mineral resources

[Practical Issues] A mining company in a certain province obtained mining rights through auction in 2020. Due to the long process of the local natural resources department, the transfer of mining rights has not been registered. In 2023, the company mortgaged its mining rights to the bank to obtain a loan, but only signed a mortgage contract and did not handle mortgage registration. In 2024, the third-party creditor seized the mining rights through the court. When the bank claimed that the mortgage rights should be paid first, it found that it was unable to fight against the third party because it was not registered. What’s even more troublesome is that after the implementation of the new Mineral Resources Law in July 2025, the mining rights registration system will undergo fundamental changes—from approval registration to property rights registration. Can the company’s mineral rights be preserved? Is the mortgage still valid? These questions urgently need clear answers.

[Analysis of laws and regulations] The new Mineral Resources Law, revised and passed on November 8, 2024, will be officially implemented on July 1, 2025. This law achieved a major breakthrough in the mining rights registration system and established a property rights registration system for mining rights for the first time.

According to Article 16 of the new law, exploration rights and mining rights are collectively referred to as mining rights, and a paid acquisition system is implemented. The core of the property rights registration system created by the new law is that the establishment, change, transfer, mortgage and elimination of mining rights will be effective if registered in accordance with the law; without registration, they will not be effective, unless otherwise provided by law. This means that mining rights are officially included in the real estate rights registration system and enjoy the same publicity and credibility as real estate.

This provision of the new law is in line with the provisions of the Civil Code on real estate registration, and realizes the functional transformation of mining rights registration from administrative review and approval to property rights publicity. Under the old legal system, mining rights registration was more of an administrative means for the state to set up mining rights; while the property rights registration system established by the new law focuses on protecting the private rights of mining rights holders, clarifying the ownership of rights, and settling disputes.

In addition, the new law also establishes a licensing system for mineral resource exploration and mining activities, clarifying that before mining rights holders carry out mineral resource exploration and mining operations, they must prepare an exploration plan and a mining plan respectively, and submit them to the original mining rights transfer department for approval to obtain an exploration license and mining license. This means that property rights registration and administrative licensing go hand in hand. Mining rights holders must obtain property rights registration to confirm their rights and obtain a license before they can operate.

[Related Case Analysis] In a mining rights transfer contract dispute case heard by the Supreme People's Court, a mining company in a certain province transferred mining rights to the transferee. The two parties signed a transfer contract and paid the price. However, due to local policy adjustments, the mining rights change registration has not been completed. Later, the transferor was sued due to other debt disputes, and the third-party creditor applied to the court to seal up the mining right, claiming that the mining right still belonged to the transferor's property. The transferee filed an enforcement objection, claiming that it had actually obtained the mining rights.

After trial, the court held that according to the principle of registration effectiveness stipulated in the law at the time, the transfer of mining rights without registration would not be effective as a change in property rights. Although the transfer contract is legal and valid, the transferee has only obtained the right to claim credit and has not yet obtained the property rights of the mining rights. The court ultimately rejected the transferee’s objection to execution. The gist of this ruling clearly states that the acquisition and transfer of mining rights require registration to be effective. Without registration, it cannot be used against bona fide third parties.

This case has important reference significance for the new Mineral Resources Law that will be implemented soon. The new law has strengthened the effectiveness of property rights registration. Mining rights holders should attach great importance to registration matters and handle various registration procedures in a timely manner to avoid losing the opportunity to protect their rights due to lack of registration.

[Lawyer’s View] The mining rights and property rights registration system established in the new Mineral Resources Law is one of the highlights of this law revision, and it is also a major change that mining rights holders must pay close attention to. Based on the above legal analysis and case study, the author believes that:

The registration of mineral rights and property rights has the effect of establishing rights. Mining rights are usufruct rights, and their establishment requires registration as a requirement for their validity. Mining right holders should promptly complete the first registration and obtain confirmation of their rights in the sense of property law.

Unregistered mining rights are at risk of being seized. If the prior right holder has not registered, his rights cannot be opposed by a subsequent bona fide third party. Mining rights holders should sort out their registration status as soon as possible and check for any omissions.

First, immediately carry out self-examination of mineral rights registration. For mining rights that have not yet been registered for the first time, apply for registration to the natural resources authority as soon as possible; if the registration items change, the change registration must be completed in a timely manner.

Second, improve the mortgage registration procedures. If a mortgage contract has been signed but has not been registered, the mortgage registration should be completed as soon as possible to ensure the publicity effect of the mortgage rights and prevent the risk of being pursued by other creditors.

Third, establish a registration management ledger. After the new law comes into effect, it is recommended that mining companies establish a special management system for mineral rights registration matters and designate a dedicated person to be responsible for tracking and handling registration matters to avoid damage to rights due to negligence.

The establishment of the mining rights and property rights registration system marks the entry into a new stage of my country's mining legal system. Mining rights holders should fully understand the far-reaching impact of this system change, take timely response measures, and effectively safeguard their legitimate rights and interests.

——Lawyer Liu Jingzhu, Beijing Yingting Law Firm

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