Value Compensation Model for Mineral Resources and International Experience

A clearly defined property rights is a prerequisite to value compensation of mineral resources.In this paper we proposed a theoretical framework on value compensation of mineral resources in which the property rights of mineral resource are shared by three principal parts including its owner,the individual who holds mining rights and the citizen living around the resource areas respectively.The value of mineral resource is consisted of marginal user cost (value of owner rights),marginal direct cost (value of exploration and mining rights) and external damage cost (value of the residents environmental rights).Therefore,the effective compensation to each part of the values as represented by different principal parts of property rights,is a key to sustainable development of mining industry.The theoretical framework is used to figure out the mechanism related to value compensation of mineral resources in the market-oriented countries.We found that in these countries,a major approach compensating the rights of mineral owner is to pay them mineral rents,which comprise royalties,rents and bonus.The value of exploration rights is achieved in the principle of “who invests,who benefits”.In the meanwhile,the fiscal subsidies and preferential taxation ensure value compensation of mining rights.According to the rule of “polluters pay”,the mining firm is under obligation to compensate the citizens affected by the mining for the damages.Usually,value compensation mechanism of mineral resource takes two ways,one is to bargain between the developers and surrounding communities,and the other is to stipulate a unified compensation policy and formula by the government.And the implementation of mining firms compensation obligation relies on the effective administrative monitoring and financial arrangements.Such a compensation system has been established through continuous trial in the long-term mineral development in developing countries,which has significant meaning for China although some concrete instruments may not be suitable for the context of Chinese culture and legal setting.