Mineral rights auction to boost State coffers

The right to explore and exploit minerals will be auctioned, and information and databases on mineral resources will be commercialised to increase the State budget, according to Minister of Natural Resources and Environment Pham Khoi Nguyen.

A Prime Minister decree facilitating the Law on Minerals indicates that the Ministry of Natural Resources and Environment (MONRE) is building a new legal framework for the industry to change toward a market mechanism.

Nguyen said that while mineral exploitation made uo 30 to 40 per cent of economic growth in many other countries, the industry had not yet caught on to the market mechanism, which mainly relied on an “ask- and-receive” kind of attitude.

“The ‘ask-and-receive’ mechanism can bring profits to a larger group of people, but on the other hand, public property will be lost and infrastructure broken,” said Nguyen.

Therefore, the ministry would consider turning the information into one kind of service to reduce corruption and improve administrative procedures.

Statistics from the Ministry of Natural Resources and Environment (MONRE) show that incomes from land to the State budget has increased VND30 trillion (US$1.7 billion) each year, six times higher than before land auctions were applied in 2005.

Based on the huge benefits available from changing the mechanism of the land industry, Nguyen said that providing information on land, the environment and mineral resources would contribute the same amount of income as the gas and petroleum industry to the State budget over the next 10 years.

Nguyen said that in conducting the policy of commercialisation to the industry, the ministry had asked its units to make action plans for the industry.

The Law on Minerals had recognised auctions as one of the ways to go about mineral exploitation since its enactment in 1996. In reality, mineral exploration and exploitation has mainly been conducted by the State.

“This is no longer suitable to our current situation, in which the market mechanism is what we are heading towards,” said the head of the Legal Department under the Department of Geology and Minerals, Le Ai Thu.

Under the new decree, the fee for exploration was VND50,000 ($2.5) per hectare for the first year, VND80,000 ($4.2) for the second year and VND100,000 ($5.2) in the third and fourth years.

“Businesses will have more responsibilities and will have to try their best in exploitation, so as not to waste natural resources,” he said.

Viet Nam has discovered 5,000 mines with 60 minerals, including those important to industries such as oil, coal, apatite, iron, copper, aluminium, lead and zinc.

With a newly found 500 million tonnes of titanium last year, the nation must now pay attention to how to exploit it and to how it can use its natural resources effectively, while protecting the environment and enriching the nation.

Thu said that the department was studying a legal framework for the tender and would have it completed by November this year.

In another movement, MONRE also strengthened its management to reorganise environmental activities in the country.

Under MONRE’s plan, the ministry would strengthen inspections in the four fields of land, environment, minerals and water resources this year

In line with the land inspections and the nationwide planning programme, the ministry would also check violations of land use and improper exploitation.

In terms of environmental control, the ministry will check businesses in the three river valleys of Cau, Day-Nhue and Dong Nai, where lies some of the country’s worst pollution.

Nguyen said that the ministry would work with businesses blamed for serious pollution in these areas to find solutions to the problem.

He also said that in the near future, the ministry would also look over the registration process of mineral exploitation in State offices and businesses.

“Protection of the environment and of our natural resources is a must for a good development strategy. We cannot ignore the negative effects of past policies, and changing them for the future will reap huge economic benefits today,” said Nguyen.

Tags: Vietnam Mineral rights auction, Vietnam mining