The Notice 2009 clarify the mineral zones into exploration zones and mining zones, both of which are further divided into encouraged, restricted and forbidden zones. The exploration right assignment will be in the model of zoning. The thresholds for the exploration and mining will be lifted to a higher level, which will forces those lagging behind entities out of the market. These will be uniformly applied to the domestic and international CBM investors. Furthermore, the Notice 2009 emphasizes that the mineral right should be granted in accordance with the plan and, generally speaking, there will be only one entity in one mining area. For the same mining area with grants of more than one exploration rights, those right holders must be integrated into one entity when they start the mining operation. For the foreign CBM investors, the first step is to make sure that their exploration zone will be defined as “one mining zone” and there are no other granted and conflicted exploration rights or mining rights. Otherwise, they can not escape from the destiny of integration organized by the local government in accordance with the Notice 2009. There is no doubt that the government has the decision right to define the “mining zone”, the standard of which has not been clear now.

We also notes that CBM is administered by the MLR, not like the coal by its local branches. How to handle these conflicts between CBM and coal administration will definitely be a challenge to the MLR and its branches. It is reported that a new CBM administration regime is in consideration. But how it will affect the current integration is unclear at this stage.

All the above is the opinion of the author himself, which does not stand for the opinion of the organization where the author is employed. And this article is only the general comment but not composed of legal opinion. For more detailed information and formal opinion, please contact the author byedwinleezhiguo@gmail.com>, or 0086-1501 001 7763.