Complete the general legal framework with specific regulations:

Báo Tài nguyên Môi trường•26/12/2023

Although the auctioning of mineral exploitation rights has contributed to maximizing the potential value of minerals and significantly increasing revenue for the State budget, it cannot be denied that violations in mineral exploitation activities still exist that require inspection, rectification, and strict handling by competent State agencies.

anh-1-o-tran-phuong(1).jpg — Mr. Tran Phuong - Deputy Director of the Vietnam Mineral Resources Department

A reporter from TN&MT Newspaper had a conversation with Mr. Tran Phuong, Deputy Director of the Vietnam Mineral Resources Department, to clarify this issue.

PV: Recently, there has been much public attention regarding the fact that the winning bids for three sand mines in Hanoi were many times higher than the starting prices. How do you assess these results, sir?

Mr. Tran Phuong: The law on minerals already stipulates that the granting of mining licenses is carried out on the basis of auctioning the right to exploit minerals, except for mineral areas designated by the Prime Minister as areas where the right to exploit minerals is not subject to auction according to the criteria stipulated in Article 22 of Decree No. 158/2016/ND-CP. Through the auction of mineral exploitation rights, businesses have the opportunity to compete fairly and transparently to participate in mineral exploitation activities.

However, the recent auction results for three sand mines in Hanoi, with winning bids hundreds of times higher than the starting prices, are "unusual." With such winning bids, the costs associated with mineral exploitation fees alone far exceed the market price of construction sand. Therefore, implementing the mineral exploitation projects after winning the auction is highly impractical.

To clarify this issue, immediately after receiving information about the auction results, the Vietnam Mineral Resources Department sent a document requesting the Hanoi Department of Natural Resources and Environment to report and provide relevant information and documents for a comprehensive assessment of the auction's organization and implementation. Subsequently, the Ministry of Natural Resources and Environment also sent a document requesting the Hanoi People's Committee to direct the Department of Natural Resources and Environment to promptly report and provide information.

PV: Could you please tell us, following Prime Minister's Directive No. 1087, what solutions has the Vietnam Mineral Resources Department advised the Ministry of Natural Resources and Environment to strengthen the management of auctioning the right to exploit mineral resources for common construction materials?

Mr. Tran Phuong: Mineral exploitation rights are a unique type of asset; therefore, determining their value and organizing the auction has its own characteristics, unlike auctioning other types of assets. Specifically, the subject of the auction here is the right to exploit minerals, not the value of the mineral mine itself. Furthermore, there are two types of auction subjects: mineral exploitation rights in areas where exploration results have been obtained and those where exploration results have not yet been obtained.

Therefore, in the near future, the Department will, within its authority or by advising the Ministry of Natural Resources and Environment, continue to coordinate with the Departments of Natural Resources and Environment of provinces and centrally-administered cities to promote and improve the quality and effectiveness of propaganda, dissemination, and legal education on the auction of mineral exploitation rights; and raise awareness of the policy on auctioning mineral exploitation rights.

Specifically, before auctions, it is necessary to clearly explain to investors what the subject of the auction is. Besides the obligation to pay the winning bid fee, investors must still fulfill other tax, fee, and levy obligations as stipulated by law, and must still invest in the exploitation, transportation, processing, storage, and consumption of the extracted minerals. This allows for appropriate bidding based on the reserves, quality, and conditions of exploitation, transportation, processing, and consumption of each mine.

Regarding management, according to the Mineral Resources Law, minerals used as construction materials fall under the management and licensing authority of the provincial People's Committees. Therefore, the Department will advise the Ministry of Natural Resources and Environment to issue a document requesting the People's Committees of provinces and centrally-administered cities to strengthen the effectiveness and efficiency of state management of mineral exploitation rights auctions in their localities. Accordingly, in addition to organizing auctions in accordance with regulations, promptly rectifying and strictly handling violations by asset auction organizations, auctioneers, and related individuals and organizations, attention should be paid to closely monitoring the implementation of regulations after licensing.

Specifically, this includes monitoring, reporting, statistics, inventory, and control of actual mining output and permitted reserves. If the permitted reserves are exhausted but the mine still has remaining reserves, the organization or individual licensed to mine minerals must report to the competent authority for consideration and decision. Strict action will be taken against illegal mining, transportation, stockpiling, trading, and use of minerals without a license, or mining beyond the permitted boundaries, especially for sand and gravel from riverbeds and lakebeds.

Regarding the completion of the legal framework, the Department is currently tasked with leading the development of the Law on Geology and Minerals, and is also closely coordinating with the agency in charge of drafting the Law amending and supplementing a number of articles of the Law on Auction of Assets.

Accordingly, to increase the effectiveness and efficiency of auctions, the Department will continue to improve the general legal framework for asset auctions by including specific regulations for unique assets such as mineral exploitation rights, such as increasing the deposit amount; imposing sanctions prohibiting organizations and individuals from forfeiting their deposits in subsequent auctions; and establishing regulations to closely monitor and control actual mining output in accordance with the licensed reserves...

PV: Sir, what plans will the Department implement to coordinate with relevant ministries and agencies, especially local authorities, to strengthen the management of auctioning the right to exploit mineral resources for construction materials?

Mr. Tran Phuong: Following the Prime Minister's directive, the Vietnam Mineral Resources Department is advising the Ministry of Natural Resources and Environment to coordinate with the Ministries of Justice, Finance, Construction, and Planning and Investment to establish an inspection team to examine the auction of mineral exploitation rights in several localities, focusing on those with winning bids many times higher than the starting price. This aims to promptly identify inadequacies in legal regulations and to advise and propose amendments and additions to the Law amending and supplementing certain articles of the Law on Auction of Assets and the Law on Geology and Minerals in the future; to prevent the exploitation of loopholes for personal gain, group interests, and market disruption caused by auctions; and to handle violations or propose that the competent authorities handle them according to the law.

PV: Thank you very much!

Source