Decree No. 22/2012/ND-CP on auction of the mining right

Section 1 For a mine which has a complex geological AUCTION COUNCIL structure or in case it is impossible to hire a professional auction service provider, the Article 12. Auction council provinciat-Ievet People's Committee shall I. For mineral s to be licensed by the Ministry decide to form an auction council to organize of Natura] Resources and Environment, the an aucr io n of thp mining righl. An auction auction counci Ishall be formed by the Minister council has no more than II members, of Natural Resources and En viron meru to including: organize an auction of the mining right. The a/ The chairman who is a leader of the council has no more than j j members, provincial-level People's Committee; i ncluding. b/ Members who arc representatives of the a/ The chairman who is the General Director provincial-level Departments of Natural of the General Department of Geology and Resources and Environment; Planning and Minerals of Vietnam; Investment; Finance; Industry and Trade; and bl Members who are a representative of the Construction, a representative of the provincia 1- National Council for Assessment of Mineral level Natural Resources and Environment Issue nos 0l-02lApril 2012 53 (Gong Bso IIOS 29Y·30()/April6, 2012) Department being tile council secretary, a competent licensing slate management agency representati vc of the district -Ievel People's for the truthfulness of auction winning results; Committee of the locality havine the mineral - To settle: cornpla int-, dUJ ing till: auctiou, (0 area put up for auction, and some specialists; assist the competent licensing state management r.;/ The standing body which is the provincial- agency in receiving, settling according to its level Natural Resources and Environment competence, or proposing the settlement of, Department. complaints arising after the auction; 3. The Ministry of Natural Resources and - To propose the competent lice~ng state Environment shall promulgate the Regulation ~ .' management agency to approve auc~ wrnmg Ull operation of auction councils. results: - To perform other tasks under regulations. Article 13. Powers and responsibilities of auction co unci Is and professional auction 2. Professional auction service p~lder: service providers aJ Powers; I. Auction council: a/ Powers'. . - To request the provincial-lever'Natural Resources and Environment Deperrment to - To promulgate the auction regulation and provide information on the area fuIt up for rules of a mining right auction session; auction of the mining right; bid psiers of eligible bidders; and the reserve pTi~ - To set the deposit provided in Article 5 of this Decree and bid increments for an auction .... - To request the provincial-levJ.iJ..Natural Resources and En vironrncnt Department to pay expenses for organizing the auct~ of the - To deprive the right to participate III an mining right. ;lIlCtion ses sion of an auction participant who causes disorder at the auction place or commits b/Dbligations: acts of collusion or compromise to reduce prices - To organize an auction scssio~cording or other acts which affect the objectivity and to the principles, order and proceduresprovided honesty of the auction and to make a record of .. by this Decree and take respon~lity for the hundling of such person; auction results: :., - To terminate or suspend a mining right - To provide the auction record to the ;Illetiotl session when detecting violations of pr ov i nc i a l-Ie ve l Natu r a l Re s our ccs and auction order and procedures, Environment Department: bl Responsibilities; To pay damages for faults rnude by its - To conduct an auction session under this auctioneer and other employees during the Decree and the regulation of the auction counci I; auction session; to take responsibility before law and the 54 Issue nos OI-02lApri12012 (Gong Bao /lOS 299J()()14J!Fil O. 2(12) - To perform other obligations under the 3. After being approved, lists of mineral areas auction law. put up for auction and annual plans on auction of the mining right shall be publicly notified

Section 2 and posted on the websitcs of the Ministry of ORDER AND PROCEDURES FOR Natural Resources and Environment and AUCTION OF THE MINING RIGHT provincial-level People's Committees of localities having minerals. Article 14. Planning and notification of areas put up for auction of the mining right Article 15. Mining right bidding dossiers 1. Bases for auction plunn ing: 1. Based on approved annual plans all a/ Mining areas under the mineral master auction of the mining right, the General plans provided at Points h, rand d, Clause I, Department of Geology and Minerals of Article lOofthe Mineral Law, which have been Vietnamand provincial-level Natural Resources approved by competent state agencies; and Env ironment Departments sha II compi Ic mining right bidding dossiers, hi' Areas not put up for auction of the mining right provided in Clauses 3 and 4, Articl e 78 of 2. A mining right bidding dossier must the Mineral Law, which have been approved contain the following principal contents: by competent agencies; al Name of the mineral, location of the cJ Resul ts and practical :,") tuuiion uf mining mineral area put up for auction; and intensive processing of minerals in localities bl Expected place and time of the auction', and nationwide; mineral demands for local, cl Basic geological and nuneral information: regional and national socia-economic mining conditions in the area put up for auction: development in the subsequent year. method of re fer e nc e to information and 2, Responsi biIities for c labora tion an d documents on the current state of infrastructure approval of auction plans and land use in the mineral area put up for According to the mining licensing auction; competence provided in Clauses 1 and 2, Article dJ Reserve price and deposit; 82 of the Mineral Law; and Clause 1 of this el Provisions on criteria for evaluation of hid Article, annually, the General Department of dossiers; Geology and Mineral s of Vietnam shall elaborate and submit to the Minister of Natural 11 Forms required in a bid dossier (auction Resources ami Environment for approval, and application: basic econo-technical provincial -Ie ve l Natural Resources and requirements, etc.). Environment Departments shall elaborate and 3. For auction of the mining right in an area submit to provincial-level People's Committees with mineral ex pioration results, the bidding for approval, plans on auction of the mining right. dossier-making agency provided in Clause I of Issue nos 0] -02/April2012 55 (C6ng BaD 110.\ 299,.W(}/ApriI6, 2(12) this Article s h a l I enclose a do s s i e r of results, a preliminary investment plan on requirements on mining technology, intensive exploration, mining, intcnsivc process: ng and processing and use of minerals, covering: sate of the product and a written commitment to al Minimum requirements on methods, implementing such plan if winning the auction. technology and equipment for mineral 3. The Ministry of Natura! Resources and exploitation and processing to he satisfied: Environment shall provide forms of the hi Minimum requirements on mineral application and other documents of the mining quality after mining and processmg; right bid dossier. cl Purposes and addresses of mi neral use for Article 17. Bid dossier-recci ving agencies, supply to mi ning projects determined under the method and time of receiving mining right bid approved master plan on exploitation and use dossiers of such mineral. 1. Agencies receiving mirung fight bid Article 16. Contents and form of mining dossiers are provided as follows: right bid dossiers a/The General Depat uuent ofGeology ami I. A bidder shall make a mining right hid Minerals of Vietnam is the agency making, dossier and submit it to an agency mentioned notifying and selling mining right bidding dossiers and concurrently the agency receiving in Article 17 of this Decree. mining right bid dossiers, for minerals to be :.2. Documents in a mining right bid dossier Iicenscd by the Ministry of Natural Resources shall be submitted in one copy each according and Environment; to the following provisions: bl The provtncial-Icvel Natural Resources aJ The original application for auction of the and Environment Department is the agency mining right: making, notifying and selling mining right bl The original or certified true copy of the bidding dossiers and concurrently (he agency business registration certificate; written receiving mining right bid dossiers, for minerals introduction o! capacity and experience in to be licensed by provincial-level People's mineral exploration, mining and processing; Committees. int roducti on of financial capacity and fund 2. Mining right bid dossiers shall be raising capacity; submitted directly to the bid dossier-receiving c/ For an area with mineral exploration results, agencies provided in Clause 1 of this Article a pre]imi nary investment program on mining, The time limit for receivi ng mining right bid intensive processing and sale of the product and dossiers is 30 (thirty} days counting from the a written commitment to implementing such date of c losing the noti fication or an auction of program if winning the auction. the mining right provided in Clause 1, Article dJ For all area withou; mineral exploration l8 of this Decree. 56 r.~.~m~ nos Ol.fl2JA[lrj! 2012 (Gong Baa 1I0S 299·]()()/Aprif 6.2(12) Article 18. Notification and publication of the bid dossier-receiving agency shall report information on an auction of the mining right such to the competent licensing agency and shall not oro anize the al]('tinn I. Based on an approved plan on auction of ~' ' the mining right, an agency competent to 1. A bidder selected for an auction of the organize auction of the mining right provided mining right must fully satisfy the following in Artie le 12 of this Decree shall publicly notify requirements: an auction of the mining ri ght at its office and on al Tts hid dossier ha s Ilw docurnent s ancl the website of the competent licensing agency. materials made under Clause 2, Article Ie) of The time for notification and publication of this Decree: an aucrioa is 30 (thirty) consccuti ve days before bl It satisfies requirements on mineral the date of receiving mining right bid dossiers. exploration or mining under Articles 34 and 51 Information on an auction of the mining right of the Mineral Law; shall also be published in the central mass media c/ It commits that its mining and processing or the mass media of the locality having the area equipment and tcchnolog y amI product sale plan put up for auction at least twice with an interval " conform with the requirements set in the of 3 (three) days. bidding dossier. 2. Information on an auction of the mining right inetudes: 3. Within 30 (thirty) days after the deadline for receiving bid dossiers, the bid dossier- at Name of the mineral, location of the receiving agency shall complete the selection mineral area put up for auction; of bidders ' dossiers for reporting to the auction bl Reserve price, deposit; council chairman. cI PI~ and time of the auction; For an auction conducted through a dI Starting date of receipt of bid dossiers; protessionaj auction service provider provided eI Other relevant information. in Clause 2, Article 12 of this Decree, past the above mentioned time limit, the provincial-level Article 19. Selection of mining right bi d Natural Resource s and Environment dossiers Department shall transfer bid dossiers of bidders 1. After the deadline for receiving mining selected for auction to that service provider for right hid dossiers, a bid dossier-recei ving organizing an auction under this Decree and the agency shall consider dossiers to select eligible law on property auction. bidders. Within 30 (thirty) days after recelVlng a After :i limes of notification and by the report on selection of bid dossiers, the auction deadline for receiving mining right bid dossiers, council chairman or the professional auction if the number of bidders is smaller than that service provider shall organize an auction of the provided in Clause 2, Article 3 of this Decree, mining right. Issue nos 01·~.UA'priL2.!!11 57 (Gong Baa fIGS N9-30(}(Ap,-il6, 2(12) 4. For dj sq uali Iied bid dossiers, [he bid ci NO[ ro cause disorder to. obstruct or dossier-receiving agency shall notify concerned disturb the auction or to infringe upon the lawful organizations and persons in writing, clearly rights of other auct ion particip.mtx; stating the reason. cIJ Not to buy off in order to el irninate other S. The bid dossier-receiving agency shall auction participants or to collude with others to publicly notify a list of eligible bidders and reduce prices. publish it on the website of the competent licensing agency before the auction is held; and .. 3. When an auction participant ,violates Clause 2 of this Article, the <luctiOJ'r council f*f¥~.~ notify in writing the time and venue of the chairman or the auctioneer may s~nd the meet ing providing :JIJC'tion-rrLllf'd information: auction, make a handling record an~ume the time of field survey in the area put lip for auction only after the violation is halfgred under auction; and time of payment of the auction reglllations_ charge and deposit to eligible bidders.

Section 3 ,. Article 21. Sequence and pri'rteiples ... of conducting an auction of the mininj..J;ight ORGANIZATION OF AUCTION OF THE . 1.At the beginning of all auction. • auction MINING RIGHT council secretary shall introduce auc~ council ~':" members and representatives of relat~gencies Article 20. Rules of an auction of the mining and organizations; notify auctli'tm rules; right f· announce the list of eligible bidde!t; call the ~ 1. Before an auction is held, an auction roll of auction participants and bid tl'lders; and participant shall produce a. letter of reference answer inquiries (if any). made by an eligible bidder to the auction counci I 2. The auction council chOnan or or the professional auction service provider; his! auctioneer shall conduct [he aucti~y direct her identity card; receipt of auction fee; and secret bid through uninterrupt~;bidding receipt of deposit or written auction guarantee. rounds. The auction only closes afte~ auction A bidder may send to the auction no more winner is determined. ~... than 3 auction participants inc1 uding a The auction winner is the single o1gallization representative who will make bids. or person offering the highest bid c~pared to 1. Duri ng an auction, auction participants the reserve price after all bidding rounds or the shall observe the following provisions; organization or person winning the draw 111 the aJ To exchange relevant information only case specified at Point a, Clause 5 of this Article. within their organization. not with other 3. After each bidding rouud, the auct ion organizations and persons; council chairman or auctioneer publicly notifies b/ Not to usc means of communications the highest bid of the round. When two or more throughout the auction; equal highest bids are offered, the auction Issue nos Ol-02/Ap.·iI2012 (Gong Bso IIOI 299-3()()/April 0,20/2) council chairman or auctioneer conunues of this Decree shall submit to a competent dispatching auction votes for another bidding licensing state agency a dossier for approval of round auction winning results. A dossier comprises: The reserve price of the next bidding round aJ An auction record; is the highest bid of the previous round. The hi The auction winner's bid dossier; bid written in an auction vote is valid when it c/ A draft written approval of the auction equals the reserve price plus the bid increment winning result. multiplied by an integer, 4. ALI developments of an auction of the 2. Within S (five) working days after mining right shall be recorded in writing. receiving a dossier for approval of auction Closing an auction, the auction council winning result, a competent licensing agency chairman or auctioneer shall publicly notify the shall issue a written approval of the auction council's conclusions and the auction winner. winning result. In case of disapproval, it shall The auction winner shall sign the auction record issue a notice clearly stating the reason and right at the auction. additional I equi(el[leJll~ (i rally). S. Special cases A written approval of the auction winning result must indicate the full name and abbreviated aJ If after th ree consecutive bidding rounds, name of the auction winner; name of the mineral; there arc still two or more participants offering position, coordinates and acreage of the area put the same highest bid, the auction counci I up for auction of the mining right; rights and chairman or auctioneer shall organize a draw obligations of the auction winner, and the to select the auction winner; winning bid; comrmtments of the auction wi nner. bl When the auction winner refuses the auction winning result, the next highest bidder 3. The written approval of the auction shall be cons idered and approved by the auction wummg resu It serves as a legal ground for a council to be the extra winner; competent licensing agency to consider and license mining activities for the auction wi nner clWhen the extra winner refuses the auction under the mineral law. winning result, the auction council shall issue a document canceling the auction result and Article 23. Notification ofauction winning report such in writing to the competent licensing results agency for consideration and decision. 1. Auction winning results shall be notified Article 22. Approval of auction wrnrung publicly at the office of the hid dossier receiving results agency and the website of the competent I. Within 5 (five) working days after an licensing agency right after an auction closes. auction of the mining right closes, the hid A not i fir-arion of auction winning res LIlts dossier-recei ving agency provided inArticle 17 covers: Issue DOS Ol-OUApri! Wll 59 (Cong Bao JlOS 2993(J(}/ApriI6, 2<JI2) aI Name of the auction winner; mini!lg right auction willJJing amount bf Name of the mineral: location of the area I, for auction of the mining right in an area fur which the mining right is won; with mineral exploration results, the time for c/ Winning bid, detcrmi ning the auction winning amount is right after tbe auction closes. 2. The time limn for notifying and publishing auction winning results is 5 (Eve) days after an 2. For auction of the mining right in an area auction closes. without mineral exploration results, the time for determining the auction winning amount is 3, Results of winning an auction of the before granting a mining license. mining right to be licensed by the Mini<;try of 3. The Ministry of Natural Resources and Natural Resources and Environment shall also Environment shall assume the prime he publ ishcd on the wcbsitcs of provincial-level rcspons ibi lity for, and c oorcii nute With the People's Committees of the localities with Ministry of Finance in, detailing the collection mineral areas put up for auction. method and regimes on management and use

Section 4 of mining right auction winning amounts. AMOUNT OF WINNlNG AUCTION OF Chapter IV THE MINtNG RIGHT tMPLEMENTATION PROVISIONS Artlele 24. Mi1l111g I igltl UULliu11 winning Article 26. Effect value I, This Decree takes effect on May 15,20 t2. 1. The; mining right auction winning value for an area with mineral exploration results is Article 27. Implementation responsibilities the bidder's auction winning,amount calcul atcd I The Ministry of Natural Resources and inVND. Environment shall assume the prime 2. The mining right auction winning value responsihility for, and coordinate with the for an area without mineral exploration results Ministry of Finance in. guiding the is a percentage of the mineral deposit In that area. implementation of this Decree, The Ministry of Natural Resources and 2, Ministers, heads or ministertal-Ievel Environment shall assume the prime agencies, heads of government-attached responsibility for, and coordinate with the agenc if's, ch:j i rperxon s of provincia l-level Ministry of Finance in, detailing the calculation People '5 Committees and related organ izations in VND of the amount of winning an auction shall implement this Decree.- of the mining right in an area without mineral exploration results. 011 behalf' of the Government Prime Minister Article 25. Time of determination the NGUYEN TAN DUNG