Law amending the Law on Minerals 2005, No. 46/2005/QH11

LAW

ON AMENDMENT OF AND ADDITION TO A NUMBER OF ARTICLES OF THE MINERAL LAW

Pursuanttothe1992ConstitutionoftheSocialistRepublicofVietnamasamendedbyResolution51/2001/QH10 passedby Legislature X of the National Assembly at its 10thSession on25 December2001;

ThisLawamendsandaddstoanumberofarticlesoftheMineralLawpassedbytheNationalAssemblyof the Socialist Republic of Vietnam on 20March 1996.

Article 1.A number ofarticles of theMineralLawshallbe amendedand added to as follows:

1. To amend and add to article 2 as follows:

"Article 2.Governing scope and applicable entities

1. This Law governs theadministration, protection and basic geological surveys of mineral resources,andmineralactivities(comprisingprospecting,exploration,miningandprocessing ofminerals)insolidandgaseousforms,mineralwaterandnaturalthermalwater,exceptoil and gas and other types ofnatural water which shallbe subject to separate legalregulations.

2. This Law shall apply to State bodies exercising State administration of minerals; to organizationsconductingtasksofbasicgeologicalsurveysofmineralresources;todomestic organizationsandindividuals,foreignorganizationsandindividuals,andVietnameseresiding overseasconductingmineralactivitiesinVietnam;andtootherorganizationsandindividuals involved in the administration andprotection of mineral resources.

If any international treaty to which the Socialist Republic of Vietnam is a member contains provisionswhicharedifferentfromthoseinthisLaw,thentheprovisionsofsuchinternational treaty shallapply."

2. To add a new article 3aasfollows:

"Article 3a.Principles formineral activities

Activities of prospecting, exploration, mining and processingof mineralsmust comply with the following principles:

1. Mineral resources must be protected, mined and used reasonably, economically and efficiently,andmustsatisfytherequirementsforstablesocio-economicdevelopmentbothin the short term and the long term.

2. Mineral exploration,andthe mining,processing and use of minerals must comply withthe master plan approved by the competent State body; they must ensure safety and labour hygiene;theremustbecloseco-ordinationonprotectionoftheenvironment,ofothermineral resources, of the landscape and historical and cultural sites;there mustbe creation of conditionstostabilizeanddevelopinfrastructure,andtoimprovelivingconditionsofcitizensin localities where mineralsare mined andprocessed;and they must ensure national defence and security, social orderand safety.

3. Thescaleandtechnologyofminingandprocessingofmineralsmustbeconsistentwiththe special features of eachtype of mineral, taking socio-economic effectiveness as the basic criterion for making investment decisions;applying appropriate, progressive mining and processingtechnology to maximize the recovery co-efficient of both themain mineral and associatedmineralsandthevalueofprocessedproducts;andraisingtheeffectiveness,quality and competitiveness of mineralproducts."

3. To add a new article 3basfollows:

"Article 3b.Master planning forminerals

1. Masterplanningformineralsshallbeformulated foreachterritoryandforeachtypeofmineral, and shall comprise:

(a) A master plan for basic geological surveys of mineralresources;

(b) A master plan for exploration, mining, processinganduse of minerals.

2. Authority to approvemaster planning shall be regulated as follows:

(a) TheMinistry ofNatural Resourcesand Environment shallformulatethemaster planfor basic geological surveys of mineral resources and submit it to theGovernment for approval; andshall directand organizeimplementation of the master plan;

(b) The Ministry of Industry shall formulate the master plan for exploration, mining, processinganduse of minerals, except for mineralsas construction materialsand except for mineralsas raw materials forproduction of cement, and submit it to the Government for approval;

(c) The Ministry of Construction shall formulate the master plan for exploration, mining, processingand use of mineralsas constructionmaterials and of minerals as raw materials forproduction of cement, and submit it to the Governmentfor approval;

(d) People s committees of provinces and cities under central authority shallformulate masterplansforexploration,mining,processinganduseofalltypesofmineralswithin theirauthoritytoissuelicencesasprescribedinarticle56.1(b)ofthisLaw,andsubmit them to the same level people s councilto pass.

3. TheGovernment shallprovide regulationson formulation and implementation ofmaster planning forminerals."

4. To amend and add to article 5 as follows:

"Article 5.Policy of theState onminerals

1. TheStateshallinvestinmasterplanningforbasicgeologicalsurveysofmineralresourcesin conformitywiththesocio-economic strategy,master plananddevelopmentalplansforeach period; in training and development of manpower; in scientific research and in the development and application of technologyduring the work of basic geological surveys of mineral resources.

2. TheStateshallcreatefavourableconditionsforallorganizationsandindividualstoparticipate in investmentin the exploration, miningand processing of minerals.

3. The State shall encourage investment and grant preferential treatment to miningprojects associatedwithon-siteprocessingofmineralsinareaswithdifficultsocio-economicconditions and in areas with specially difficult socio-economic conditions; to projects applying modern techniquesandtechnology,protectingtheenvironment,maximizingtherecoveryofbeneficial components, producingmetal and metal alloyproducts orproducts of high socio-economic value and efficiency; and to projects for processing imported minerals which satisfy the requirementsfor domesticuseand export.

4. Theexportofmineralsinthe formofcruderawmaterialsororeconcentrateshallberestricted. TheGovernment shallissue the list, conditions and criteria of minerals permitted to be exported, andthe list of minerals whoseexport is restricted.

5. TheState spolicyistoinvestinexplorationofanumberofimportantmineralsservicingthe socio-economicdevelopmental plans for the whole country,and toensure funding fromthe State Budget for the workofprotection ofmineral resources.

6. TheStateshallprotectthelawfulrightsandinterestsoforganizationsandindividualsduring mineralactivities; and encourages such organizationsand individuals to purchase business insurance for activities ofexploration, mining and processing of minerals."

5. To amend and add to article 8 as follows:

"Article 8.Conduct which is strictlyprohibited

The State strictly forbids the following conduct:

1. Illegalbasicgeologicalsurveysofmineralresources;illegalprospecting,exploration,mining, processing, storing, transporting, purchase and saleofminerals.

2. Breachesofmasterplansformineralsandofareasinwhichmineralactivitiesarebannedor temporarilybanned.

3. Failuretoproperlydischargeobligationsinaccordancewitharticles23,27,33,46and52of this Law during mineralactivities.

4. Disclosure of information inthe category of State secrets aboutmineral resources.

5. Abuse of position or power in order to actcontrary to the law on minerals.

6. Otherconduct whichis strictlyprohibited by the law on minerals."

6. To amend and add to article 9 as follows:

"Article 9Protection ofmineral resources

1. TheMinistryofNaturalResourcesandEnvironmentshalldelineatethezonesinwhichmineral resourceshavealreadybeeninvestigatedandassessed,andshallnotifysuchzonestothe people scommitteeoftheprovinceorcityundercentralauthorityforthelattertoadminister and protect suchzones.

2. People scouncilsandpeople scommitteesatalllevelsshall,withinthescopeoftheirduties and powers, be responsible to carryout measures for the protection of mineral resources withintheirrespectivelocalities,includingareasinwhichmineralsarediscoveredbutwhich are notzones already notified by the Ministry of Natural Resourcesand Environment.

3. All organizations and individuals shall have the right and obligation to protect mineral resourcesand to guard State secrets inrelation to mineralresources.

4. Organizations and individuals permitted to conduct mineralactivities shallbe responsible to protect mineral resourcesin the areas inwhich they are operating.

5. Organizations and individuals whoformulate constructionmaster plansfor concentrated residential zones and forfixed building works inareas containing mineral resources which havealreadybeeninvestigatedandassessed,orinareaswhichhavealreadybeenexplored and the mineral reserves have been approved, must also include the written opinion of the State administrative body for minerals whichis authorized by article56.1 of this Law.

TheGovernmentshallprovideregulationsonformulationandapprovalofconstructionmaster plansforworksofnationalsecurityanddefenceinareascontainingmineralresourceswhich have already been investigated andassessed."

7. To amend and add to article 41 as follows:

"Article 41Mining and processing ofmineralsas common constructionmaterials

1. The activities of mining and processing mineralsas common construction materials must comply withthe provisionsof this Law relating to mining minerals.

2. Theminingandprocessingofmineralsascommonconstructionmaterials,exceptforriver-bed sandandgravel,withaminedoutputnotinexcessof100,000m³/yearandaminingduration including extensions not in excess of five years shall not be subject to compulsory mineral exploration.

3. Thefollowingcasesofminingandprocessingofmineralsascommonconstructionmaterials shallnot require an application for a mining licence:

(a) Miningofmineralsascommonconstructionmaterialswithinthescopeofanareaof landforaninvestmentprojectforconstructionofworkswhichhasbeenapprovedor permittedbythecompetentStatebodywheretheminedproductwillonlybeusedforconstructionofsuch works.

Priortocommencingminingofminerals,theorganizationwiththerighttomineshall register the miningarea, output, volume, method, equipment and plan with the people scommitteeoftheprovinceorcityundercentralauthority.Theadministration anduse of mined mineralsshallbe implemented inaccordancewith law;

(b) Miningofmineralsascommonconstructionmaterialswithinthescopeofanareaof landwhichafamilyhouseholdorindividualusesinaccordancewiththelawonland where the mined product willonly service construction by suchfamily householdor individual.

4. The Government shall issue a list of minerals which are categorizedas common construction materials."

8. To add a new article 43aas follows:

"Article 43aMiningofmineralsinareaswherethereisaprojectforinvestmentandconstructionof works

1. Miningofmineralsinareaswherethereisaprojectforinvestmentandconstructionofworks, except for theworksprescribed in clause2 ofthis article, shall be implemented as follows:

(a) Inthecaseofazoneinwhichmineralresourceshavealreadybeeninvestigatedand assessed,orazoneinwhichmineralresourceshavenotyetbeeninvestigatedand assessedbutinwhichmineralshavebeendiscovered,thentheStatebodyauthorized toissuealicenceformineralactivitiesprescribedinclause1ofarticle56ofthisLaw shallissueadecisiononexplorationasthebasisforgrantingpermissionformining prior to approval of the investment project or issuance of permission for the investment;

(b) Inthecaseofazoneinwhichmineralresourceshavenotyetbeeninvestigatedand assessedbutinwhichmineralsarediscoveredduringthebuildingprocess,thenthe Statebodyauthorizedtoissuealicenceformineralactivitiesprescribedinclause1of article56ofthisLawshallissueadecisiononpermittingornotpermittingmining;and adecisiononthescheduleforminingwherethatisessentialtothebuildingschedule.

In this casemineral exploration shallnot be compulsory.

2. In the caseof a zonewhere thereis a project forinvestmentand construction of important national worksforwhichtheNationalAssemblyhasauthoritytodecideinvestmentpolicy,or major works for which the Government or Prime Minister of the Government has decided investmentpolicy, being either a zone in which mineral resources have already been investigated andassessed or a zone in which mineral resourceshave not yet been investigatedandassessedbutinwhichmineralshavebeendiscovered,thentheMinistryof Natural Resources and Environment shallpreside over co-ordination with ministriesand branches concerned and with thepeople s committee of theprovinceor city under central authority where the works arelocated to issue adecision onminingand to grant a mining licenceinaccordancewithauthorityconferredinclause1ofarticle56ofthisLawinorderto ensurecompliance with thebuildingschedule.

3. Incaseswhereminingofmineralsasprescribedinclauses1and2ofthisarticlewouldbe ineffectiveornoorganizationorindividualappliesforpermissiontomine,thentheStatebody authorizedtoissuealicenceformineralactivitiesprescribedinclause1ofarticle56ofthis Lawshallissueadecisionnotpermittingminingandshallprovideawrittenreplytothebody which made the investmentdecision orissuedthe investment licence, or to theinvestor.

4. In cases of mining of mineralsas prescribed in clauses 1and 2 of this article and the organization or individual with permission to mine mineralsis not the investor of the constructionworkstowhichtheStatehasallocatedorleasedland,thenthetwopartiesshall reachagreementonlanduseinaccordancewiththelawonlandinordertoconductminingof minerals."

9. To amend and add to article 49 as follows:

"Article 49.Individualmining

1. Individualminingshallbepermittedtobeconductedforleftovermineralsinminessubjecttoa decisiononclosureforliquidation,orondumpingandwastegroundsofminedandprocessed minerals fromminessubject to a decision on closure.

2. Anylegallicencetoconductindividualminingwhichwasissuedpriortothedateofeffectiveness of this Lawmay continue to be implementedup until the date onwhich the licence expires."

10. To amend and add to article 55 as follows:

"Article 55.Authority for State administration ofminerals

1.The Government shall exercise uniform State administration of minerals

2.The Ministry of Natural Resources and Environment shall be responsible before Government for exercisingState administration of minerals throughout the wholecountry

3. The Ministry of Industry shall exercise State administration of the industry of mining and processingminerals,exceptformineralsasconstructionmaterialsandexceptformineralsas rawmaterials for production of cement.

4. TheMinistryofConstructionshallexerciseStateadministrationoftheindustryofminingand processingmineralsasconstructionmaterialsandmineralsasrawmaterialsforproductionofcement.

5. People s committees at all levels shall exercise State administration of minerals within their respective localities in accordancewith their authority.

6. Ministries and ministerial equivalent bodies shall, within the scope of their respectiveduties and powers, be responsible to co-ordinate withthe Ministry of Natural Resourcesand Environment,theMinistryofIndustry,theMinistryofConstructionandpeople scommitteesof provinces and citiesunder centralauthority inthe exercise of State administration of minerals.

7. The MineralReservesAssessment Council shall have authority and shall be responsible to assist theGovernment in the evaluation and approval of mineral reserves in reports on exploration of minerals, except for mineralsas construction materials and peat.

8. The Government shallprovide regulations on the specific authority and responsibilitiesfor State administration of minerals of the Ministry of Natural Resources andEnvironment, the MinistryofIndustry,theMinistryofConstructionandofpeople scommitteesatalllevels;and on the organizationand operation of theMineral Reserves Assessment Council."

11. To amend and add to article 56 as follows:

"Article 56.Authority and procedures forissuance,extension and withdrawal of licences to conductmineral activities

1. Authority to issue, extend, withdrawand permit surrender of licences to conduct mineral activities,and topermittheassignment of the right to conduct mineralactivities shall be regulatedas follows:

(a) The Ministry of Natural Resources and Environment shallissue mineral prospecting licences,mineralexplorationlicences,mineralmininglicencesandmineralprocessing licences except in the cases prescribedin sub-clause(b) of thisclause;

(b) People s committees of provinces and citiesunder central authority shall issue licencesforindividualminingasprescribedinarticles49and50ofthisLaw;licences forprospecting,exploration,miningandprocessingmineralsascommonconstruction materialsandpeat;mininglicencesandmineralprocessinglicencesforareaswhich havealreadybeenexplored,approvemineraldepositsnotwithinthemasterplanfor nationwidemineral mining and mineral processing as approved by the competent State body or not within the categoryof national mineral resources reserves;

(c) A body which is authorized toissue any one type of licence to conduct mineral activitiesshallalsohavetherighttoextend,withdraworpermitsurrenderofthatsame typeoflicenceandtopermittheassignmentoftherighttoconductmineralactivitiesin accordancewith law.

2. The Government shallprovide regulations on the conditions and procedures for issuance, extension, withdrawalof, andpermission tosurrender licencesto conductmineralactivities, and on permission toassignand bequeath the right to conduct mineralactivities, andon registration of mineralactivities."

Article 2

1. Article 48 of the Mineral Law is hereby repealed.

2. Theexpression"clauses1and2ofarticle5"inarticle21.1,inarticle25andinarticle31.2shallbe replaced by the expression "clause 3 ofarticle 5".

Article 3

1. This Law shall be of full force and effect as of 1 October 2005.

2. The Government shallprovide detailedregulationsand guidelinesfor implementation of thisLaw.

ThisLawwaspassedbyLegislatureXIoftheNationalAssemblyoftheSocialistRepublicofVietnamatits 7^thSessionon 14 June 2005.