China unveils mining law enforcement to secure mineral resource supply

It serves as the supporting implementation rule for China's mineral resources law, which came into force last July, according to the State Council's announcement. The regulation was drafted by the Ministry of Natural Resources in March 2025, approved by the State Council on May 9 this year, and will officially take effect on June 15, Mysteel Global has learned.

A key focus of the regulation is to channel more private capital into mineral development through institutional improvements, thereby enhancing China's future recoverable mineral reserves, Mysteel notes.

Specifically, it introduces three key institutional changes: mineral rights will be granted primarily through competitive bidding rather than administrative approval to break long-standing local protectionism and industry monopolies; mineral exploration license holders will automatically obtain mining rights upon discovery of commercially viable deposits, without having to go through complex competitive procedures again; and mineral rights will be separated from mining permits and recognized as independent property rights that can be freely traded and used as collateral for financing, which enhances capital stability.

The new regulation also outlines a government plan to expand China's national mineral resource reserve and to establish emergency response systems to address potential supply chain risks arising from global geopolitical rivalries.

China remains heavily reliant on imports for many key minerals, Mysteel Global has learned. For example, the country's external dependency ratios for lithium, cobalt, and iron ore all exceed 70%, while these minerals are critical inputs for emerging technologies such as new energy vehicles and AI terminal equipment.

In addition to securing supply, the expansion of strategic mineral reserves is expected to generate policy-driven demand growth, which in the long term is likely to underpin the prices of nonferrous minerals, especially those of copper, aluminum, and lithium where global supply is already tightening, Mysteel's survey suggests.

For ferrous minerals, however, the regulation is expected to provide only limited policy support, as the generally low grade of China's domestic iron ore and higher mining costs make it difficult for the country to significantly reduce its reliance on imports of this key steelmaking ingredient, Mysteel Global notes.

For the coal industry, the regulation's mandatory requirements on ecological restoration in mining areas, along with stricter oversight of mines' environmental protection and safety compliance records, are expected to accelerate industry consolidation.

It clarifies that the ecological restoration obligations of mining right holders will not be extinguished even if their mining rights cease to exist, and mining operators are required to set up a supervised, dedicated bank account and make full provisions for restoration costs.

With environmental costs incorporated into operating expenses, mining companies will be pushed to adopt cleaner production technologies, potentially driving out non-compliant capacity and raising industry concentration. Mysteel projects the concentration rate of China's coal industry is expected to rise from the current 45% to 60% in the coming five years.

Looking ahead, the implementation of the regulation will likely reshape China's mineral market landscape, laying a solid resource foundation for the long-term development of China's emerging industry, Mysteel believes.

Written by Anthea Shi, shihui@mysteel.com

Edited by Alyssa Ren, rentingting@mysteel.com