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Henan Cancelled Regional Restriction on Bauxite Resources Allocation for Aluminum Oxide Enterprises

Henan Province People’s Government recently printed and issued notice to announce the decision to adjust Henan’s key mineral resources allocation policy. Why should the mineral resources allocation policy need adjustment, what’s new about the new policy? On March 20, with these questions in mind the journalist paid a special visit to Sheng Guomin, Director of Henan Province Land and Resources Bureau.

“The most prominent thing is the across-the-board adjustment of the transfer method of key mineral resources in Henan Province, and let the market decide resource allocation.” Sheng Guomin said.

The new policy prescribed that, excluding the following 4 kinds of circumstances which permitted transfer of mining right through agreement method, now paid transfer in market way would be adopted uniformly: Key mineral resources development projects approved by the State Council and mineral producing areas for providing supporting resources to key construction projects approved by the State Council; adjacent areas with mining rights which need to integrate or utilize original production system to expand prospecting and mining scope; projects already with exploration right which needs integration or cases in which nearby scattered resources are involved due to expanded scope of overall prospecting; and pre-allocated mineral resources projects and resources integration projects that have been approved by the provincial government before this notice was distributed.

Up till now, Henan has developed a package of relevant policy systems, and proposed “For the provincial-wide exploration right, it will no longer implement the policy that high risk prospecting ore varieties can apply for prioritized acquisition, instead all must adopt market method in transfer”, but it also proposed the restrictions that “Excluding provincial advantageous mining enterprises, no new mining right for coal, bauxite, and molybdenum mine varieties will be granted to other main bodies.” Furthermore for singly preserved coal, bauxite and molybdenum mines, it would enforce “Three no” policy of no expansion of boundary, no expansion of reserve, and no addition of service life, since the marketized degree of key mineral resources allocation was relatively low. This time’s new policy marked a significant measure adopted by our province in fully implementing “Market plays decisive role in the allocation of key mineral resources”.

“The second big change is appropriate relaxing transferee qualification of coal and aluminum resources, in other words it adjusts the scope of enterprise qualification for taking part in competition of coal aluminum resources market.” Sheng Guomin said.

The new policy proposed that in the aspect of coal resources transfer, resources would be allocated mainly to coal backbone enterprises, it supports and encourages downstream enterprises such as electricity enterprises, and electrolytic aluminum enterprises to participate in coal project joint prospecting and development in the form of shareholding.

In the aspect of bauxite resources allocation, it proposed to cancel regional restriction policy for aluminum oxide enterprise in bauxite resources allocation. Support and encourage coal enterprises and aluminum oxide enterprises to explore and develop bauxite resources underneath coal-bed through join venture. For other mineral resources excluding coal and bauxite such as Molybdenum mine, follow the law to handle formalities for ore variety alteration, mining right transfer and approval registration for changing exploration right to mining right.

Sheng Guomin said coal resources transferee would be appropriately relaxed to include coal downstream enterprises such as electricity enterprises, and electrolytic aluminum enterprises, regional restriction would be canceled for bauxite resources allocation, large and medium sized bauxite mineral deposit would be expanded to include large aluminum silicon refractory material enterprises, small bauxite mineral deposit would be open to the public, these measures can better bring out the government’s regulation role for important mineral resources.

After 10 years of resource integration, the production added value of the whole province’s mineral resources mining and dressing industry, and mineral raw material processing product industry recorded annual average growth of 22.7% and 32.1% respectively, mining deployment tended to become rational, the intensive and economical standard of resources has showed obvious improvement, the mineral development pattern in which large mining groups take up dominating position, and large, medium and small sized mines acquire coordinated development has initially taken shape.

However, with changes in the international mineral product market, and adjustment in national mineral resources policy and development of our province’s mining economy, some problems have gradually emerged, in particular both size and quantity of marketized allocation resources are seriously inadequate, market function is weak, transfer of key mineral producing areas is not open to the market, all these problems prompted our province to intensify efforts in policy adjustment.

The Provincial Land and Resources Bureau began to dispatch personnel to visit key mineral producing areas in Henan for survey and study since March last year, and earnestly straightened out and analyzed mineral resources allocation policy; the draft of new policy has solicited opinions from 17 government departments and advantageous mining enterprises.

The new policy also proposed to drive forward the transformation of mineral resources utilization and management approach, and establish our province’s key mineral resources management joint meeting system, clarified the responsibilities of all related departments and governments at all levels. “The new policy of key mineral resources allocation signifies that our province’s management of mineral resources has entered a new normal stage.” Sheng Guomin said.