- By the end of 2010, the integration must be completed in accordance with the approved integration plan. And the mineral resources administration regime must be established. The preliminary long-lasting regime on the mineral resources development needs to be set up;
- Beginning from 2011, the integration will be under the daily administration.
The entity that will acquire the integrated CBM zones will be those having strengths in capital, technology, management and social liability. The Notice 2009 also states that the integrating entity will be mainly from those located in the integrated areas or zones. The CBM exploration right holders, such as the foreign investors, need to open eyes on the coal mines or CBM zones surrounding or adjacent to theirs. In some cases, the integrating entity will be the one outside the integrated zones. The government also reserve the right to withdraw the mineral right (including the exploration right to CBM) granted to the foreign investors. The question is that how to compensate those integrated CBM exploration right holders, esp. those foreign investors. The Notice 2009 is ambiguous on this. The experience in Shanxi province shows that the CBM holders have no bargain in the pricing, which will be a big risk. If foreign investor’s zone falls into the integration scope, we may anticipate that the government will treat foreign investors in a beneficial way in order to protect its reputation in the world. But we can not expect too much because the equal treatment to the domestic and international investors is the acceptable and popular way in China since the access to WTO in 2001.
The foreign investors may also have the opportunity to become the integrating entity with some approvals in coal/CBM industry. But the phenomenon like “holding without exploration” seems not allowed by the government. If the mining license is issued, the license holder must meet the requirements for the mining operation within 2 years. This will also affect those foreign investors who intend to produce CBM/CMM in China for commercial utilization.
