Concerns about the licensing of mineral mines 'opening the door' to applications

TPO - Commenting on the draft Law on Geology and Minerals, the Vietnam Federation of Commerce and Industry proposed to auction mineral exploitation rights. This agency expressed concern that the regulation that areas where mineral exploitation rights are not auctioned will create a very large space for the form of asking and giving.

Vietnam Federation of Commerce and Industry (VCCI) VCCI has just sent a document to the National Assembly's Committee on Science, Technology and Environment to comment on the draft Law on Geology and Minerals.

In its comments, VCCI expressed concern that the regulation on areas where mineral exploitation rights are not auctioned will create a very large space for the form of asking and giving. This agency cited the report summarizing 10 years of implementing the 2010 Mineral Law by the Ministry of Natural Resources and Environment, which showed that only 6 licenses were granted through auction out of a total of 421 mineral exploitation licenses granted by this ministry, accounting for 1.4%.

Regarding the licenses granted by the provincial People's Committee, 394 out of 4,279 licenses were granted through auction, accounting for 9.2%. This very low rate shows that the majority of mineral mines are still licensed through the request-grant method.

According to VCCI, most mineral mines are licensed on a request- grant basis.

The draft also stipulates areas where mineral exploitation rights are not auctioned (if minerals have been planned as raw materials for projects to process industrial products).

According to VCCI, this regulation has a very broad scope, covering many important minerals, especially metal minerals such as bauxite, titanium, iron, etc. These are all minerals with great potential for exploitation and great commercial value. At that time, these mines can all be converted to a non-auction mechanism, continuing to implement the request-grant mechanism.

Meanwhile, the effectiveness of the auction has been recorded in practice. The winning bid price of 6 licenses issued by the Ministry of Natural Resources and Environment was 76% higher than the starting price. Thus, if the auction cases are expanded, VCCI believes that the benefits to the budget will be huge, while creating a transparent and healthy business environment for enterprises.

Therefore, VCCI recommends that the drafting committee study and consider regulations in the direction that all mineral exploitation rights must be granted through auction (or bidding).

Regarding financial issues, according to VCCI, in recent times, Vietnam's mineral sector has not attracted large, systematic investment projects. The law has not yet had an appropriate protection mechanism for enterprises investing in large-scale projects, and the capital recovery period is long.

According to businesses, one of the biggest reasons limiting large investments in the mineral sector is policy risk. Frequent and continuous policy changes in an unfavorable direction for mineral projects that have come into operation have had a very negative impact on Vietnam's investment and business environment.

"Some businesses have reported that their financial obligations to the budget have increased nearly three times compared to regulations at the time of granting mineral exploitation licenses, such as increased resource taxes, mineral exploitation rights fees, environmental protection fees for mineral exploitation, and mineral export taxes," VCCI reported.

In this situation, VCCI proposed to study and supplement the investment guarantee mechanism for large mineral projects. The State ensures a stable investment environment in terms of enterprises' financial obligations to the budget. In case of changes in the law, investors will not be subject to unfavorable changes for the entire project, or the first 50% of the project period.

Viet Linh

Source: https://tienphong.vn/lo-ngai-viec-cap-phep-mo-khoang-san-rong-cua-xin-cho-post1649211.tpo