Case Brief

Company L (hereinafter referred to as "L"), located in Wuming District of Nanning City of Guangxi Zhuang Autonomous Region, is a private enterprise with the exploration and development of mineral resources as its main business. In 2007, L, through the transfer of the original right holder, obtained the exploration right of the 2.79-square-kilometre copper-lead-zinc-tungsten mining area near Daming Mountain. Then, L applied to extend and retain the prospecting right in 2008, 2010 and 2021. When L applied for the third retain of the prospecting right, the Natural Resources Department of Wuming District claimed that part of the mining area overlapped with the ecological red line and needed to be deducted. L agreed to deduct overlapping areas, and subsequently, the mining area became 1.50 square kilometers. In July 2022, L applied for the conversion of prospecting right to mining right (hereinafter referred to as the "prospecting to mining" application) to Guangxi Zhuang Autonomous Region's Department of Natural Resources (hereinafter referred to as "the Department of Natural Resources") within the scope of the delineated mining area. However, the Department of Natural Resources decided not to approve the application, citing that the applied area was in the Daming Mountain Ecological Protection Zone, close to the boundary of the Daming Mountain National Natural Reserve.

Handling Process

From the very beginning, considering that the other party is a government agency, L was quite hesitant during legal consultation and finally decided to entrust us only two days before the deadline for the administrative reconsideration application. Due to time constraints, after accepting the entrustment, we fully listened to the client's statement of the fact, analyzed and assessed systematically the relevant documents, such as the contract of prospecting right, retain records of mineral exploration license, mining area graph, the graph of the overlapping area and so forth. Initially, we were determined to claim mining rights through administrative reconsideration. But before we started working on the reconsideration application, we needed to determine the right department to submit our application to, that is, whether to submit the reconsideration application to the Ministry of Natural Resources of the People's Republic of China (hereinafter referred to as "the Ministry of Natural Resources") or to the Guangxi Zhuang Autonomous Region People's Government.

Eventually, we suggested to the client to select the Ministry of Natural Resources as the reconsideration department for the following reasons:

First, from the “professional” aspect, the Ministry of Natural Resources, compared with local government, is more professional and less influenced by local political, economic and other factors and therefore can be more impartial to protecting the legitimate interest of our client.

Second, from the geographical aspect, our firm is located in Beijing so there would be “home court advantage” for us to submit the reconsideration application to the Ministry of Natural Resources, which is also located in Beijing.

Then, from the substantial aspect, we believed that the focus of this case was whether it was legal to prohibit mining in the mining area adjacent to the natural reserve, which fell exactly into the purview of Ministry of Natural Resources.

Having clarified the crux of the dispute, we conducted a large number of data analysis and legal research with the logic of "from facts to law".

Firstly, from the factual aspect, according to the graph of the overlapping area and the third retain record of prospecting right provided by L, it could be known that L had deducted the area overlapped with the ecological red line under the Natural Resources Department of Wuming District's notice.

Secondly, from the legal aspect, we claimed that according to Article 26 of Regulations of the People's Republic of China on Natural Reserves and Article 20 of Regulations of Nanning City on the Protection and Management of Daming Mountain, “In nature reserves, such activities as felling, grazing, hunting, fishing, gathering medicinal herbs, reclaiming, burning, mining, stone quarrying and sand dredging, shall be prohibited unless otherwise stipulated by relevant laws and regulations.” We concluded that China only prohibits mining activities "in" nature reserves and does not restrict and prohibit mining activities "close to" nature reserves. Therefore, we believed that it was unlawful that the Department of Natural Resources didn't approve L's "prospecting to mining" application on the grounds that the delineated area was close to the boundary of Daming Mountain National Nature Reserve.

To make our reconsideration application more comprehensive and reasonable and raise the chance of adoption by the reconsideration department, we also proceeded from the legality of the "prospecting to mining" application and demonstrated that L not only had the right to apply for "prospecting to mining", but also had the priority to obtain the mining right on the delineated mining area in this case. We claimed that according to Article 6 of the Mineral Resources Law of the People's Republic of China and Article 16 of the Rules for the Implementation of the Mineral Resources Law of the People's Republic of China, L had the priority to obtain the mining right on the delineated the mining area and the original decision shall be rescinded.

Case Result

The Ministry of Natural Resources decided to rescind the Decision not approving the delineated mining area given by the Department of Natural Resources, and ordered it to make a new decision.

Even though under an extremely tight schedule, our team adhered to the principle of "protecting the legal rights and interests of the party to the maximum", completed a high-quality legal debate with our rich experience, professional skills, and meticulous attitude, and finally protected the client’s valuable mining right.

（Lead Lawyers: Matthew King）