Chinese government has approved the establishment of China Mining Lianfa Auction Company, the first state-level company that gives foreign investors access to the mining rights to the country's abundant mineral resources.
The company will begin business with investors from at home and abroad for the surveying and exploitation of mineral resources in China later this year, a company executive said Wednesday.
The China Mining Association (CMA) will be the principal shareholder of the new company which has a total registered capital of 10 million yuan (US$1.2 million).
Foreign investors can bid for the mining rights through their branch companies registered in China or joint ventures, said Wang Yanguo, president of the auction company.
"It is time for foreign investors to have full access to China's mining market now," said Wang, who is also secretary-general of CMA.
Wang said the company would take charge of the evaluation of mineral resources, the release of authoritative information and the examination of the bidders' qualifications.
In the past, the Chinese government awarded most of the mining rights for free to designated domestic mining companies, and it was very difficult for foreign investors to gain those rights.
With its entry into the World Trade Organization last year, China decided to open its mining market to foreign investors.
Deputy Minister of Land and Resources Shou Jiahua said last week China would replace the administrative examination and approval of mining rights with public bidding and auctioning.
In August, China auctioned the mining rights to a gold mine for the first time in eastern Jiangxi Province.
In March, Australia's Griffin Mining Company, through its joint venture in Hebei Province, got the first mining license to solid minerals exploration in China.
Currently, foreign capital has access to the exploitation of mineral resources including gold and rare earth. However, the government still controls the mining rights to strategic mineral resources like uranium.
Industry sources said opening the mining market to foreign investors will benefit the mining industry that is in great need of capital and advanced technology.
(Xinhua News Agency October 31, 2002)
