mineral resources

"Which department approvals are required for a listed company to acquire mining assets?" "Why do some cases have not been approved for half a year?" Many mining company bosses feel that everything will be fine once they sign an acquisition agreement with a listed company. It turns out that the real difficulty is still to come - the approval process. Lawyer Liu Jingzhu is here to sort it out for you today. #p#Paging title#e#

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#p#Paging title#e#1. Internal approval of listed companies#p#Page title#e##p#Paging title#e#

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According to the "Administrative Measures for Major Asset Restructuring of Listed Companies", if any of the total assets, operating income, and net assets of the subject assets exceeds 50% of the corresponding indicators of the listed company, it constitutes a major asset reorganization. Major asset reorganization requires: Board of Directors review → Opinions of independent directors → Voting at the general meeting of shareholders → Separate counting of votes by small and medium-sized shareholders. #p#Paging title#e#

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#p#Paging title#e#2. Exchange review#p#Page title#e##p#Paging title#e#

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When a listed company acquires assets that meet certain standards, it needs to submit application documents to the exchange. The exchange will issue a letter of inquiry, which usually includes whether the ownership of the underlying assets is clear, whether the evaluation method is reasonable, whether the pricing of related-party transactions is fair, whether performance commitments are feasible, whether legal risks are fully disclosed, etc. #p#Paging title#e#

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#p#Paging title#e#3. Securities Regulatory Commission registration (if necessary)#p#Page title#e##p#Paging title#e#

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Listed companies that issue shares to purchase assets need to be registered with the China Securities Regulatory Commission. Simple mergers and acquisitions that are cash acquisitions and do not involve issuance do not need to be registered with the Securities Regulatory Commission. #p#Paging title#e#

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#p#Paging title#e#4. Approval by the Natural Resources Department#p#Page Title#e##p#Paging title#e#

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This is the most easily overlooked but most critical level. According to the Mineral Resources Law and its implementing regulations, the transfer of mining rights requires approval from the natural resources authorities. Approval authority: Strategic mineral resources and inter-provincial mineral resources are the responsibility of the natural resources department of the State Council; other mineral resources are the responsibility of the provincial natural resources department. The approval cycle usually ranges from 3-6 months. #p#Paging title#e#

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Approval conditions include: the exploration rights have been held for a certain period and minimum exploration investment has been completed, the mining rights have been put into production and there are no illegal activities, the mining rights obtained by agreement cannot be transferred if they are held for less than 5 years, the ownership of the mining rights is clear and undisputed, and there is no seizure or freezing, etc. #p#Paging title#e#

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#p#Paging title#e#5. Foreign investment review (if involved)#p#Page title#e##p#Paging title#e#

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Mergers and acquisitions in important energy and resource fields related to national security require foreign investment security review. #p#Paging title#e#

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#p#Paging title#e#6. National security review (if involving cross-border mergers and acquisitions)#p#Page title#e##p#Paging title#e#

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If you acquire overseas mining assets, you also need to consider the overseas investment filings of the National Development and Reform Commission, the Ministry of Commerce, and the Administration of Foreign Exchange, as well as the foreign investment review and antitrust review of the host country. #p#Paging title#e#

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#p#Paging title#e#Frequently Asked Questions During the Approval Process#p#Page Title#e##p#Paging title#e#

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Incomplete materials are the most common problem, and ownership disputes are the second biggest problem. Lawyer Liu Jingzhu suggested that before officially starting the approval process, it is best to hire a professional lawyer to pre-examine the mining rights to ensure that the materials are complete and the ownership is clear. #p#Paging title#e#

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Beijing Yingting Law Firm has extensive experience in mining M&A approval procedures and can assist clients in preparing approval materials, communicating with approval departments, and handling difficult issues during the approval process. #p#Paging title#e#

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(This article is for reference only. Please consult a professional lawyer for specific questions. This content does not constitute legal advice.) #p#Page Title#e#

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