CHINESE MINING LAW OVERVIEW (1)

The Mineral Resources Law of the People's Republic of China ("PRC") was adopted in 1986, with subsequent regulations being promulgated in 1993 and 1994. All mineral resources belong to the State, pursuant to the Chinese Constitution. The State Council (the Executive Cabinet) exercises control over the mineral resources on behalf of the State. With recent changes in the principal mining laws and related laws and regulations, the government hopes to encourage foreign exploration and exploitation mineral projects, to meet its economic expansion needs and, thereby achieving national economic and social objectives. Recent mineral investment activities and production statistics indicate movement in that direction, with some disappointments. Foreign investment still lags, but government changes in mining regulations continue in an attempt to attract further investment, while at the same time protect State interests. New discoveries encourage continued interest in the vast, untapped resources of the country.