Beijing Yingtong Law Firm has focused on the protection of the rights and interests of private enterprises for many years. It has represented many corporate rights protection cases in the legal practice of rights protection in natural resources, mining, land, waters, territorial space, corporate equity, criminal defense, factory demolition, environmental protection shutdown, prohibition and vacation, etc., including large-scale real estate...
Spending 50 million to buy a time bomb - a painful lesson in mining rights acquisition
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Article author：Yingting Lawyers Group | Update time：1970-01-01 | Reading times：58
"Mr. Wang, what's going on with the mine you purchased for 50 million last month?"
"Don't mention it, my intestines are full of regret now..."
This is the true experience of a client that lawyer Ying Ting recently received.
Case background
In 2023, Mr. Wang of a mining company in Hebei was introduced to the prospecting rights of an iron ore in Inner Mongolia:
- Mineral type:iron ore
- Amount of resources:Preliminary estimate is about 5 million tons
- Purchase price:50 million yuan
- Transaction method:Equity acquisition
The problem gradually came to light
Month One: Discovering Mortgage
The mining rights have been mortgaged to a small loan company! The mortgage amount is 30 million yuan.
Second month: Arrears discovered
The unpaid mining rights transfer income is 12 million yuan! This is a historical debt, and it is now recovered in the name of the company.
The third month: Disputes discovered
There is a land ownership dispute in the village. When the seller obtained the mineral rights, the land compensation was never paid.
The "pits" that acquirers have stepped on
- Failure to do adequate due diligence——Believing the seller’s verbal introduction
- Believe in "relationship"——The seller said “I have connections locally”
- eager to close a deal——The entire transaction took less than two months
- ignore risks——Friends reminded me that the price is too cheap
final result
In order to solve these problems, Mr. Wang made additional expenditures:
- Repay mortgage debt: 30 million yuan
- Additional transfer income: 12 million yuan
- Resolve land disputes: 8 million yuan
- Lawyer fees, litigation fees, etc.: 3 million yuan
Total additional expenditure: 53 million yuan!Including the purchase price of 50 million yuan, 103 million yuan has been invested.
Yingting Lawyer Comments
This case is a typical mining rights acquisition “trap” case, covering all common risk points:
- Tenure risk——Mining rights are mortgaged
- debt risk——Historical arrears
- Compliance risk——Land disputes
Bloody lesson: Due diligence before acquiring mineral rights is the best way to protect yourself!
Previous article：A complete guide to mineral rights mortgage registration: operating procedures and pitfall avoidance guidelines under the new regulations
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