mineral resources

"My mineral rights have been assessed at RMB 100 million, why won't the bank give me a loan?" This is the most troublesome question for Mr. Wang, the head of a gold mining company in Heilongjiang. In the past ten years, Mr. Wang visited all the major state-owned banks in the province, and the answer he received was the same: "We don't have mature experience in disposing of mineral rights mortgages. Sorry, we can't do it." In the end, we could only turn around through private loans, and the interest rates were several times higher. In 2025, this problem will be solved with the implementation of the new Mineral Resources Law. **Three major concerns about banks not collecting mineral rights** To understand why the new law can break the situation, we must first understand why banks are unwilling to collect mineral rights mortgages. **Concern 1: The nature of mineral rights registration is unclear** Under the old legal system, mineral rights registration was an "administrative approval" act. The main purpose was to confirm the exploration and mining qualifications of the mineral rights holder, rather than to publicize the effectiveness of property rights. In layman's terms, it is "a license" rather than "a real estate certificate". When banks consider collateral, the most important thing is "whether it can be disposed of." Approval registration obviously lacks this guarantee. **Concern 2: The value of mineral rights is difficult to evaluate** The value of mineral resources is affected by multiple factors such as mineral type, grade, reserves, market price, development cost, safety conditions, environmental protection requirements, etc., and the evaluation is much more difficult than that of real estate. Moreover, the conclusions of different assessment agencies may vary greatly, making it difficult for banks to judge. **Concern 3: It is difficult to realize the mineral rights disposal** Even if the bank takes the mineral rights mortgage, if the loan cannot be recovered, when the mineral rights are really auctioned, they will find that there are very few potential buyers with mining qualifications and willing to take over, the evaluation and auction cycle is long, and it may also involve complex creditor-debt relationships - the more the bank thinks about it, the more troublesome it becomes. **How ​​does the new law solve these three major problems? ** The "Mineral Resources Law" revised in 2024 provides a solution from the institutional level: **Crack 1: Clarify the property rights attributes of mining rights** Article 22 of the new law establishes a property rights registration system for mining rights, stipulating that "the establishment, change, transfer, mortgage and elimination of mining rights shall be effective after being registered in accordance with the law." This means that mining rights officially possess the attributes of usufruct rights stipulated in the Civil Code and can be publicized like real estate. **Crack 2: Establish unified registration rules** The Ministry of Natural Resources has released the "Temporary Service Guidelines for Registration of Mineral Rights Mortgage", which unifies the application materials, processing procedures, review standards and certification styles for the registration of mineral rights mortgages across the country. The bank now has rules to follow and approvals are based on evidence. **Crack 3: Clarify the path to realize the mortgage right** Article 27 of the new law clearly stipulates that "mining rights can be mortgaged in accordance with the law", and stipulates that when the debtor fails to pay due debts, the mortgagee may receive priority payment from the proceeds from the auction or sale of the mining rights in accordance with the law. **Practical Case: Inspiration from the First Mining Rights Mortgage Loan** In September 2025, a coal mining company in Hunan Province successfully used the mining rights certificate as a mortgage to obtain a loan of 30 million yuan from a state-owned bank. This is the first mining rights mortgage loan in Hunan Province after the implementation of the new law. The key to the success of this enterprise is that: first, there is no ownership dispute over the mineral rights and the documents are complete; second, the evaluation report is prepared in advance and the bank recognizes it; third, a professional lawyer is hired to check the entire process and the materials are reviewed in one go. **Yingting Lawyer Reminder** Lawyer Liu Jingzhu of Beijing Yingting Law Firm pointed out that although the new law has opened the door to the policy of mineral rights mortgage loans, not all mineral rights can be mortgaged smoothly. The following points require special attention: 1. **Mineral rights must be "clean"**: there are no encumbrances such as seizure, mortgage, lease, etc.; 2. **The mine must be "minable"**: meet basic conditions such as safe production and environmental protection; 3. **The assessment must be "hard"**: select an assessment agency with qualifications and a good reputation; 4. **The contract must be "standardized"**: The terms of the mortgage contract must be strict to avoid ambiguity. If you are considering using mineral rights as collateral for a loan, it is recommended to consult a professional lawyer in advance and conduct due diligence to avoid getting half the result with twice the effort. Beijing Yingtong Law Firm has focused on mining legal services for more than ten years and can provide you with full-process legal support for mineral rights mortgage loans. (This article is for reference only. Please consult a professional lawyer for specific questions. This content does not constitute legal advice.)