31 May 2012
On 9 March 2012, the Vietnamese Government issued Decree No. 15/2012/ND-CP ("Decree 15") detailing the implementation of a number of articles in the Mineral Law.
For information about the Mineral Law, see Mayer Brown JSM's Legal Update: "Vietnam's 2010 Mineral Law" of 14 March 2011.
Decree 15 comprises 6 chapters and 46 articles on:
- mineral master planning, and development of master plan on basic geological surveys of mineral resources;
- mineral activities;
- assessment and approval of mineral reserves;
- mining of minerals and closure of mines;
- procedures for licensing mineral activities; and
- financial matters regarding minerals.
Decree 15 does not regulate the principles, conditions and procedures for auctioning mineral mining rights. Those areas are covered in Decree 22/2012/ND-CP dated 26 March 2012 ("Decree 22"). For information about Decree 22, see our previous Legal Update: Decree on Auctioning Mining Rights.
We set out below the key provisions of Decree 15.
Export of minerals
- The Ministry of Industry and Trade will assume the main responsibility for, and coordinate with the Ministry of Natural Resources and Environment ("MONRE") in, formulating and issuing the lists, conditions and standards for export of various types of minerals, except minerals used as construction materials.
- Minerals used as construction materials are exported under the authority of the Ministry of Construction, which will assume the main responsibility for, and coordinate with MONRE in, formulating and issuing the lists, conditions and standards for export of construction minerals.
Repayment of the costs of gathering information on mineral exploration
Decree 15 stipulates that the costs of basic geological surveys of mineral resources and mineral exploitation should be reimbursed by the user of such information.
Payment for information relating to surveys assessing mineral capacity is made in accordance with the following principles:
- If the information is from the State, an entity or individual wishing to use this information will have to pay for the investment costs of the State. This cost is based on the quantity of work, work items to be constructed and the current unit prices.
- Entities permitted to use funds from the State budget to survey minerals may not provide or transfer the information on their exploration results to other entities, besides government authorities in accordance with MONRE regulations.
- If the information is produced and paid for by a private investor, whether an entity or an individual, the cost would be based on agreement between the investor and the entity using this information.
- The entity receiving the information must make payment before it can apply for a mineral exploration license or mineral mining license.
Preparation of mining master plan in localities
The preparation of the master plan on exploration, mining and use of minerals in a province and city under central authority must be in line with the national mineral strategy and the local master plan on socio-economic development.
The exploitation and use of minerals must be carried out in a reasonable, economical, efficient manner while maintaining technological progress and safeguarding cultural relics and the environment.
Selection of an entity for issuance of a mineral exploration license
In principle, the issuance of mineral mining rights must be conducted via auction, which is governed by Decree 22. Decree 15 regulates the selection and licensing of organisations or individuals for mineral exploration in geographical areas not subject to auction of mineral mining rights.
The criteria for such selection and licensing are as follows:
- Where one entity has requested issuance of such license for a particular mine, that entity is selected if it meets the qualifications stipulated in the Mineral Law.
- Where two or more qualified entities have applied, the successful candidate will be the one which satisfies most of the following conditions:
- among the candidates, it has the largest equity; and
- it has invested in the cost of undertaking basic geological surveys in the area in question; and
- it has undertaken to exploit and use minerals for domestic production.
If more than one of the applicants satisfies all of the additional conditions, the applicant which lodged its dossier the earliest will be chosen.
Extension of a mineral mining license
No later than 45 days prior to the expiry of the mining license, the investor must lodge an application for an extension (including a report on results of its mineral mining operation) with the competent body.
Responsibilities of the State regulators
The competent authorities to receive application files for licensing mineral operations, for approval of mineral reserves, and to close mines are stipulated as follows:
- The General Department of Geology and Minerals receives application files for licensing mining activities and application files for closure of mines under the licensing ambit of MONRE.
- The Office of the Council for Assessment National Mineral Resources receives application files for approval of mineral reserves within a report on the results of exploration pursuant to an exploration license under the licensing ambit of MONRE.
- The local Department of Natural Resources and Environment receives application files for licensing mineral operations, application files for approval of mineral reserves within a report on the results of exploration, and application files to close mines under the licensing ambit of the provincial People's Committee.
MONRE has the main responsibility to coordinate with the Ministry of Finance in determining the method of calculating and collecting fees for issuance of mineral mining rights, and for managing and using the fees collected.
Decree 15 took effect on 25 April 2012.
For inquiries related to this Legal Update, please contact Orsolya Szotyory-Grove or your usual contacts with our firm.