To duly improve the investment environment of the mining sector and further open the mining sector, especially the solid minerals market, the Chinese government has decided to encourage more foreign investment in the exploration and development of non-oil-and-gas mineral resources, said Gan Zangchun, director general of the Department of Policy and Legislation under the Ministry of Land and Resources, in Beijing Thursday.
In 1997, according to Gan, only US$940 million of foreign direct investment went to the excavation sector and most of them were in oil and gas exploration. There was little money putting into the exploration and development of non-oil-and-gas mineral resources. This is by no means compatible with China's status as a big mineral resources country, said Gan.
To solve the problems facing foreign investors, such as the unclear exploring and mining rights of non-oil-and-gas mineral resources, overlapping procedures for checking and approving foreign investment, preferential taxation policies, difficult ways to obtain necessary geological materials and interference of local governments, the Ministry of Land and Resources, together with the State Development Planning Commission, State Economic and Trade Commission, Ministry of Finance, Ministry of Foreign Trade and Economic Cooperation and State Administration of Industry and Commerce, after a profound investigation and study, formulated a document entitled Several Suggestions for Further Encouraging Foreign Investment in the Exploration and Development of Non-Oil-and-Gas Mineral Resources. The document is officially published today.
According to the document, China will further open the exploration and mining rights market of non-oil-and-gas resources. Foreign companies, their agencies and representative offices are allowed to carry out risk exploration of non-oil-and-gas resources in China either by making sole investment or cooperating with their Chinese partners. Also, China will provide greater support for foreign investors in the exploration and development of these resources with relevant incentives clearly defined. Special encouragement will be given to foreign investment in the western regions for developing non-oil-and-gas mineral resources. The management and service in this respect are also standardized and improved.
Gan said that many successful experiences in exploring and developing oil and gas were employed in drawing out the document, for example, in the taxation of exploring cost and preferential taxation policies in importing and exporting equipment for geological survey. The implementation of this document will greatly improve China's environments for foreign investors.
China also welcomes foreign investment to concrete working fields so as to improve the efficiency and safety of mining sectors.
Meanwhile, Gan pointed out, like most countries do in the world, China will take restrictive or protective measures in mineral resources which will affect the national strategic security. For instance, uranium, a kind of strategic mineral resource, is forbidden to open to foreign investors.
(CIIC 12/14/2000)
