The long-awaited China’s first Trade Guide for Mining Right Transfer (hereinafter called Trade Guide) was officially publicized in China Beijing Exchange on Sept. 16, 2009.
The 30,000-character-long Trade Guide, consisting of text, seven attachments and six appendixes, mainly gives specific regulations on trade rules and operation processes for key documents examination, independent expert auditing, information publicizing, bidding organizing and payment settlement for mining right transfer projects.
Trade Guide is a trial version compiled by a special task force and expert team organized by CBEX through four-month-odd effort, opinion solicitations and six times of revisions in accordance with relevant national laws, regulations and Interim Provisions on Remise and Transfer of Mining Right promulgated by Ministry of Land and Resources and other laws and stipulations.
Industry expert said it has following three outstanding features as China’s first tentative trade guide for mining right transfer.
First, it improves the access threshold. Currently, mining right transfer market is fairly active. However, the insufficiency of laws and regulations on mining right circulation results in the vague responsibility definition, inefficient cooperation, improper supervision of governmental departments. Unauthorized transfer of mining right transfers and alterations are prevailing in secondary market, causing major hidden problems for safe mine production and social stability and a severe loss of state-owned assets. Mining right transfer still confronts problems in information disclosure, case acceptance, transaction organizing and fund settlement, leaving huge credit risk in the mining right trade market.
Thus, Trade Guide makes stringent regulations in key documents examination, basic form compilation, normative information disclosure, transaction organizing and payment settlement control to improve the threshold for project transfer, prevents false materials, reports and procedures’ disturbance to the market order, so as to avoid the excessive glossing and virtualization of the mining right and the consequent transaction violations therefrom etc. and standardize the trade, achieve orderly circulation of mining right and gradually explore a trans-regional mining right transfer platform.
Second, it standardizes the transaction process. Trade Guide borrows CBEX’s experiences in the transfer of enterprise’s state-owned equity, financial assets and practical assets, technical equity, strictly observes relevant national laws and regulations and regulations issued by Ministry of Land Resources and takes the actual requirements of mining right transfer into consideration to work out a rigid transaction flow, control the transaction from the process and protect the legal rights and benefits of relevant transaction subjects.
Third, it tries out opinions of independent experts. On Aug. 26, 2008, to fight against the speculation of the mining right concept of listing companies, Shanghai and Shenzhen Stock Exchanges standardized the listing company’s mining right acquisition and transfer (incl. transfer and acceptance) information disclosure process, promulgated No. 18 Listing Company’s Temporary Bulletin Format Directive to strictly define the acquisition and transfer, mining right value, valuation basis, valuation method, payment mode and evaluation confirmation, mining right owner’s survey and exploration qualification, access condition, legal letter and so forth. Reviews and evaluations on mining right transactions shall be strengthened according to the requirement.
As for operation mode, membership is practiced in mining right transfers in CBEX. By means of absorbing industry, brokerage, service, information, investment and recommendation members, CBEX will set up a smooth information disclosure system, design and work out a mining right transaction system, integrate a mining right transaction-related service system and provide standard and efficient transaction services for its members. Through extensive and effective membership services, CBEX reinforces to promote effective links between the mining right transfer and investors and improve the mining right circulation quality and efficiency based on effective clustering and classified management to the resources of mining rights and investors. Meanwhile, CBEX fully displays the price discovery of equity market and promotes the value preserving and adding of mining right, especially the state-owned mining right, in the process of orderly circulation through bidding promotion and organization.
As reported, CBEX interpreted Trade Guide’s functions as: with the mining right transfer as the core, the mining capital as the drive and the service consulting and information publicizing as the means, trying to advance the diversification of mining capital, the marketization of mining right transactions and the standardization of mining consulting services and finally forge a standard and active domestic allocation and transaction platform for mining rights, capitals and services to realize five main functions of transfer transaction, information exchange, market monitoring, decision consulting and governmental assistance.
