THE GOVERNMENT

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.- This Decree details the implementation of the Mineral Law of the Socialist Republic of Vietnam, passed on March 20, 1996.

Article 2.- The provisions of this Decree shall apply to the management, protection, basic geological surveys of mineral resources and the mineral activities including mineral prospection, exploration and exploitation in Vietnam by Vietnamese and foreign organizations and individuals.

Chapter II

COMPETENCE FOR STATE MANAGEMENT OF MINERALS

1. The Ministry of Industry shall perform the function of State management of minerals nationwide, having the following tasks and powers:

a) To elaborate and submit to competent bodies for promulgation or to promulgate according to its competence legal documents on the management, protection, basic geological survey of mineral resources and mineral activities;

b) To organize the elaboration of planning, plans on development of basic geological survey of mineral resources throughout the country;

To assume the prime responsibility and coordinate with the concerned ministries, central branches, as well as People�s Committees of provinces and centrally-run cities (hereinafter referred collectively to as the provincial-level People�s Committees) in elaborating and submitting to the Government for decision the strategies, planning and policies for mineral resources and the development of mineral mining and processing industry;

c) To organize the evaluation, consideration and approval of plans on mineral exploration, report on results of mineral exploration for use as common building materials, report on the feasibility study on mineral exploitation and processing, mine designing according to the provisions of this Decree and other provisions of law;

d) To grant, extend, recover and permit the return of, permits for mineral activities, to permit the transfer of rights to mineral activities according to the provisions of this Decree and other provisions of law;

e) To propagate, disseminate, guide and inspect the observance of the mineral legislation by branches, localities, organizations and individuals; to organize specialized mineral inspection as prescribed in Articles 58, 59 and 60 of the Mineral Law; to examine and inspect activities of basic geological survey of mineral resources;

f) To settle disputes, complaints and denunciations about mineral activities according the competence prescribed in Article 57 and 62 of the Mineral Law and the legislation on complaints and denunciations;

g) To manage the international cooperation activities in the fields of basic geological survey of mineral resources and mineral activities;

h) To register, monitor, evaluate and sum up the results of basic geological survey of mineral resources, the mineral activity situation throughout the country and periodically report them to the Government;

i) To coordinate with the provincial-level People�s Committees and concerned ministries as well as branches in protecting untapped mineral resources.

2. The organizational system, tasks and powers of the Industry Ministry�s bodies for geological and mineral management shall be governed by separate regulations of the Government.

1. The ministries, ministerial-level agencies and agencies attached to the Government (hereinafter called collectively the ministries) shall, according to their functions, tasks and powers, have to coordinate with the Industry Ministry in managing and protecting the mineral resources and mineral activities.

2. The ministries functioning to exercise the State management of branches engaged in mineral raw material production, use and trading shall have the responsibility to:

a) Take initiative in coordinating with the Industry Ministry, concerned ministries, central branches and provincial-level People�s Committees in elaborating and submitting to the Government for decision the policies on mineral resources, the strategy, planning and plans on development of mineral mining and processing industries, use and trading, including export and import of minerals, relating to the Ministries� branch-managing function;

b) To coordinate with the Industry Ministry in elaborating and submitting to the Government for promulgation or to promulgate according to their respective competence the regulations guiding the exploitation, protection and use of mineral resources, relating to the Ministries� branch-managing function;

c) To direct and inspect the implementation of mineral strategies, policies, planning and legislation by units under the Ministries� direct management;

d) To coordinate with the Industry Ministry in performing other tasks regarding the State management over the basic geological survey of mineral resources and mineral activities, relating to the Ministry�s branch-managing function.

Article 5.- The Ministry of Planning and Investment, the Ministry of Science, Technology and Environment and the Industry Ministry shall, according to their functions, coordinate with one another and reach unanimity in directing the international cooperation in the field of mineral activities. The Industry Ministry shall assume the prime responsibility for coordination with ministries, central branches and provincial-level People�s Committees and act as the designated body for the State management of the mineral activities of foreign organizations and/or individuals investing in Vietnam.

Article 6.- The mineral deposit evaluation council located at the Ministry of Science, Technology and Environment shall assist the Government in evaluating, considering and approving the deposits in reports on mineral exploration for exploitation feasibility study, except for minerals used as common building materials. The organization and operation of the mineral deposit evaluating council shall be stipulated separately by the Prime Minister.

1. The provincial-level People�s Committees shall, according to their functions, tasks and powers, have the responsibility to:

a) Promulgate according to their competence legal documents guiding the implementation of the regulations of the Government, the Prime Minister and the Industry Ministry on the management and protection of mineral resources and the management of mineral activities in their respective localities;

b) Assume the prime responsibility and coordinate with the ministries of Planning and Investment; Construction; Defense; Public Security; Culture and Information; Agriculture and Rural Development; and Communications and Transport in marking off areas banned definitely or temporarily from mineral activities as prescribed in Clause 1, Article 14 of the Mineral Law;

c) Work out or participate in working out plannings for development of mineral mining and processing industries in their territories;

d) Direct the application of measures to protect untapped mineral resources in their localities in combination with the protection of environment and other natural resources, the assurance of social order and security, the protection of people�s lives and health as well as the property of the State and citizens;

e) Organize the evaluation and approval of feasibility study report on mineral exploitation and processing as well as mine designing according to the provisions of this Decree and other provisions of law;

f) Grant, extend and recover permits for exploitation or processing minerals for used as common building materials, peat, and permits for full extraction according the competence prescribed in this Decree; settle, within the scope of their responsibility and powers, conditions related to land rental, use of infrastructure as well as other relevant conditions for organizations and individuals licensed to conduct mineral activities and/or basic geological survey of mineral resources in the localities;

g) Propagate, educate in and supervise and inspect the observance of the mineral legislation by all organizations and individuals in the localities;

h) Settle or participate in settling disputes over mineral activities and handle violations of the legislation on minerals in the localities according to their competence prescribed in Article 57 of the Mineral Law and other law provisions.

2. The provincial/municipal Services of Industry shall assist the provincial People�s Committees in performing the function of State management of minerals under the provisions of the Mineral Law and this Decree. The tasks and powers of the provincial/municipal Services of Industry regarding minerals shall be defined by the Industry Minister.

Article 8.- The People�s Committees of urban districts, rural districts, provincial cities and towns, district towns, communes and wards (hereinafter referred collectively to as districts, communes) shall, according to their functions, tasks and powers, have the responsibility to:

1. Apply measures to protect untapped mineral resources in the localities in combination with the protection of environment and other natural resources, assurance of social order and security, the protection of people�s lives and health as well as the property of the State and citizens;

2. Settle, within the scope of their responsibility and powers, conditions related to land rental, use of infrastructure and other relevant conditions for organizations and individuals licensed to conduct mineral activities and/or basic geological survey of mineral resources in localities according to the provisions of law and guidance of the provincial People�s Committee;

3. Propagate, educate in and supervise the observance of legislation on minerals; participate in settling disputes over mineral activities and handle according to competence the violations of legislation on minerals in the localities.

Article 9.- Competence to grant, extend, recover and allow the return of, permits for mineral activities, allow the transfer of right to mineral activities shall be prescribed as follows:

1. The Industry Ministry shall grant the following permits:

a) Mineral prospection permit;

b) Mineral exploration permit;

c) Permit for exploitation, permit for processing of assorted minerals, except for the mineral exploitation or processing permits which fall under the granting competence of the provincial People�s Committees prescribed in Clause 2 of this Article;

d) Permit for exploitation or processing of minerals used as common building materials in case of granting to foreign organizations or individuals or joint-ventures involving foreign parties.

2. The provincial- level People�s Committees shall grant the following permits for regions falling under the administrative management responsibility of the localities:

a) Permit for full extraction of assorted minerals regarding the full extraction areas already approved by the Industry Ministry according to the provisions in Articles 66 and 67 of this Decree;

b) Permit for exploitation or processing of minerals used for common building materials (including areas bordering on provinces after the Industry Ministry has granted the exploration permits and approved the exploration result report) and peat for domestic organizations and/or individuals, except for the mineral exploitation or processing permits under the granting competence of the Industry Ministry prescribed in Clause 1 of this Article. The Industry Ministry shall guide the granting of permits for exploitation or processing of minerals used as common building materials for areas bordering on provinces.

3. A body with competence to grant any kind of permit for mineral activities may extend, recover and allow the return of, such kind of permit and may allow the transfer of right to mineral activities under such kind of permit.

Chapter III

BASIC GEOLOGICAL SURVEYS OF MINERAL RESOURCES

Article 10.- The basic geological survey of mineral resources shall cover the following activities:

1. Surveying and discovering mineral resource potentials and at the same time elaborating regional geological maps, topical maps and conducting geological and mineral research;

2. Assessing mineral resource potentials according to mineral types or groups and the potential geological structure in order to discover new mines.

Article 11.- The mineral resource basic geological survey activities shall be carried out simultaneously and in combination with basic geological survey and according to the State planning and plans.

The Industry Ministry shall submit to the Prime Minister the planning and plans for basic geological survey of mineral resources, the Ministry of Planning and Investment shall evaluate and submit them to the Prime Minister for approval.

Article 12.- The organizations conducting mineral resource basic geological survey activities shall have the following rights and duties:

1. To register the tasks and plans for basic geological survey of mineral resources according to the regulations of the Industry Ministry;

2. To conduct the mineral resource geological basic survey activities according to the approved projects and the assigned plans;

3. To observe the process, procedures and techno-economic norms in geological surveys, which have been promulgated by the Industry Ministry;

4. To ensure the truthfulness and adequacy in gathering and summing up geological and mineral documents and information; to preserve the State secrets on geological and mineral information according to the provisions of law;

5. To protect environment, mineral and other resources while conducting basic geological surveys as well as mineral resource basic geological survey activities;

6. To submit reports on results of mineral resource basic geological surveys and store the State geological archives as well as geological and mineral samples in the geological museum according to the regulations of the Industry Ministry;

7. To be commended and rewarded by the State when recording achievements in researching and discovering new geological and mineral findings;

8. To be entitled to send samples abroad for analysis and tests according to the provisions of law.

Article 13.- All reports on the results of mineral resource basic geological surveys must be assessed, registered and put into the State geological archives according to the regulations of the Industry Ministry.

The State geological archive body shall have to preserve the State secrets on mineral resources, create favorable conditions for organizations and individuals to access to the results of mineral resource basic geological surveys as well as materials and information on minerals according to the regulations of the Industry Ministry.

Article 14.- The Industry Ministry shall specify the contents of the mineral resource geological basic survey projects, the keeping of the State geological archives and the geological museum; promulgate and guide the implementation of the legal documents, norms and unit prices in mineral resource basic geological survey.

Chapter IV

ORGANIZATIONS AND INDIVIDUALS ENGAGED IN MINERAL ACTIVITIES

Article 15.- Organizations and individuals entitled to conduct mineral activities under the Mineral Law shall include:

1. Vietnamese economic organizations established and operating under the State Enterprise Law, the Enterprise Law, the Cooperative Law and other economic organizations established, permitted to be established, registered or recognized by competent State bodies with the content of mineral activities included in the purpose of establishment; Vietnamese individuals who meet all conditions prescribed by law;

2. Foreign organizations and individuals or joint venture organizations involving foreign parties operating in Vietnam under the legislation on foreign investment in Vietnam.

Article 16.- Organizations and individuals prescribed in Article 15 of this Decree that wish to be granted the permits for mineral activities must fully meet the conditions prescribed by the Industry Ministry.

Article 17.- Organizations and individuals practicing mineral exploration must acquire the technical equipment and professional qualifications prescribed by the Industry Ministry.

Article 18.- Organizations and individuals permitted to exploit minerals may only conduct exploitation activities according to the permits when they have the mine executive directors who satisfy the criteria prescribed by the Industry Ministry.

The Industry Minister shall prescribe the criteria of the mine executive directors according to the provisions in Article 36 of the Mineral Law.

Chapter V

REGIONS, AREAS AND TIME LIMITS FOR MINERAL ACTIVITIES

Article 19.- Regions banned from mineral activities shall include:

a) Regions with classified, registered historical or cultural relics;

b) National gardens, protection forests; geological preserve regions;

c) Regions marked off exclusively for defense or security purposes or affecting defense or security tasks;

d) Regions lying within the scope of protection of dykes, embankments, river banks, key traffic works;

e) Regions marked off exclusively for religions;

f) Urban regions or those with important infrastructure works.

2. The ministries of Defense; Public Security; Culture and Information; Agriculture and Rural Development; and Communications and Transport shall, according to their functions, tasks and powers, have to coordinate with the provincial People�s Committees in determining the boundaries of regions banned from mineral activities within the scope of each province�s administrative management. The presidents of the provincial People�s Committees shall submit to the Prime Minister for decision and notify in writing the Industry Ministry of the regions banned from mineral activities.

3. For regions determined as being temporarily banned from mineral activities under the provisions of law, the competent State bodies managing such regions shall have to notify in writing the concerned provincial People�s Committees and the Industry Ministry thereof.

4. The underground exploitation of minerals in regions banned from mineral activities without using the surface land must also be approved in writing by the competent State bodies managing such regions.

1. Regions with restricted mineral activities are regions in which the State restricts the mineral activities in one or all of the following forms:

a) Marking off exclusively for one or several certain State organizations to monopolize the mineral activities;

b) Restriction in exploitation output;

c) Restriction in the export of exploited products.

2. The regions with restricted mineral activities shall be stipulated by the Prime Minister.

Article 21.- Regions opened to mineral activity bidding shall include the following:

1. Regions which, as stipulated by the Prime Minister, must be opened to bidding for exploration and exploitation;

2. Mineral regions or mines which have been explored with the State capital, now opened to bidding or selection of bidders for exploitation.

1. The area of a prospected region given to a permit for mineral prospection shall not exceed two thousand square kilometers (2,000 km2) marked off according to square coordinates, without limiting the types of to be prospected mineral in the region. In special case of needing an area larger than two thousand square kilometers (2,000 km2), the Industry Ministry shall have to submit the case to the Prime Minister for consideration and decision before granting the permit.

2. The mineral prospection permits may be granted to a number of organizations or individuals operating in the same region. Those who submit the application for prospection first and strictly according to the procedures prescribed by law shall be considered first.

1. The valid duration of a mineral prospection permit shall not exceed twelve months.

2. The permits for mineral prospection in regions with the acreage of one hundred square kilometers (100 km2) or more may be extended once for not more than 12 months, provided that by the time of applying for extension:

a) No organizations or individuals have submitted applications for prospection there;

b) Organizations and individuals permitted to conduct prospection activities have fulfilled all obligations prescribed in such permits;

c) Mineral prospection permits remain valid for not less than thirty days;

d) Organizations and individuals permitted to conduct mineral prospection have to submit the reports on prospection results to the Industry Ministry, clearly stating the reasons for extension, the program for continued prospection, attached with the applications for extension.

1. The granted exploration area of a permit to explore precious metals (gold, silver, platinium), gems (diamond, ruby, saphire, emerald) shall not exceed one hundred square kilometers (100km2).

2. The granted exploration area of a permit to explore coal, metallic minerals (except precious metals), non-metallic minerals (except common building materials) in inland regions, with or without water surface, shall not exceed two hundred square kilometers (200km2).

3. The granted exploration area of a permit to explore assorted minerals in the continental shelf region shall not exceed five hundred square kilometers (500km2).

4. The granted exploration area of a permit to explore minerals to be used as common building materials in the inland regions, with or without water surface, shall not exceed ten square kilometers (10km2).

5. The granted area of a permit to explore mineral waters, natural thermal water shall not exceed twenty square kilometers (20km2).

6. Organizations and individuals meeting all conditions prescribed in Articles 15 and 16 of this Decree may be granted more than one exploration permits, but not more than five permits.

Article 25.- The time limit of a mineral exploration permit, excluding the time for making reports on exploration results, the exploitation feasibility study reports, shall be six months at least and twenty four months at most, and may be extended under the following conditions:

1. By the time of applying for extension, the organization and/or individual has fulfilled all obligations prescribed in such permit; and the permit has remained valid for not less than thirty days;

2. For each time of extension, at least thirty percent (30%) of the exploration area granted to the previous permit must be returned;

3. Attached to the extension application filed to the Industry Ministry must be the reports on exploration results and actual costs, explaining the reasons for the extension, the work program and plan as well as cost of continued exploration;

4. The mineral exploration permits prescribed in Clauses 1,2 and 3 of Article 24 of this Decree may be extended twice at most, but the total extension time shall not exceed twenty four months; in cases where an exploration permit has already been extended, the exploration time has totaled forty eight months and the organization or individual permitted to conduct the exploration has fulfilled or topped the work volume and has spent according to plan but not yet acquired enough grounds for making the feasibility study report or needs more time to carry out the exploitation feasibility study, the exploration permit shall be re-granted if the organization or individuals permitted to conduct the exploration has filed the regular application.

Article 26.- The area granted to a mineral exploitation permit shall be determined on the basis of the mineral exploitation feasibility study report already evaluated and approved under the provisions of Article 44 of this Decree.

Article 27.- The time limit of a mineral exploitation permit shall be determined on the basis of the mineral exploitation feasibility study report already evaluated and approved under the provisions of Article 44 of this Decree but shall not exceed thirty years, and may be extended under the following conditions:

1. By the time of applying for extension, the organization and/or individual has fulfilled all obligations prescribed by the Mineral Law and the relevant law provisions;

2. The exploitation permit has remained valid for not less than three months;

3. Attached with the extension application filed to the body competent to grant the permit must be the sum-up report on exploitation results by the time of extension application, enclosed with the map of the mine in actual status; the untapped area and mineral deposit of the mine, the program and plan for continued exploitation;

Where a permit was granted before the Mineral Law takes effect, the mine design and the report on the assessment of environmental impacts, already approved by the competent bodies must be additionally submitted;

4. A mineral exploitation permit may be extended more than once on the basis of the continued exploitation plan, already approved by the body competent to grant the permit, but the total extension duration shall not exceed twenty years.

Chapter VI

A NUMBER OF PROVISIONS ON FINANCE AND PROPERTY RIGHTS

Article 28.- The permit fees are fees for granting and extension of mineral activity permits of various kinds.

The levels, procedures for collection, payment, management and use of permit fees of various kinds shall be prescribed by the Finance Ministry.

1. The fees for exclusive exploration right shall be calculated on the exploitation area unit and the valid term of the mineral exploitation permit according to the following regulations:

The first year: 300,000 dong/km2/year;

The second year: 400,000 dong/km2/year;

The third year: 550,000 dong/km2/year;

From the fourth year on: 700,000 dong/km2/year.

2. The fees for exclusive exploration right shall not apply to exploration permits with terms, including the extension duration, being under twelve months and shall not apply to exploration activities in the exploitation regions of organizations or individuals licensed to conduct the exploitation.

The procedures for collection, payment, management and use of fees for exclusive exploration right shall be prescribed by the Finance Ministry.

Article 30.- The payment of deposit for exploration permit shall be made once when the mineral exploration permit is granted and shall not apply to permits under which the operation is financed by the State capital.

The deposit level shall be equal to twenty five percent (25%) of the value of the exploration cost estimate of the first exploration year, determined in the exploration blueprint or plan already approved by the permit-granting agency.

Six months after the mineral exploration permit takes effect, if the exploration has not been commenced while the permit�s effect has been terminated, the deposit money shall be remitted into the State budget.

Six months after the mineral exploration permit takes effect, if the exploration has been carried out as planned, the organization or individual entitled to carry out the exploration may get back its/his/her deposit money.

Organizations and individuals allowed to carry out mineral exploration may use the form of collateral at a Vietnamese bank or a foreign bank licensed to operate in Vietnam instead of the form of deposit payment.

The Finance Ministry shall guide the payment, registration and management of deposit or collateral money for mineral exploration permits.

Article 31.- The minimum exploration cost amount calculated in Vietnamese currency unit/km2/year is the minimum expense for the performance of tasks of technical construction regarding mineral exploration on an exploration area unit of one square kilometer (1km2) in a year from the date the permit takes effect.

The Industry Ministry shall approve the minimum exploration expense level for projects using the State capital or agree to projects without using the State capital when granting or extending the mineral exploration permits.

Article 32.- With regard to a permit for mineral exploration not financed with the State capital, covering an exploration area of one hundred square kilometers (100km2) or more and the permit is valid for up to two years from the date the permit takes effect while the actual exploration expense for execution of the scheme in a period of two years is lower than the cost estimate already approved by the Industry Ministry, the difference must be remitted into the State budget when the exploration permit expires or is extended.

Article 33.- Organizations and individuals allowed to conduct exploration shall have the perform the exploration work volume and their corresponding expenses therefor according to the exploration blueprints or plans already approved by the Industry Ministry.

Where the actual exploration expense of the previous year is larger than the estimate and the exploration plan in that year, the value of the excessive expense shall be calculated into the actual expense of the following year.

1. Organizations and individuals that use the State�s information on mineral prospection and exploration results must pay money to the State by mode of payment in lump-sum or installments according to the exploitation output.

2. Organizations and individuals that have completely paid money for the use of the State�s information on mineral prospection and exploration results by mode of lump-sum payment may use or transfer such information to other organizations and individuals.

3. Organizations and individuals that have paid money for the use of the State�s information on mineral prospection and exploration by mode of installment payment according to the exploitation output may use such information for their own mineral activities, but must not transfer, sell or disclose such information to other organizations and individuals.

The Finance Ministry and the Industry Ministry shall guide the method of determining the value, mode and procedure of payment for the use of the State�s data and information on mineral prospection and/or exploration results.

1. Organizations and individuals allowed to conduct mineral activities may use or transfer the information on the results of mineral prospection or exploration, which they have totally invested in.

2. Organizations and individuals allowed to conduct mineral activities, that have partly and fully used the State�s capital for investment in the mineral prospection and exploration shall have no right to supply or transfer the information on mineral prospection and exploration results to other organizations and individuals, except the supply of such information for the State bodies competent or responsible to manage and use them according to law provisions.

3. Six months after the mineral exploration permit expires and the organization or individual allowed to conduct the exploration fails to submit the application for the exploitation permit or six months after the mineral exploitation permit expires while the organization or individual allowed to conduct the exploitation fail to submit the application for the extension of the exploitation permit, the competent State bodies may supply mineral information related to such permits for other organizations and/or individuals.

Article 36.- When allowed to transfer or bequeath the mineral exploration right or the mineral exploitation right, the organizations and/or individuals allowed to conduct mineral exploration or exploration may transfer or bequeath all property under their lawful ownership, including geological and mineral data, information and samples, works already constructed and built and equipment affixed to mine land.

When the mineral exploitation right is allowed for transfer, the land lease contract shall be re-signed, without going through the procedures for the transfer of land use right.

The transfer of the State-owned property already assigned to organizations and individuals allowed to conduct exploration or exploitation shall comply with the provisions of law.

Article 37.- When a mineral exploration or exploitation permit is no longer valid, the ownership over the property related to mineral exploration or exploitation activities shall be settled according to the regulations at Point b, Clause 2, Article 30 and Points b and c of Clause 2, Article 40 of the Mineral Law.

The Finance Ministry and the Industry Ministry shall guide the method of determining the value of transferred property and the procedures for transfer of property of organizations or individuals allowed to conduct mineral exploration or exploitation under the provisions of the Mineral Law and other relevant provisions of law.

Article 38.- Organizations and individuals allowed to conduct mineral exploitation shall have to deposit as collateral at a Vietnamese bank or foreign bank licensed to operate in Vietnam a sum of money to guarantee the restoration of environment and land when terminating activities on each section of the area and when closing the mines.

The collateral amount for restoration of environment and land shall be based on the process, tempo of exploitation and restoration and the cost estimate for restoration determined in the feasibility study report, mine design and the report on assessment of environmental impacts, already evaluated and approved by the competent State bodies.

The Finance Ministry and the Industry Ministry as well as the Ministry of Science, Technology and Environment shall prescribe the method of determining the level and guiding the procedures for registration, management and use of collateral money for the restoration of environment and land in mineral exploitation.

Article 39.- The Finance Ministry shall elaborate and submit to the Prime Minister for promulgation the regime of distribution and use of the State�s revenues in mineral activities for the implementation of policies to protect the interests of people in localities where minerals are exploited, processed according to the provisions in Article 7 of the Mineral Law and to protect the untapped mineral resources.

Article 40.- For a number of types of important minerals servicing the socio-economic development plans of the country but the attraction of investment capital from other sources is confronted with difficulties, the Prime Minister shall decide to allocate capital for State enterprises to invest in the exploration.

The Industry Ministry shall assume the prime responsibility and coordinate with the Ministry of Planning and Investment and the Finance Ministry in submitting to the Prime Minister projects proposed for State capital allocation for exploration according to this regulation.

For other cases, the State enterprises are entitled to borrow preferential credit capital for investment in mineral exploration. The State capital invested in mineral exploration and the preferential credit loans must be gradually retrieved when the mines are put into exploitation.

The Finance Ministry shall assume prime responsibility and coordinate with the Industry Ministry, the Ministry of Planning and Investment in prescribing and guiding the procedures for State capital allocation, borrowing of preferential credit capital and the exemption or reduction of capital retrieval for mineral exploration.

Chapter VII

EVALUATION AND APPROVAL OF PLANS AND REPORTS ON MINERAL ACTIVITIES

Article 41.- Organizations and individuals allowed to conduct mineral activities may themselves or hire geological or mine exploitation consulting organizations or experts to elaborate or evaluate plans, projects, mine design or mine closure in the mineral activities.

1. The Industry Ministry shall stipulate, guide and organize the evaluation of mineral prospection and/or exploration plans before deciding to grant the prospection and/or exploration permits.

2. The Industry Minister shall base him/herself on the evaluation results to approve plans on exploration partially or totally financed with the State capital.

3. For projects not financed with the State capital, the contents of approving the projects shall be determined in the mineral exploration permits.

1. All reports on the results of mineral exploration partially or totally financed with the State capital must be evaluated and approved before they are submitted into the State geological archive or studied for mineral exploitation feasibility.

2. The reports on results of mineral exploration not financed with the State capital, if being the materials for mineral exploitation feasibility study, must also be evaluated by the competent State bodies defined in Clauses 4 and 5 of this Article and submitted into the State geological archive.

3. The requirements and contents of evaluation of mineral exploration reports shall include:

a) The credibility in the quantity and quality of minerals, including accompanied minerals; detection of shortcomings in exploration which lead to the omission of mineral resources;

b) The extent and quality of the determination of geological and hydrological, construction-geological conditions as well as technical and technological conditions related to the selection of technology for exploitation, processing and rational use of mineral resources;

c) The exploration results, the exploration investment efficiency ( if using the State capital) as compared with the objectives of the evaluated, approved projects.

4. The Industry Ministry shall evaluate and approve reports on exploration of minerals used as common building materials, which shall be used for exploitation feasibility study.

5. The mineral deposit evaluating council shall evaluate and approve the deposits in exploration reports used for feasibility study of the exploitation of assorted minerals, except for minerals used as common building materials.

1. The evaluation and approval of reports on feasibility study of mineral exploitation under domestic investment projects shall comply with the Regulation on Investment and Construction Management promulgated by the Government.

2. The evaluation of reports on feasibility study of mineral exploitation under foreign direct investment projects shall comply with the regulation on evaluation and implementation of foreign direct investment projects promulgated by the Government.

1. Organizations or individuals evaluating mine designs must be organizations or individuals that are interest-independent from the organizations or individuals that make the designs and held responsible before law for their evaluation results.

2. The mine designs of investment projects for mineral exploitation shall be evaluated and approved under the provisions in the Investment and Construction Management Regulation promulgated by the Government.

3. The Industry Ministry shall guide in detail the design contents and the procedures for evaluation and approval of mine designs.

Article 46.- The Industry Ministry shall prescribe the periodical reporting regime and contents in mineral activities.

Article 47.- All plans for mine closure must be evaluated and approved in terms of their contents, requirements on safety, environment and land restoration as well as other requirements as prescribed at Points b and d of Clause 2, Article 40 of the Mineral Law.

The Industry Ministry shall promulgate detailed regulations on mine closure.

Chapter VIII

PRINCIPLES AND PROCEDURES FOR GRANTING MINERAL ACTIVITY PERMITS, TRANSFER OR BEQUEATHAL OF THE RIGHTS TO MINERAL EXPLORATION, EXPLOITATION OR PROCESSING

Article 48.- The main bases for considering the granting of mineral activity permits shall include:

1. The State�s strategy on socio-economic development in general, and strategy on development of minerals- related industries such as energy, metallurgy, building materials, mineral fertilizers, chemicals, communications and mineral raw materials production and business, in particular;

2. The Party�s and State�s policies on mineral resources and strategies as well as planning on development of mining industry in each province, region, zone and the entire country, in conformity with the socio-economic development strategy and industrial development strategy in each period;

3. The socio-economic efficiency of specific mineral activities, closely linked to the requirements of ensuring security and defense, protecting ecological environment, protecting and rationally using natural resources in general, protecting historical and cultural relics and other public facilities according to the provisions of relevant legislation;

4. The legal status of the applicants (investors) as prescribed by law and other specific conditions prescribed by this Decree.

Article 49.- Apart from the main bases prescribed in Article 48 of this Decree, the granting of mineral exploration permits must also be based on the written opinions of the provincial People�s Committees on the areas planned to grant to the exploration permits whether or not relating to regions banned or temporarily banned from mineral activities, regions for which the provincial People�s Committees have already granted permits for mineral exploitation according to their competence.

The provincial People�s Committees shall, according to their State management competence in localities, have to assume the prime responsibility and coordinate with relevant competent agencies at central and local levels in determining regions banned or temporarily banned from mineral activities according to the provisions in Clause 1, Article 14 of the Mineral Law and Point b, Clause 1, Article 7 of this Decree.

In special cases where mineral exploration or exploitation should be conducted in regions banned or temporarily banned from mineral activities according to Article 19 of this Decree, the Industry Ministry shall have to report such to the Prime Minister for considering and deciding on the granting of permits for exploration or exploitation in those regions.

Article 50.- The granting of permits for mineral exploitation or processing shall be based on the feasibility study report, the environmental impact assessment report and the mineral deposit reports, which have already been evaluated or approved by competent bodies according to law provisions.

Article 51.- Before the mineral exploitation permits are granted according competence, the provincial People�s Committees� written opinions on matters prescribed in Article 49 of this Decree must be obtained, if such opinions had not been obtained when the exploration permits were granted.

The provincial People�s Committees shall, according to their competence, have to reply in writing the application-receiving agencies within fifteen days at most after the receipt of letters asking for their opinions.

In case of necessity, the agencies receiving the applications for mineral exploitation may publish such applications on the mass media at least fifteen days before granting the exploitation permits in order to gather comments.

1. Upon receiving the valid dossiers and applications for licenses of investment in mineral exploitation or processing or in activities related to mineral exploitation or processing with foreign direct investment capital, the Ministry of Planning and Investment shall have to coordinate with the Industry Ministry in considering and gathering comments from concerned agencies, then submitting them to the Prime Minister for decision or make decisions according to competence after obtaining written agreement of the Industry Ministry;

2. Foreign organizations and individuals or joint ventures involving foreign parties, that are granted permits for exploration, may enjoy preferences prescribed by law for conducting the exploration under the approved projects.

3. The mineral exploitation or processing permits shall be granted to foreign organizations and individuals or joint ventures involving foreign parties together with the investment licenses under the Law on Foreign Investment in Vietnam.

4. An investment license granted to a foreign organization, individual or a joint venture involving foreign party for the execution of a mineral exploitation project may cover the mineral exploration, exploitation and processing activities.

Article 53.- The maximum time limits for evaluation of dossiers of application for mineral activity permits, excluding the time for gathering opinions of concerned agencies as provided for in Articles 49 and 51 of this Decree, are prescribed as follows:

1. Forty five days after the receipt of complete and valid dossiers of domestic organizations and individuals;

2. Sixty days after the receipt of complete and valid dossiers of foreign organizations, individuals or joint ventures involving foreign parties;

3. The above time limits do not include the time for organizations and/or individuals to supplement dossiers at the request of the receiving agencies.

Within seven days after the above time limits, the competent bodies must grant the permits or reply the applicants in writing about the refusal to grant the permits.

Article 54.- After the mineral activity permits are granted according to the provisions of this Decree, the competent State bodies at the central and local levels shall have to quickly settle conditions related to land rent, the use of infrastructure and other relevant conditions for organizations and individuals licensed to conduct mineral activities.

Article 55.- Organizations and individuals licensed to conduct mineral activities may return parts of the areas or mineral activity permit under the following conditions:

1. The organizations and individuals licensed for mineral activities have fulfilled all the law-prescribed obligations by the time of applying for the return of the permits; have restored environment, land and ensure safety for the returned areas;

2. Within three months after their exploration permits are returned, the organizations and/or individuals licensed to conduct the exploration must fulfill all obligations prescribed at Point b, Clause 2, Article 30 of the Mineral Law.

Within six months after their exploitation permits are returned , the organizations and/or individuals licensed for the exploitation must fulfill all obligations prescribed at Points b, c and d of Clause 2, Article 40 of the Mineral Law;

3. They are allowed in writing by the competent bodies that have granted such permits to return the permits.

Article 56.- The transfer of the right to mineral exploration or exploitation must comply with the following regulations:

1. Organizations and individuals licensed for mineral exploration or exploitation may transfer their right to exploration or exploitation under the granted permits to other organizations and individuals for continuing to exercise their rights and fulfill their obligations prescribed in the permits and according to the provisions of law;

2. Property, documents and values as well as the unfulfilled financial obligations of organizations and/or individuals licensed for exploration or exploitation to be transferred together with the right to mineral exploration or exploitation must be inventoried, evaluated fully and truthfully and clearly determined in the contracts on transfer between the parties;

3. Enclosed with the contract and the application for the transfer of exploration or exploitation right of organizations or individuals licensed for the exploration or exploitation must be the report on the exploration or exploitation results by the time of applying for the transfer permission;

4. The mineral exploration or exploitation right transferees must fully meet the conditions prescribed in Article 15 of this Decree;

5. Where the transferees being foreign organizations or individuals or joint ventures involving foreign parties, there must be the investment licenses granted by competent bodies under the provisions of the Law on Foreign Investment in Vietnam;

6. The transfer of exploration or exploitation right of organizations or individuals licensed for mineral exploration or exploitation must be permitted by the bodies competent to grant such permits, and subject to tax payment under the provisions of law.

Article 57.- The mineral exploration or exploitation right of individuals licensed for exploration or exploitation may be bequeathed provided that the lawful heirs of such individuals fully meet the conditions prescribed in Articles 15 and 16 of this Decree. If the lawful heirs of the individuals licensed for mineral exploration or exploitation fail to fully meet the conditions for continued operations under the permits, the case can be settled as follows:

1. The lawful heirs to the property of the individuals licensed for exploration or exploitation may transfer the mineral exploration or exploitation right under the permits if the practical conditions suit the provisions in Article 56 of this Decree;

2. The mineral exploration or exploitation permits shall be recovered, the heirs to the property of the individuals licensed for mineral exploration shall have the rights and obligations prescribed at Point b, Clause 2, Article 30 of the Mineral Law; the lawful heirs to the property of the individuals licensed for mineral exploitation shall have the rights and obligations prescribed at Points b, c and d, Clause 2, Article 40 of the Mineral Law.

Article 58.- The mineral prospection permits shall be withdrawn under the provisions in Article 24 of the Mineral Law. Where the organizations or individuals licensed for the prospection breach one of the regulations in Article 23 of the Mineral Law, the time limit for remedy shall not exceed thirty days after the Industry Ministry�s body in charge of the State management over minerals issues the written notice thereon.

Article 59.- The mineral exploration permits shall be withdrawn under the provisions in Article 29 of the Mineral Law. Where organizations or individuals licensed for exploration breach one of the regulations in Article 27 of the Mineral Law, the time limit for remedy shall not exceed sixty days after the Industry Ministry�s body performing the State management over mineral issues the written notice thereon.

Article 60.- The mineral exploitation permits shall be recovered under the provisions in Article 39 of the Mineral Law. Where organizations or individuals licensed for exploitation breach one of the regulations in Article 33 of the Mineral Law, the time limit for remedy shall not exceed ninety days after the Industry Ministry�s body performing the State management over mineral issues the written notice thereon according to competence.

1. The mineral processing permits shall be granted to organizations and/or individuals other than those licensed for mineral exploitation under the following conditions:

a) Organizations and individuals applying for processing fully meet the conditions prescribed in Articles 15 and 16 of this Decree;

b) The mineral processing feasibility study report is evaluated, approved and accepted as provided for in Article 44 of this Decree;

c) They have their reports on environmental impact assessment evaluated and approved by competent State bodies.

2. The term of a mineral processing permit shall be based on the feasibility study report for each project and compatible with the investment license or the investment decision.

3. The mineral processing permits shall be recovered when the organizations or individuals licensed for mineral processing breach one of the regulations in Article 46 of the Mineral Law.

4. The transfer, bequeathal of mineral processing right shall comply with the provisions in Articles 56 and 57 of this Decree.

Article 62.- The exploitation of minerals for use as common building materials in the following cases must not apply for the mineral exploitation permits:

1. The exploitation of minerals for use as common building materials shall be conducted within the framework of the State�s projects on infrastructure construction such as building dams, digging canals for hydro-electric power generation or irrigation, road bed leveling, digging tunnels, dredging rivers, lakes, ports, defense works and other works of the State of similar nature, without exploiting mineral outside the construction area, the exploitation only for the full extraction but not for the main purpose of mineral business, investment projects and construction designs, which have already been evaluated and approved by competent State bodies according to law provisions;

2. The exploitation of minerals for use as common building materials for the purpose of utmost exploitation, not for the main purpose of mineral business shall be conducted within the land areas assigned by the Government to organizations and individuals for use;

3. Before carrying out the exploitation or full extraction of minerals for use as common building materials under the provisions in Clauses 1 and 2 of this Article, the organizations and individuals entitled to the exploitation must register the capacity, volumes and equipment together with the exploitation plans at the provincial Industry Service of their respective localities.

Article 63.- The exploitation of assorted soils to supply materials for ground fill-ups in projects or urban construction may be conducted on the basis of meeting the following conditions:

1. There is document on geological survey of the exploitation region evidencing that no minerals of higher value are found therein, which are certified in writing by the provincial Industry Service;

2. The land to be exploited is not the agricultural land or protection forest land;

3. The exploitation activities shall not cause adverse impacts on the ecological environment, surrounding landscapes, not cause damage to public facilities, infrastructure, cultural or historical relics, defense works and terrain of military value;

4. It is permitted by the provincial People�s Committee.

Article 64.- The Industry Ministry shall guide in detail the procedures for granting, extending, allowing the return of, mineral activity permits, allowing the transfer or bequeathal of rights to mineral exploration, exploitation or processing, and for registration of mineral activities for uniform application throughout the country.

Chapter IX

FULL EXTRACTION

Article 65.- The full extraction means a form of mineral activities suitable to the following conditions:

1. It is not compulsory to explore the areas allowed for mineral activities before commencing the exploitation;

2. The declared dug volume, including discarded earth, rock and minerals for a full extraction permit granted to an individual shall not exceed five thousand (5,000) tons/year, and to an organization shall not exceed one hundred thousand (100,000) tons/year;

3. In cases where explosive is used, such must be permitted according to the provisions of law; toxic chemicals must not be used;

4. Each individual shall be granted only one full extraction permit.

Article 66.- The regions licensed for full extraction shall include:

1. Regions where exist minerals in forms of mineral sand, rolling ore and small ore bodies lying scattered, which have been surveyed and evaluated, where investment in the industrial-scale exploitation does not yield economic efficiency;

2. Regions where exist minerals used as common building materials, which lie far from roads, lakes, rivers, canals and urban population centers where the socio-economic conditions as well as consumption demands do not permit the investment in industrial-scale exploitation;

3. Mining regions where the decision on mine closure has been made in order to liquidate or close the mines for protection, where the re-exploitation on industrial scale does not yield economic efficiency while the full extraction does not cause unsafety to the closed mines.

Article 67.- The Industry Ministry shall approve the full extraction regions, except where exist precious metals, gems, on the basis of the proposal of the provincial People�s Committees so that the latter manage and grant permits for full extraction according to the provisions in Article 66 of this Decree and the guidance of the Industry Ministry. Full extraction permits shall not be granted to mineral locations not yet approved by the Industry Ministry.

Article 68.- The full extraction area of a permit granted to an organization shall not exceed twenty hectares, and to an individuals shall not exceed one hectare.

Article 69.- A full extraction permit shall be valid for not more than thirty six months, extended more than once but the total extended time shall not exceed twenty four months under the following conditions, by the time of applying for extension:

1. Organizations and individuals licensed to conduct full extraction have fulfilled the obligations prescribed in Article 52 of the Mineral Law;

2. The regions being applied for permit extension are still suitable to the form of full extraction under the provisions of the Mineral Law and Articles 65 and 66 of this Decree;

3. The full extraction permits remain valid for not less than thirty days.

Article 70.- The full extraction permits shall be withdrawn under the provisions of Article 53 of the Mineral Law. Where a region being permitted for full extraction is no longer suitable to the form of full extraction, the full extraction permit shall be withdrawn and the consequences shall be settled according to the following regulations:

1. Organizations or individuals licensed to conduct full extraction must remove all of their property from the exploitation regions, restore the environment and land and shall be entitled to the damage compensation paid by organizations or individuals licensed to conduct mineral activities regarding regions for which the full extraction permits have been recovered;

2. Where there is no organization or individual licensed to conduct mineral activities regarding the regions which are no longer suitable to the form of full extraction or the full extraction permits are recovered under the provisions in Clause 2, Article 14 of the Mineral Law, the damage incurred by organizations and/or individuals shall be considered and settled by the State according to the provisions of law;

3. If organizations or individuals licensed to conduct full extraction establish enterprises for mineral activities, they shall be granted new mineral activity permits for regions where the full extraction permits have been withdrawn.

Article 71.- Organizations and individuals licensed to conduct full extraction may request State bodies, scientific and technological research institutions and enterprises engaged in mineral activities to provide technical and technological guidance and assistance. The above-said organizations shall have to satisfy the legitimate request of organizations and individuals licensed for full extraction.

Article 72.- The provincial People�s Committees shall base themselves on the provisions of the Mineral Law and this Decree to specify the organization of management and granting of full extraction permits, suitable to the conditions of their localities after reaching agreement with the Industry Ministry.

Chapter X

SPECIALIZED MINERAL INSPECTORATE

Article 73.- Mineral Inspectorate shall have to abide by the law provisions on labor safety, labor hygiene and environmental protection, take initiative in coordinating with the State Inspectorate regarding labor and the specialized inspectorate for environmental protection for the performance of the tasks of examination and inspection on labor safety, labor hygiene and environmental protection in mineral activities, particularly the mineral exploitation activities; coordinate with the State Inspectorate of various branches and various levels in settling complaints and denunciations of organizations and individuals in mineral activities.

Article 74.- The organization, tasks and powers of the specialized mineral inspectorate shall comply with the provisions in Articles 59 and 60 of the Mineral Law and be prescribed by the Government.

Chapter XI

IMPLEMENTATION PROVISIONS

Article 75.- This Decree takes effect 15 days after its signing and replaces Decree No.68/CP of November 1, 1996 of the Government which detailed the implementation of the Mineral Law.

Article 76.- The Industry Minister, the heads of the concerned ministries and branches shall submit to the Government for promulgation the accompanied legal documents and have to guide in detail, monitor and inspect the implementation of this Decree.

Article 77.- The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government and the presidents of the People�s Committees of the provinces and centrally-run cities shall have to implement this Decree.

On behalf of the Government
Prime Minister
PHAN VAN KHAI