East China Mineral Exploration and Development Bureau Transferred 49% Equity to Private Capital, the First Case of Its Kind in China

On January 31, East China Mineral Exploration and Development Bureau transferred 49% equity to Zhongjing Industry Company, Shanghai Yunfeng Group, and Redstone Phase II Fund through share capital increase. This marked the first time in China to introduce social capital to participate in equity reform of a state-owned geological prospecting institution.

According to Shao Yi, Director of East China Mineral Exploration and Development Bureau,this time’s share capital increase will raise 2.05 billion yuan of capital. East China Mineral Exploration and Development Bureau will take advantage of its self technology strength to enlarge social capital function, further improve the company’s governance structure, and build a corporate platform with clearly defined rights& obligations and efficient operation.

It has been learned that East China Mineral Exploration and Development Bureau is a pacesetter of enterprise reform for state-owned geological prospecting institution, as early as in 2006 it has begun self-decided internal enterprise reform. In April last year, after the “Guiding Opinion of CPC Central Committee and the State Council on Classified Promotion of Public Institutions Reform” was unveiled, this Bureau was identified by the Ministry of Land and Resources as enterprise reform pilot institution in the nationwide geological prospecting industry.

By the end of 2012, the number of mining rights of East China Mineral Exploration and Development Bureau has reached 148, with an area of over 30,000 sq km, both mining rights quantity and mining rights area grew by 4.3 times and 340 plus times in comparison with those in 2006. Wherein, the number of overseas mining rights started from scratch to reach the current 99.

According to ZhongZiran, Chief Engineer of the Ministry of Land and Resources, in the classified reform of public institutions, stateowned geological prospecting institutions are involved in an endless dispute over the nature demarcation of “engaging in production operation activity” or “engaging in public welfare services”. This time East China Mineral Exploration and Development Bureau introduced social capital to reform property rights system,which holds pioneering value for reform of the entire geological prospecting industry, and provided analytical case for the classified reform of public institutions.