mineral resources

Building a railway must pass through your mining area, and building a road must occupy your mineral rights. When encountering this situation, the first reaction of many mine owners is "it's over", and the second reaction is "how much compensation can be paid".

In the past, the biggest problem with overburden compensation was that the scope was unclear. The construction unit said that this would not be compensated and that was not within the scope, which made the mine owner very passive. The "Notice on the Management of Mineral Resources Covered by Construction Projects" just issued by the Ministry of Natural Resources on July 7 finally clarified the scope of compensation.

I’ve broken down 5 money claims for you that you can claim with clear evidence.

The first tranche: Proceeds from the transfer of mining rights (price)

The transfer income or price you paid when you obtained the mineral rights is your most basic asset investment. The new regulations clarify that the paid mining rights transfer income shared by the suppressed mineral resources falls within the scope of compensation.

**Practical Points**: Note that it is the "shared share of overburdened mineral resources", not all. For example, if only 30% of your mining area is destroyed, then the transfer proceeds will be claimed at a rate of 30%.

The second tranche: exploration investment

Anyone who works in the mining industry knows that investment in exploration can easily cost millions or even tens of millions. Drilling, geophysical prospecting, geochemical prospecting, channel prospecting... these are real money. If the mine is overturned, the exploration investment must be included in the compensation.

**Practical Points**: Be sure to keep complete records of exploration investment, including contracts, invoices, workload reports, and results reports. Many mine owners do not pay attention to this and cannot provide evidence when they want to make a claim.

The third tranche: investment in established mining facilities

If you have already built mining facilities in the mining area - mineral processing plants, transport roads, power supply and water supply systems, mining area office facilities, etc., these investments must be included in the scope of compensation.

**Practical points**: Facility investment should be distinguished between "built" and "planned". Investments that have already been built can be advocated, but those that are still in the planning stage are difficult to obtain support for. It is recommended to conduct a complete asset assessment of the investment in already built facilities as soon as possible.

The fourth payment: Interest loss

The new regulations specifically mention "interest". The money you invest has a capital cost. If the money is placed in the bank or used for other investments, there will be returns. Interest compensation can be claimed for the capital occupation losses caused by the mine being overturned.

**Practical Points**: The interest calculation standard can refer to the bank loan interest rate or LPR for the same period. It is necessary to write interest into the compensation plan during the negotiation stage, and don’t think of it until the litigation stage.

The fifth payment: Relocation facility costs

If overburden results in the need to relocate mining facilities, relocation costs are also part of the compensation coverage. Including equipment disassembly, transportation, reinstallation, debugging and other costs.

**Practical Points**: The evaluation of relocation costs must be done by a professional agency. Your own quotation is likely to be questioned by the other party. The new regulations also encourage both parties to jointly entrust a third-party evaluation agency.

There is another important rule: compensation fees are included in the project construction cost

The new regulations clearly require that compensation fees for overburden should be included in project construction costs. what does that mean? The construction unit cannot treat the compensation as "additional expenditure" to bargain with you, because this money should originally be part of the project cost.

Yingting lawyer reminds

The new regulations also mention a very important supporting measure: the natural resources authorities at or above the provincial level should formulate compensation guidance standards and provide query services for a database of practical cases for compensation of overburdened mineral resources. This means that there will be a "reference price" for compensation in the future, and it will no longer depend entirely on the game between the two parties.

However, during the current window period, the compensation standard has not yet been fully implemented. It is recommended that mine owners who encounter overburden problems:

• **Fix evidence immediately** - complete materials for exploration investment and facility construction
• **Proactively request joint entrustment of assessment** - Do not accept the other party's unilateral assessment
• **Make good use of the new regulations to clarify the scope of compensation** - none of these 5 sums of money can be missing
• **If negotiation fails, take legal channels promptly**—administrative review or litigation

Beijing Yingting Law Firm specializes in mining rights legal services and helps mining companies strive for reasonable rights and interests in overturning compensation.