DECISION

APPROVING THE SCHEME FOR EXPLORING, EXTRACTING, PROCESSING AND USING MINERALS AS BUIDING MATERIALS IN VIETNAM BY 2020

THE PRIME MINISTER

Pursuant to the Law on Government Organization dated December 25, 2001;

Pursuant to the Law on Minerals dated March 20, 1996 and the Law on Amendment and Supplementation to several articles of the Law on Minerals dated June 14, 2005;

Pursuant to the Prime Minister’s Decree No. 160/2005/ND-CP dated December 27, 2005 on providing specific provisions and guidance on implementation of the Law on Minerals and the Law on Amendment and Supplementation to several articles of the Law on Minerals;

After considering the request of the Minister of Construction,

HEREBY DECIDES

Article 1. To ratify the scheme for exploring, extracting, processing and using minerals as building materials in Vietnam by 2020, including the following main contents:

1. Objectives

a) Consider the scheme for exploring, extracting, processing and using minerals as building materials as the legal basis for State-sanctioned competent agencies’ grant of permissions for mineral mine exploration and extraction with the aim of exploiting minerals efficiently and for appropriate purposes, and sustainably developing the building material industry; provide favorable conditions for investors and enterprises in applying for permissions for exploration, extraction and processing of mineral mines over periods of time from now to 2020, and serve as the basis for post-2020 building material industry development orientation;

b) Assess the current state of mineral resources used as building materials; determine the required minimum standards for reserve of minerals which are going to be explored, mined and processed from now to 2020 and the capability of meeting mineral resource demands; identify the list and progress of exploration, extraction and processing of mines over time periods from now to 2020 as well as define mineral mines or mineral extraction regions as national natural resource reserves for the purpose of meeting the growing demand in the building material industry in Vietnam by 2020 and later on.

2. Viewpoints

a) Viewpoints on the mineral exploration

- The scheme for exploring, extracting, processing and using mineral resources as building materials should pave the way for legal bases for the work of managing grant of permissions for mineral mine exploration and extraction with the aim of meeting the nationwide demand for materials used in building material industry for the period from now to 2020 and later on. Exploration of mineral mines should be carried out 5 – 10 years prior to commencement of mineral mine extraction;

- The scheme for exploring, extracting and processing mineral resources as building materials must meet the demand for raw materials for building material manufacturing factories which currently exist and are planned to come into existence for the period from now to 2010 and 2020; correspond to the scheme for socio-economic development across the nation and territorial regions; conform to the master plan for development of the building material ‘industry in Vietnam by 2020 which is submitted by the Ministry of Construction to request the Prime Minister’s approval;

- Prioritize prospecting and exploring for minerals at mines or distribution areas of mineral resources within regions where the building material manufacturing is located, or nearby zones; at those that have convenient mining conditions and ensure the solidity and efficiency as well as none of environmental impacts;

- Exploration of specific mineral mines for building materials should be expanded to peripheral areas or the proximity of mineral mines. Prospecting for underground natural resources should be aimed at assessing total mineral deposits found in ore bodies, lengthening the mine life and avoiding a waste of natural resources.

b) Viewpoints on the effective exploitation of natural resources

- In order to increase the efficient exploitation of natural resources, mineral mines with high mineral reserve should be intended for the manufacture of high-value building materials rather than that of normal ones. The following types with high level of natural resource potential shall be allowed for export, including post-processed and enriched white sands, dolomites, walling and paving stone blocks, after the advanced quarrying technology is applied to improve the product quality. All types of mineral resource with high quality standards but low reserve shall not be allowed for export to serve the purpose of storing spare building materials for long-term use in the future, including refractory clay, white clay and feldspars;

- Mines composed of two or more minerals need the general extraction method in order to make best use of natural resources;

- The proper and effective mineral extraction method must be developed in order to minimize adverse effects on environment, scenery and collect all minerals.

c) Viewpoints on better use of all resources for exploration, extraction and processing of minerals used as building materials

- Mobilize funds and take full advantage of the capability of domestic and foreign organizations or individuals involved in exploration, extraction and processing of minerals used as building materials as prescribed by the Law on Minerals;

- Capitalise on the scientific and technical ability and workforce and autonomy of competent organizations to boost the prospecting, exploration, extraction and processing of material resources used as building materials;

- Cooperate with international organizations in making changes to state-of-the-art technologies applied in the extraction and processing of mineral resources used as building materials.

d) Viewpoints on the environmental protection and sustainable development

- Develop the industry of exploration, extraction, processing and exploitation of mineral resources used as building materials, which is required to conform to regulations on protection of natural heritages, historical remnants, archaeological relics, valuable cultural structures and tourist attractions and ecological reserves;

- Apply advanced technology processes of exploration, extraction and processing of minerals in order to minimize the negative impact on environment and scenery; carry out backfilling works after mineral extraction, environmental remediation or reclaim areas of completed mineral extraction and use land properly for people’s livelihood;

- Because the scheme for exploring, extracting and processing minerals used as building materials is considered an orientational and open plan, timely supplements or amendments are required during the process of implementation as well as it should be updated and improved over periods of time.

3. Scheme contents

a) Mineral resources used as building materials in Vietnam

Types of mineral resources used for the manufacture of building materials shall be intended for exploration, extraction, processing and exploitation by 2020 within scope of projects, including kaolin, white clay, feldspar, refractory clay, white sand, dolomite, bentonite clay and tiling and walling stones. Below is the general table of mines and minerals used for the manufacture of building materials across the nation for which have been prospected and explored:

The general summary of mines and minerals used for the manufacture of building materials which are classified by 8 economic regions is given in the Appendix I.

b) The required weight of minerals that need to be prospected for and mined in order to meet the demand for raw materials used for the manufacture of building materials from now to 2020 shall be specified as follows:

- The required weight of minerals that need to be prospected for:

+ Kaolin: by 2010: 9.4 million tonnes; the period from 2011 to 2015: 3.2 million tonnes; the period from 2016 to 2020: 11.2 million tonnes; total: 23.7 million tonnes;

+ White clay: by 2010: 10 million tonnes; the period from 2011 to 2015: 6 million tonnes; the period from 2016 to 2020: 16.7 million tonnes; total: 32.7 million tonnes;

+ Feldspar: by 2010: 40 million tonnes; the period from 2011 to 2015: 15 million tonnes; the period from 2016 to 2020: 29 million tonnes; total: 84 million tonnes;

+ Refractory clay: by 2010: 111,000 tonnes; the period from 2011 to 2015: 283,000 tonnes; the period from 2016 to 2020: 221,000 tonnes; total: 615,000 tonnes;

+ White clay: by 2010: 8.4 million tonnes; the period from 2011 to 2015: 7.4 million tonnes; the period from 2016 to 2020: 3.7 million tonnes; total: 19.5 million tonnes;

+ Dolomite: by 2010: 2.3 million tonnes; the period from 2011 to 2015: 2 million tonnes; the period from 2016 to 2020: 1 million tonne; total: 5.3 million tonnes;

+ Block stone: by 2010: 15 million m3; the period from 2011 to 2015: 14 million m3; the period from 2016 to 2020: 22 million m3; total: 51 million m3.

- The required weight of minerals for which the prospecting and processing need to be expanded:

+ Kaolin: by 2010: 104 thousand tonnes; the period from 2011 to 2015: 35 thousand tonnes; the period from 2016 to 2020: 124 thousand tonnes; total: 263 thousand tonnes;

+ White clay: by 2010: 200 thousand tonnes; the period from 2011 to 2015: 120 thousand tonnes; the period from 2016 to 2020: 330 thousand tonnes; total: 650 thousand tonnes;

+ Feldspar: by 2010: 792 thousand tonnes; the period from 2011 to 2015: 297 thousand tonnes; the period from 2016 to 2020: 577 thousand tonnes; total: 1,666 thousand tonnes;

+ Refractory clay: by 2010: 3,060 tonnes; the period from 2011 to 2015: 7,859 thousand tonnes; the period from 2016 to 2020: 6,138 thousand tonnes; total: 17,057 thousand tonnes;

+ White sand: by 2010: 233 thousand tonnes; the period from 2011 to 2015: 205 thousand tonnes; the period from 2016 to 2020: 102 thousand tonnes; total: 540 thousand tonnes;

+ Dolomite: by 2010: 64 thousand tonnes; the period from 2011 to 2015: 56 thousand tonnes; the period from 2016 to 2020: 28 thousand tonnes; total: 148 thousand tonnes;

+ Block stone: by 2010: 100 thousand m3; the period from 2011 to 2015: 90 thousand m3; the period from 2016 to 2020: 145 thousand m3; total: 335 thousand m3;

c) The scheme for exploring, extracting, processing and using minerals as building materials by 2020.

For the period from now to 2020, the scheme for exploring, extracting, processing and using total reserve of minerals for the manufacture of building materials shall be specified as follows:

Details about the scheme for determination of reserve of explored minerals used for the manufacture of building materials by 2020 are given in the Appendix II; details about the scheme for extraction of minerals from mines supplied to mining and processing facilities are given in the Appendix III.

d) The zoning of mineral mines used for storing spare minerals for building material manufacturing industry.

The list and reserve of mineral mines used for storing spare minerals for building material manufacturing industry are given in the Appendix IV. If mineral mines which have been intended for the building material industry are used for other purposes, which generates higher efficiency, their use for such purposes will be allowed.

4. Solutions to implementation of the scheme for exploring, extracting and using minerals as building materials in Vietnam by 2020

a) Solutions regarding intensified and consistent state management of mineral resources from the central to local administrative level

- The Government shall consistently manage the result of exploration and extraction of minerals used as building materials; fund the planning and basic geological investigation regarding mineral resources; facilitate organizations or individuals’ involvement in exploration and extraction of minerals used as building materials. Within assigned functions and duties, the Ministry of Natural Resources and Environment shall carry out ongoing perfection of legislative documents and administrative modalities as well as delegation of power and assignment of duty to pay compensations for land expropriation with the intention of accelerate grant of permissions for mineral exploration and extraction; improve on regulations on natural resource severance tax and environmental protection and backfilling expenses. The Ministry of Construction shall direct, inspect and make periodic review report on implementation of the scheme and revise the scheme. Local authorities shall carry out management and monitoring of mineral exploration and extraction, environmental remediation and avoid overlapping with other schemes;

- Restrictions on exploration of mineral mines or ores should not be imposed. In the coming time, it is necessary to set out eligibility requirements for grant of permissions for mineral exploration and extraction with the aim of simplifying and making application procedures known to the public as well as less time-consuming to enterprises. When approving application for permissions for mineral extraction, project owners are bound to manufacture products conforming to high quality standards that manufacturing facilities can use without needing to perform re-processing;

- A close cooperation between Ministries, departments and provinces is essential to grant of permissions for extraction of minerals from several mines and impose proper strict sanctions to assist the inspection and supervision after grant of permissions for mineral extraction activities which force licensed facilities to strictly comply with regulations on mineral resource extraction, exploitation, environmental remediation and to send annual reports to competent authorities.

- Communication and dissemination of laws on mineral resources must be intensified, especially for places where minerals and mineral-related activities are present.

b) Solutions regarding investment capital mobilization

The financing resources for exploration, extraction and processing of minerals used as building materials shall be mainly derived from self-arranged funds of building material manufacturing enterprises, investors’ capital and loans taken out from domestic and foreign commercial banks. Enterprises are encouraged to mobilize capital by participation in securities markets (by means of construction bond or stock issuance). The list of mines and minerals contained in mines specified in the scheme for exploring, mining and processing mineral resources throughout provinces must be announced in order to call for investment in exploration and organize the work of mining such mineral resources for the manufacture of building materials.

c) Solutions regarding regulatory system

- Improve on legislative documents relating to mineral exploration and extraction activities; establish rules and regulations on mineral inspection, exploration as well as mechanism for bidding on areas of exploration and extraction of mineral resources used as building materials;

- Adopt incentive policies to encourage investment in mining and processing equipment and technology in order to exploit mineral resources for the purpose of manufacturing building materials;

- Provide risk insurance for organizations or individuals engaged in mineral exploration activities on the basis of establishing the fund for insurance against risks incurred from mineral exploration activities in order to encourage project owners to increase the reliability in determination of mineral reserve, mine quality and minimize possible risks from mineral exploration, extraction, processing and exploitation;

- Create the cooperation between specialized schools and organizations having proper competence, specializing in surveying, exploration, extraction and processing of minerals used as building materials in order to develop the plan to train executive and engineering employees who major in mineral exploration, extraction and processing.

d) Solutions regarding scientific, technological and environmental issues

- Stimulate research into, development and invention of equipment and machinery used for mineral exploration and extraction in conformity with domestic requirements;

- Perform research into and establishment of technology processes for mineral exploration and extraction and environmental remediation for mines after the end of exploration stage;

- Apply advanced exploration and processing technology to maximally increase the mineral resource collection coefficient and post-processed product value, improve the efficiency, quality and competitiveness of mineral products. Intensify the deep processing of kaolins and feldspars with a view to making them available for the manufacture of building materials without needing imports; of white sands and block stones in hope of manufacturing high-value exports;

- Expand international cooperation, especially in applying mineral extraction and processing technologies as well as transferring technologies for the extraction and processing of mineral resources used as building materials;

- Offer the Government’s incentive and encouragement policies for investment in mineral exploration and local processing projects located at areas faced with socio-economic difficulties or those faced with extreme socio-economic difficulties; projects to which advanced techniques and technologies are applied and those which conform to environmental standards, manufacture high-value products and generate high socio-economic efficiency; projects for processing of minerals to meet demands for domestic consumption and export.

5. The demand for investment financing for exploration, extraction and processing of minerals used as building materials

Total investment capital for exploration of ore minerals used as building materials for the period from now to 2020 shall be specifically defined as follows:

Summary of demands for investment financing for exploration, extraction and processing of minerals from mines used as building materials for the period from now to 2020 shall be defined as follows:

The capital resources for exploration, extraction and processing of minerals used as building materials shall be mainly derived from self-arranged funds of owners of mineral exploration and extraction projects.

Article 2. Implementation

1. The Ministry of Construction carrying out state management of exploration and exploitation of minerals used for the building material manufacturing industry shall assume the following responsibilities:

a) Disseminate and implement this scheme after obtaining the approval from the Prime Minister; direct and inspect implementation of the approved scheme; make periodic performance reports and adjust the scheme in order to ensure the alignment and conformity with the current state of socio-economic growth in the country and international integration roadmap. Propose regulatory systems for stable and sustainable development of exploration and processing of minerals used for the manufacture of building materials;

b) Update, supplement and improve the general scheme for developing building materials by 2020 as a basis for basic geological investigation and extraction of minerals on time and on proper areas;

c) Issue regulations on standards, processes and technologies applied to extraction and processing of minerals used as building materials;

d) Reform the work of administration of mineral resources which emphasizes on the current state of mineral resources, efficiency in exploration of minerals from mines used for the manufacture of building materials, mineral quality, reserve, environmental impact, update on any increase or reduction in the quantity of mineral deposits classified by mineral resources and ore reserves at all mineral grades, ore quality and information about strategies and policies on national resources, socio-economic development guidelines and policies throughout the country and local areas where mineral resources exist and are used for the manufacture of building materials. This administration method shall be consistently applied throughout the country and the natural resource administration system shall be put under the control of the Ministry of Construction.

2. The Ministry of Natural Resources and Environment tasked with state management of basic investigation, exploration and grant of permissions for exploration and extraction of minerals from mines shall assume the following responsibilities:

a) Publicly release the list of investigated and explored mines containing minerals used for the manufacture of building materials;

b) Accelerate the activities of basic geological investigations to search for minerals used for the manufacture of building materials in accordance with the proposal for basic geological investigations of mineral resources by 2015 with vision to 2025 which has been approved by the Prime Minister;

c) Collaborate with local authorities to localize and publicly disclose information about possible mineral distribution areas in order to protect resources and facilitate the mineral exploration and extraction whenever necessary;

d) Conduct researches which will then be submitted to the Prime Minister to ask for approval of any amendment or modification to several articles of the Decree No. 160/2005/ND-CP dated December 27, 2005 with a view to delegating more powers to local authorities, promoting responsibilities taken on by state agencies, carrying out ongoing reform of administrative procedures and processes for grant of permissions with the aim of creating best solutions which help to shorten procedures applied to enterprises. In order to ensure the implementation of stated regulations, sanction against licensing agencies, enterprises and for natural resource protection should be imposed as an effective tool to manage the grant of permissions for mineral exploration and extraction;

dd) Collaborate with the Ministry of Finance to further perfect regulations on natural resource severance tax, and costs incurred from environmental protection and backfilling activities after mineral extraction;

e) Provide regular update on the quantity and reserve of mines containing minerals currently prospected for and extracted for the purpose of manufacturing building materials; organize activities of checking mines which have been explored to determine mineral reserves and from which minerals have been extracted across the nation;

g) Strengthen mineral inspections at all administrative levels; intensify post-inspection activities to promptly discover and determine to impose penalties for any violations during the process of administration, mineral exploration, extraction and exploitation for the purpose of ensuring effective exploration and exploitation of mineral resources, safety for scenery, environment and social order and security.

3. The Ministry of Planning and Investment

Preside over and collaborate with the Ministry of Construction and the Ministry of Natural Resources and Environment in establishing rules and regulations on bidding for grant of the right to explore, extract and process minerals from mines used as building materials, and incentive and encouragement policies on investment, administration, exploration, extraction and processing of minerals used as building materials.

4. The Ministry of Finance:

a) Allocate funds from the state budget to finance basic geological investigations of minerals contained in planned areas for the purpose of manufacturing building materials;

b) Preside over, collaborate with the Ministry of Natural Resources and Environment and the Ministry of Construction in establishing and adopting policies in order to ensure local rights and interests gained from extraction of mineral resources used as building materials; establish rules and regulations as well as found the fund for insurance against mineral extraction risks.

5. The Ministry of Industry and Trade:

Conduct researches as the basis for proposing incentive policies to encourage investment in mining and processing equipment and technology in order to exploit mineral resources for the purpose of manufacturing building materials and gaining post-processed products meeting accepted standards.

6. The Ministry of Science and Technology:

Conduct research into application of advanced mineral extraction and processing technologies as well as promote invention of equipment or machinery assisting mineral exploration and extraction activities in conformity with domestic conditions.

7. The People’s Committee of centrally-affiliated cities and provinces:

a) Proactively cooperate with Ministries such as the Ministry of Natural Resources and Environment, the Ministry of National Defence, the Ministry of Construction, the Ministry of Culture, Sports and Tourism, and the Ministry of Agriculture and Rural Development, on determination and localization of banned, temporarily banned or restricted areas of mineral-related activities in order to grant approval as early as possible or request competent authorities to grant approval, to facilitate state management of minerals in general and grant of permissions for mineral-related activities in particular;

b) Manage and supervise mineral exploration, extraction and processing, environmental remediation, and avoid overlapping with other schemes to be executed in the same local area;

c) Manage and protect mineral resources used as building materials throughout a local area which are contained in unoccupied mines; prevent and fight against illegal mineral extraction;

d) Set up and submit the scheme for exploring, extracting, processing and using minerals as common building materials under their decision-making authority to the People’s Council at the same level for approval;

dd) Intensify inspection and checking of mineral exploration, extraction and processing, and detect and promptly handle any violation during the process of performing such activities within a local area;

e) Integrate scheme contents into specific stages of the annual and 5-year plan as well as local economic development scheme for the purpose of implementation;

g) Promote communication and dissemination of laws on mineral resources, especially for places where minerals are available and mineral-related activities take place.

8. Organizations or individuals involved in exploring, mining, processing and using minerals as building materials:

Organizations or individuals involved in exploring, extracting and processing minerals used as building materials must comply with procedures and processes for application for grant of permissions for mineral exploration and extraction as stipulated by the Law on Minerals, the Law on Amendment and Supplementation to several articles of the Law on Minerals, the Government's Decree No. 160/2005/ND-CP dated December 27, 2005, and the Decision No. 06/2006/QD-BTNMT of the Ministry of Natural Resources and Environment on promulgating regulations on classifying solid minerals by mineral reserves and resources.

Owners of mineral exploration and extraction projects shall take responsibility to prepare environmental impact evaluation reports, which occurs at the same time with the process for making feasibility study reports of projects for submission to competent state agencies for approval under the provisions of the Government’s Decree No. 140/2006/ND-CP dated November 22, 2006 on stipulating environmental protection that exists at stages ranging from preparation, appraisal, approval and execution of development strategies, schemes, plans, programs and projects. Regularly put investments in science and technology in order to improve the efficiency in mineral exploration, extraction and exploitation as well as avoid wasting mineral resources.

Article 3. This Decision shall enter into force after 15 days from the date on which it is posted on the Official Gazette.

Article 4. Ministers, Heads of Ministry-level agencies, Heads of Government agencies, and Presidents of the People’s Committees of centrally-affiliated cities and provinces, shall be held responsible for enforcing this Decision./.