mineral resources

After a mining company acquired a mining right, it only focused on the registration of changes to the mining license, but ignored the property rights registration of the mining right. Three years later, due to local policy adjustments, the area around the mining area was included in the ecological protection red line. On this basis, the local natural resources department announced the withdrawal of its mining rights. The person in charge of the company was puzzled: He clearly held a mining license, but why was the mining right taken back for free? This involves a core issue that has long been confused in mining practice - what is the essential difference between a mineral rights certificate and a mining license?

According to the Mineral Resources Law of the People's Republic of China revised in 2024 (hereinafter referred to as the "New Mineral Resources Law"), mining rights include exploration rights and mining rights, collectively referred to as mining rights. A major institutional innovation of the new law is to separate the property rights registration of mining rights from mineral resource exploration and mining licenses.

Article 22 of the new law clearly stipulates that when establishing mining rights, one must apply for mining rights registration to the mining rights transfer department. If the registration conditions are met, the mining rights transfer department shall record the relevant matters in the mining rights registration book and issue a mining rights certificate to the mining rights holder. Article 33 also stipulates that after obtaining the mining rights, before carrying out mineral resource exploration and mining operations, the mining rights holder shall prepare an exploration and mining plan, submit it to the original mining rights transfer department for approval, and obtain an exploration license and mining license. Without obtaining a license, exploration and mining operations are not allowed.

This provision has completely changed the previous historical model of "one certificate containing two rights". Under the old legal system, mining licenses carried the dual functions of property rights publicity and administrative licensing; while the new law makes it clear: the mining rights certificate is a legal document confirming the physical rights of mining rights and belongs to the category of civil property rights; the mining license is an administrative license that allows companies to implement specific mining activities, which falls under the category of public law licensing. The two have different properties, different functions, and different scopes of effectiveness.

In judicial practice, disputes arising from the confusion of mineral rights certificates and mining licenses are not uncommon. In a mining rights recovery and compensation case heard by a provincial high court, the company involved held a legal mining license, but there were flaws in the registration of mineral rights. When the local government took back the mining rights on the grounds of overpressing the mining area, the two parties had major differences over the scope of compensation. The company advocates that compensation be calculated based on the resource reserves stated in the mining license, while the government believes that it only needs to be compensated for the exploration costs that have been invested.

The court ultimately determined that the property rights validity of mining rights is subject to the registration of mining rights, and the mining license itself cannot alone be used as the basis for claiming complete property rights of mining rights. The company involved in the case had flaws in the integrity of its rights because it had not completed the standardized property rights registration of its mining rights. The final judgment partially rejected the plaintiff’s claim for compensation for the value of its mining rights. This case clearly sends a signal: holding a mining license does not necessarily mean that you will fully enjoy all the property rights of the mining rights.

Based on the above legal analysis and case study, the author believes that correctly distinguishing mineral rights certificates and mining licenses is crucial for mining rights holders to safeguard their legitimate rights and interests. In practice, many companies have a common misunderstanding: holding a mining license is equivalent to full enjoyment of mining rights, ignoring the independent legal significance of property rights registration.

First, after obtaining the mining rights, the mining rights holder should promptly apply to the mining rights transfer department for property rights registration and obtain the mining rights certificate to ensure the publicity and effectiveness of the rights to the world. Mining license changes and mineral rights registration should not be confused.

Secondly, when major matters such as mining rights recovery and compensation are involved, complete property rights and interests should be claimed based on the scope of rights stated in the mining rights certificate, rather than relying solely on the mining license for defense.

Third, during the process of mining rights transactions and mergers and acquisitions, companies should simultaneously review the property rights registration status and mining license status of the target mining rights, and if necessary, entrust professional lawyers to conduct due diligence to avoid subsequent investment failures due to rights flaws.

——Lawyer Liu Jingzhu, Beijing Yingting Law Firm

*Please consult a professional lawyer for specific questions. This content does not constitute legal advice. *