Mineral rights mortgage financing: a new financing path for private mining companies

Dear mine owners, there is big news that you must know - your mining rights can now be mortgaged!

On May 20, Premier Li Qiang signed an order of the State Council, and the "Regulations on the Implementation of the Mineral Resources Law" was officially announced.Effective from June 15. The most important content: Mining rights have officially become mortgageable assets. Mine owners can use mining rights to get bank loans just like using real estate mortgages.

How long did it take for the policy to be implemented?

To be honest, this policy has kept the mining industry waiting for too many years.

In the past, mining rights were a "hot potato" in the eyes of banks - not that they were worthless, but because their legal attributes were unclear and banks were afraid to accept them. Mine bosses hold on to mineral rights worth tens or even hundreds of millions. When they need money urgently, they cannot get loans. They can only seek private loans, and the interest rates are frighteningly high.

It's different now. The new regulations clearly state:Mining rights are usufruct rights, like real estate and land use rights, can be mortgaged and financed. what does that mean? Your mining rights have finally become "living money".

Learn how to operate in three steps

Step one: Confirm that your mineral rights are "clean"

Not all mineral rights can be mortgaged. There are several key points that banks need to review:

• Is the mineral right within the validity period?
• Are there any unpaid mining rights transfer proceeds?
• Are ecological restoration fees withdrawn on time and stored in a dedicated account?

  
  

  If there is a problem in any link, the loan will be suspended.

  Step 2: Get an appraisal and let the bank know how much you are worth

  You need to find an agency qualified to evaluate mining rights and make a formal evaluation report. This report is your "trump card" in negotiating with the bank - the assessed value of the mineral rights directly determines how much you can borrow.

  Step 3: Sign the contract and register

  The mortgage contract is not completed until it is signed, and must be registered with the natural resources authority. Remember:Registration is effective. Failure to register is useless..

  Where is the biggest pitfall?

  The operation process is not difficult, but the pitfalls are in the details.

  Pitfall 1: Arrears. Many mine owners feel that it is okay to pay the transfer proceeds later, since the mines are still there anyway. In fact, your mineral rights have been in a "sick" state since the day you were in arrears. The bank can find out in a single check and directly deny the loan.

  Pitfall 2: Ecological Restoration Fund. The new regulations mandate that ecological restoration costs must be set up in a special account, and this moneyshall not be seized, frozen or transferred. Many mine owners didn't notice this, didn't set up their accounts properly, and were dumbfounded when they took out a loan.

  Pitfall Three: Evaluation Report. Some people want to save trouble and find any agency to issue a report. As a result, the bank did not recognize it and the money was wasted.

  Yingting lawyer reminds

  The door to mineral rights mortgage financing has opened, which is definitely good for private mining owners. But when opportunities come, risks are waiting in the dark.

  I suggest you do three things now:

If you try to improvise when you really need the money, the day lilies will be cold.

---

For mining legal issues, contact Yingting lawyer

If you have historical issues with your mineral rights or want to know the specific operational details of mineral rights mortgage, please contact us. Leave professional matters to professionals, which is worry-free and reliable.

(Note: This article is for general reference only and does not constitute legal advice. Please consult a professional lawyer for specific questions)