because their resources are exhausted. The Chinese government will increase its policy support for them by formulating rational financial and tax policies in line with the characteristics of mineral resources prospecting and exploitation, to create good external conditions for their survival and development. We shall encourage large old mines to look for substitute resources so as to prolong their service life.

IV. Widening the Opening of, and Cooperation in, Mineral Resources Exploration and Exploitation

China will carry out its policy of opening to the outside world unswervingly. It will take an active part in international cooperation in the field of mineral resources to promote the exchange of domestic and foreign resources, capital, information, technology and markets on the basis of reciprocity and mutual benefit.

China implements the policy of encouraging foreign businesses to invest in mineral resources prospecting and exploitation in the country. China encourages domestic mining enterprises to cooperate with international mining companies, draw on advanced international experience, import advanced technology and operate in accordance with international practices. China began to open its oil industry to the outside world in 1982 by using foreign capital and technology to prospect and exploit oil and gas resources. As a result, the range of exploitation has been extended, and the output of crude oil has risen by big margins. Now, China has begun to participate in the exploitation of petroleum resources outside the country. The Chinese government has already taken or will take a number of new measures to further improve the environment for foreign investment, widen the opening-up and strengthen international cooperation.

— Giving further encouragement to foreign businesses to invest in China. China issued the “Opinions on Further Encouraging Foreign Investment at Present” in August 1999, the revised “Directory of Industries for Foreign Investment” in March 2002, and the “Catalogue of Dominant Industries for Foreign Investment in the Central and Western Regions” in June 2000. It clearly emphasizes that greater financial support will be extended to enterprises with foreign investment; encourages those enterprises to make technical innovations and increase domestic purchases; encourages foreign investors to invest in the central and western regions; and further improves the management and services for enterprises with foreign investment.

— Further improving cooperation with foreign companies in prospecting and exploiting oil and gas resources. In the field of oil and gas resources, the Chinese government has always adopted the pattern of cooperation with foreign companies through one “window” based on product-sharing contracts, and this has been widely endorsed by foreign oil companies. China issued the revised “Regulations on the Exploitation of Offshore Oil Resources in Cooperation with Foreign Enterprises” and the “Regulations on the Exploitation of Onshore Oil Resources in Cooperation with Foreign Enterprises” in September 2001.

— Encouraging foreign businesses to make investment in exploration and exploitation of other mineral resources. China issued the “Opinions on Further Encouraging Foreign Businesses to Make Investment in Exploring and Exploiting Mineral Resources Other Than Oil and Gas” in October 2000, thus further opening the prospecting and mining rights market to allow foreign businesses to start prospecting ventures with exclusive capital or in cooperation with Chinese partners, and guarantees their legal priority rights in exploiting the mineral resources of workable economic value in the zones explored. The prospecting and mining rights obtained by foreign businesses with such investment can be transferred according to law. Foreign businesses which invest in exploiting and recovering paragenous (associated) minerals, utilizing tailings, raising the rate of multipurpose utilization and exploration and exploitation of mineral resources in the western regions shall be entitled to reduction of or exemption from mineral resources compensation fees under a preferential policy. Foreign businesses which make exclusive investment or set up joint ventures or cooperate with Chinese enterprises in exploiting mineral resources, the exploitation of which is encouraged in the “Directory of Industries for Foreign Investment,” shall be exempted from mineral resources compensation fees for five years. It is stipulated that governments at all levels shall not start joint ventures or enter into cooperation with foreign investors in running mines, and in no way should they make irrational economic demands on foreign investors, make irrational inspections, requisition donations arbitrarily or collect charges other than those stipulated in the laws and regulations.

— Further improving the environment for investment in exploring and exploiting domestic mineral resources. The Chinese government sticks to the protocol on its accession to the WTO and other relevant commitments by annulling the administrative statutes and departmental rules incompatible with the WTO rules and gives national treatment to foreign investors in prospecting and exploitation. The Central Government shall guarantee the consistent implementation of the policies, laws and regulations of the state regarding mineral resources exploration and exploitation in all parts of the country, and standardize the behavior of governments at all levels in exercising management over foreign investment in running mines. China has revised the rules for the management of geological data according to the WTO’s principle of transparency, broadened the scope of geological data to be released to the public, and established an open information service system on mineral resources to ensure the availability of public geological data for foreign investors. It has clarified, simplified and standardized the approval procedure for foreign investment in mineral resources prospecting and exploitation.

— Changing the import mechanism and operation mode. In the course of taking the new road to industrialization and attracting foreign investors to make investment in mineral resources prospecting and exploitation, efforts will be made to shift from laying emphasis on importing funds only to placing equal emphasis on importing funds, technology, modern management and people with expertise, from the mere emphasis on bringing in foreign funds in prospecting and exploitation to the establishment of joint ventures and cooperation in the development of services and trade in the mining industry, and from dependence chiefly on foreign loans and direct foreign investment to the direct use of the international mining capital market.

China will continue to strive for mutual supplement with other countries in mineral commodities and promote the development of foreign trade in mineral products by expanding its international trade in mineral commodities according to the principle of reciprocity and mutual benefit. The Chinese government shall formulate a unified policy on the import and export of mineral products in accordance with the WTO rules and its commitments on its accession to the WTO, coordinate, in a unified way, the export of its dominant mineral products and the import of mineral products in short supply, adjust the import and export mix of mineral products, improve the economic results, and encourage the export of deep-processed mineral products with high added value and the import of primary mineral products. Direct import of mineral products will remain the chief way by which China utilizes foreign mineral resources for a fairly long time to come. The Chinese government shall gradually change the situation in which the proportion of the spot trade in mineral commodities, including crude oil, is too big at present, encourage the signing of long-term supply contracts with foreign companies, and import minerals from diversified sources. With regard to mineral resources in which China has advantages, such as tungsten, tin, antimony, rare earths, fluorspar and barite, the government will improve the export structure, increase the added value of the export products, standardize the order of export business, and actively urge the trade intermediary organizations to improve trade coordination and self-discipline, and promote the healthy development of the trade in domestic and foreign mineral products.

The Chinese government encourages domestic enterprises to take part in international cooperation in the sphere of mineral resources, and in exploration, exploitation and utilization of foreign mineral resources. It will promote and protect investments in mineral resources prospecting and exploitation outside China, and standardize the investment and business operation behavior in accordance with international practices. It will actively develop cooperation with foreign companies in geological survey and mineral resources prospecting and exploitation, and promote bilateral and multilateral exchanges and cooperation in the relevant scientific and technological fields.

V. Achieving the Coordinated Development of Mineral Resources Exploitation and Environmental Protection

Mineral resources prospecting and exploitation will change and affect the ecological environment around the mining areas. The Chinese government attaches great importance to environmental protection and the prevention and control of pollution in the course of exploiting and utilizing mineral resources, and strives for simultaneous development in mineral resources exploitation and environmental protection and pollution control. Environmental protection, pollution control and land rehabilitation in mining areas are explicitly stipulated in laws and regulations China has published and implemented. The Chinese government will continue to improve environmental protection in mining areas, and strengthen the work in the following aspects:

— Continuing to adhere to the principle of placing equal stress on the exploitation and utilization of mineral resources and the protection of the ecological environment, by putting prevention first and combining prevention with control. We shall strictly adhere to the system of environmental impact evaluation reporting, the system of land rehabilitation and the system of collecting fees for pollutant discharge in mining areas. We shall strictly adhere to the system whereby the construction of mines goes hand in hand with the designing, constructing and commissioning of environmental protection facilities. Active guidance will be given to enterprises in organizing clean and safe production in the course of mineral resources prospecting and exploitation.

— Restricting the exploitation of mineral resources that produce considerable negative impacts on the ecological environment. Strict control will be enforced on prospecting and exploitation in national conservation and other areas where the ecological conditions are weak. Mineral resources exploitation is forbidden in national conservation, important scenic areas and important geological protection areas, and mineral resources exploitation in ecological protection areas is strictly restricted. We shall strictly prohibit coking, metal refining and smelting, sulfur and vanadium refineries with indigenous methods. We shall restrict the building or rebuilding of mines producing coal with a sulfur content exceeding 1.5%, and prohibit the building of mines producing coal with a sulfur content exceeding 3%. We shall restrict the exploitation of mineral resources in areas liable to geological disasters, and prohibit the exploitation of mineral resources in areas with real danger from geological disasters. Unauthorized exploitation of mineral resources within a given distance on both sides of railway lines and major highways is forbidden.

— Evaluating the impact on the ecological environment before starting a new mineral resources exploitation project. Measures shall be taken to protect the ecological environment, avoid or reduce adverse effects or damage caused to the air, water, farmland, grasslands, forests and seas. A program for the exploitation and utilization of mineral resources shall include a plan for the protection of water and soil, a plan for land rehabilitation, a plan for the prevention and control of geological disasters in mining areas and an evaluation report on geological environmental impacts. These documents shall be submitted for approval as stipulated. We shall exercise stricter supervision and management over the control of the “three wastes” in mines, and strictly control the discharge of waste gas in accordance with the criteria stipulated by the state. We shall strengthen the control of poisonous and harmful waste water and other pollutants produced in mines, and offenders shall be severely dealt with.

— Strengthening the investigation and monitoring of the environment and the prevention and control of disasters in mining areas. The government shall organize nationwide investigations and evaluations of the ecological environment in mining areas. Mining enterprises shall strengthen investigation, monitoring, forecasting and early warning of disasters possibly induced in the course of the development of mines, promptly take effective measures to prevent and control them, and submit monitoring reports to the competent departments of the local governments. An information network shall be established and emergency anti-disaster plans shall be worked out to prevent sudden disasters at the maximum.

— Setting up a multi-source investment mechanism for environmental protection in mining areas. We shall establish an agreement-honoring system for environmental protection and land rehabilitation in mining areas, and adopt government guidance and market operation to ensure the effective restoration and improvement of the environment there. With regard to abandoned mines and old mines, the state will strengthen the restoration and improvement of the ecological environment on the basis of demonstration projects, and encourage investment in this regard from society at large. We shall set up an investment mechanism for environmental control in mines still in production, with the mining enterprises playing the leading role. The enterprises shall provide the funds for environmental protection in new mines.

VI. Improving the Management of Mineral Resources

In the past five decades and more since the founding of the People’s Republic, China has gradually improved the management of its mineral resources, putting it on legal, standardized and scientific tracks.

— Enacting and gradually improving the laws and regulations on mineral resources management. China has put in place a legal system for its mineral resources, consisting of the “Mineral Resources Law” and other relevant laws and regulations, with the Constitution as its foundation. Since 1982, China has successively promulgated the “Mineral Resources Law,” “Land Administration Law,” “Coal Law,” “Law on Safety in Mines,” “Environmental Protection Law,” “Marine Environmental Protection Law” and “Law on the Use and Management of Sea Areas.” The Chinese government has also issued more than 20 supplementary statutes and regulations, including the “Detailed Rules for the Implementation of the Mineral Resources Law,” “Regulations on the Exploitation of Offshore Oil Resources in Cooperation with Foreign Enterprises,” “Regulations on the Exploitation of Onshore Oil Resources in Cooperation with Foreign Enterprises,” “Measures Governing the Registration and Management of Areas for Surveying Mineral Resources,” “Measures Governing the Registration and Management of Mineral Resources Exploitation,” “Measures Governing Administration of the Transfer of Prospecting and Mining Rights,” “Provisions on the Administration of the Collection of Mineral Resources Compensation Fees,” “Interim Measures on the Supervision and Control of Mineral Resources,” and “Regulations on the Management of Geological Data.” The various provinces, autonomous regions and municipalities directly under the Central Government have, in addition, formulated relevant local statutes. These laws and regulations have put in place China’s basic legal system for the management of its mineral resources, and provided the legal guarantee for exercising administration, managing mineral resources and operating mines according to law.

— Deepening the reform of the mineral resources management system. To constantly meet the requirements for economic restructuring, China has reformed the mineral resources management system, changed and strengthened government functions, and separated government functions from enterprise and institution management. From 1950 to 1981, the former Ministry of Geology and other relevant industrial administration departments exercised management over the country’s mineral resources. The geological departments chiefly performed the functions of organizing nationwide geological survey and prospecting, managing the reserves of mineral resources and controlling the collection and exchange of geological data, while the relevant industrial administration departments were responsible for the management of mineral resources exploitation. In 1982, the Ministry of Geology changed its name to the Ministry of Geology and Mineral Resources, and became responsible for the supervision and management of mineral resources exploitation as well as the industrial management of geological survey and prospecting. When the government was reorganized in 1988 and 1993, it made further clear the four basic functions of the Ministry of Geology and Mineral Resources — exercising comprehensive management of mineral resources, exercising industrial management of geological survey and prospecting, exercising supervision and management of the rational exploitation, utilization and protection of mineral resources, and exercising management of the monitoring, evaluation and supervision work regarding the geological environment. The National Mineral Resources Commission was established in January 1996 to strengthen the centralized management function of the Central Government over mineral resources and safeguard the rights and interests of the state as the owner of the country’s mineral resources. The government was restructured again in 1998, and the functions of mineral resources management belonging to the State Planning Commission and the coal and metallurgical industrial departments were transferred to the Ministry of Land and Resources, to achieve the centralized management of mineral resources of the whole country. At present, over 90% of the country’s prefectures and cities, and more than 80% of the counties have set up land and mineral resources administration organs.

— Strengthening the management of mineral resources planning. The plan regarding mineral resources is the guiding document for the survey, exploitation and utilization of the country’s mineral resources and the basis for exercising macro control. The Chinese government is further strengthening mineral resources planning, improving the planning system, fixing strict planning responsibility, check-up, announcement, revision and compilation and supervision systems, strengthening publicity work concerning the plans, and setting up a system for ensuring the implementation of the plans and information feedbacks, to guarantee the fulfillment of the planned targets.

— Reforming the management system for mineral resources prospecting and mining rights. The Constitution and the “Mineral Resources Law” of China explicitly state that “mineral resources are owned by the state.” The State Council exercises the state ownership of the mineral resources. At the same time, China has reformed the management system for mineral resources prospecting and mining rights, clearly defined the property right attribute of the prospecting and mining rights, and established the system of acquisition of the prospecting and mining rights with compensation and the transfer of them according to law. China has established a legal system whereby the holder of the prospecting right enjoys priority in acquiring the mining right in the area explored, and strengthened the exclusiveness of the prospecting and mining rights. It has changed the limits of authority regarding giving approval to mineral resources prospecting and exploitation and issuing the prospecting and mining licenses. The prospecting and mining rights can be obtained with compensation by such means as competition through bidding, auction and listing. The transfer of prospecting or mining rights shall follow the market rules, be subject to approval from government departments, and go through the procedure for transfer according to law. The Chinese government will continue to cultivate and standardize the prospecting and mining rights market, and exercise stricter supervision and control over the operation of the market in accordance with the requirements of clearly defined ownership, complete rules, effective regulation and control, and standard operation.

— Improving the system of compensation for the use of mineral resources. China’s “Mineral Resources Law” clearly provides for the system of compensation for the use of mineral resources. The Chinese government started levying compensation fees for mineral resources from the holders of mining rights in 1994, thus terminating the history of compensation-free mining in China. The collection of the compensation fees for mineral resources (fees for the use of mining areas in cooperative development of petroleum resources offshore or onshore) embodies the rights and interests of the state as the owner of the mineral resources, and is conducive to establishing an economic incentive mechanism to promote the protection and rational utilization of mineral resources. The compensation fees for mineral resources collected by the Chinese government are included in the state budget; they are specially managed and used chiefly in mineral resources prospecting. Holders of mining rights who conform to the stipulations of the laws and statutes shall have their compensation fees remitted or reduced. The Chinese government has stipulated that, beginning in 1998, it will collect fees for the use of prospecting and mining rights, and the costs for the prospecting and mining rights formed in the course of prospecting with state investment from the holders of the prospecting and mining rights. Fees and costs for the use of prospecting and mining rights shall be remitted or reduced for mineral resources exploration and exploitation, which meet the requirements, in the western regions, regions inhabited by ethnic minorities, remote and poor regions designated by the government, and offshore areas.

— Rectifying and standardizing the order of mineral resources management. Good order in the mineral resources management is a prerequisite for the protection and rational utilization of mineral resources. Since the “Mineral Resources Law” was promulgated in 1986, Chinese legislative organs have organized examinations on law enforcement on many occasions. Since 1995, the Chinese government has rectified the order of mineral resources management on a large scale throughout the country, resulting in some improvement in the order of mineral resources management. The Chinese government will continue to intensify supervision over the enforcement of the law, rectify and standardize the order of mineral resources management, strengthen supervision over production safety, safeguard the rights and interests of the state as the owner of mineral resources and the legitimate rights and interests of the holders of prospecting and mining rights.

— Improving the services of the government departments. It is necessary to improve the style of service and make the appropriate administrative affairs known in accordance with the requirements of being open, transparent, standardized and highly efficient. Mineral resources administrative departments at all levels shall announce to the general public on their work system, matters for approval, important documents, standards and time limits, and subject themselves to public supervision. They shall establish systems for internal joint hearings, handling procedures or documents at windows, and ascertaining administrative responsibilities. They shall establish a communiqué system, release information on the mineral reserves and the progress in mineral resources exploration and exploitation, and gradually make the geological data and information known to the general public. They shall establish a system for access to information so that the general public can promptly inquire about the state plan, policies, laws and statutes concerning mineral resources, and criteria for the classification of the reserves of the resources, seek information on the registration of prospected areas, on registration of exploitation, and rates of compensation fees for mineral resources and ways of payment. At the same time, they shall make great efforts to apply information technology, raise their work efficiency and improve their services.