Articles
Minerals Mining Law: The Gap Filled

27/06/2012
By Vo Huu Tu, Legal Assistant

To strengthen the management of mineral mining, on 17 November 2010, Vietnam enacted the Law on Minerals (LOM), aiming to draw international interests and foreign investment to the country's mining sector.

The LOM did not cover (i) auctions of mineral mining rights, (ii) selection of entities for issuance of mineral exploration license (IOMEL) in an area not subject to auction of mineral mining rights, (iii) the transfer of mineral exploration right, and (iv) the transfer of rights to mine minerals.

To fill the gap the Government promulgated Decree No. 15/2012/ND-CP (Decree 15) on March 9 and Decree No. 22/2012/ND-CP (Decree 22) on March 26.

Auction of mineral mining right

To participate in an auction session an entity is required to submit an application along with a deposit and auction fee.

If an entity that wins an auction but refuses to accept the results that entity is prohibited from participating in any auction session for a period of one year.

The entity winning an auction is forbidden from assigning the auction winning results to another entity.

Selection of entities for IOMEL in an area not subject to auction of mineral mining rights

Under Decree 15, after meeting the requirements as prescribed by the LOM, and after 30 days of the receipt and notification of entities requesting a mineral exploration license, the selections of entities for IOMEL will be conducted as follows:      

(a)           if only one entity has submitted a dossier proposing mineral exploration, that entity will be selected for IOMEL; 

(b)           if two or more entities have submitted their dossiers proposing mineral exploration, the entity to be selected will be the one that satisfied the largest number of conditions as set out in Decree 15, in particular

(i)             having the largest ratio of equity over the total invested capital to implementation of the mineral exploration proposal;

(ii)            having capital contributed in the conduct of the basic geological survey of mineral resources in the area proposed for IOMEL; and

(iii)           having a commitment to exploit and use the mined minerals for local manufacturing activities;

(c)           if every entity that submitted dossiers meets the conditions as stipulated in (b) above, the entity with the earliest dossier submission will be selected for IOMEL.

Transfer of mineral exploration rights

A transfer of mineral exploration rights must be made in the form of a contract. In addition, the entity receiving the transfer of the rights must

(a)           satisfy the legal status as stipulated by the LOM or have a contract signed with the entities holding the right for mineral exploration;

(b)           have, at the time of transfer, no disputes on rights and obligations related to mineral exploration activities; and

(c)           have submitted proper dossiers to the competent authority to effect the transfer.

Transfer of right to mine minerals

The transfer of a right to mine minerals must be made in the form of contract including details of the operations, responsibilities of the transferee for continuous performance, and other relevant rights and obligations.

Decree 15 took effect on 25 April 2012 and Decree 22 takes effect on 15 May 2012.

(*) Please contact the authors at tu.vo@indochinecounsel.com or our partners if you wish to have more information or specific advice for the topic of this article.

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