The Prime Minister to direct strengthening the management of mineral mining rights auctions in Vietnam

The Prime Minister to direct strengthening the management of mineral mining rights auctions in Vietnam (Internet image) 

Regarding this issue, LawNet would like to answer as follows:

On November 11, 2023, the Prime Minister issued Official Telegram 1087/CD-TTg, strengthening the management of auctioning the right to exploit minerals for common construction materials.

The Prime Minister to direct strengthening the management of mineral mining rights auctions in Vietnam

Specifically, to manage the auction of mineral exploitation rights as common construction materials strictly and in accordance with the law, the Prime Minister has the following instructions:

(1) Chairman of the Hanoi People's Committee is directed to immediately review the entire process of surveying, evaluating mine reserves, preparing documents, and organizing auctions of mineral exploitation rights in 3 sand mines: Lien Mac, Chau Son, and Tay Dang-Minh Chau, ensuring strict and legal compliance and absolutely not allowing organizations and individuals to take advantage of loopholes in management work to seek profit, loss, waste, or group benefits;

Promptly detect and strictly handle cases of violation of legal regulations in mineral mining rights auctions, preventing auction abuse to push up prices, cause market disturbance, and profiteering, and report to the Prime Minister before November 20, 2023.

(2) The Ministry of Natural Resources and Environment presides and coordinates with the Ministries of Finance, Construction, Justice, and People's Committees of provinces and centrally-run cities urgently review and inspect the activities of organizing auctions of mineral mining rights, especially minerals used as common construction materials that show unusual signs; winning auctions are many times higher than the starting price; handle cases of violation of legal regulations according to authority on auctions for mineral exploitation rights;

Timely detect inadequacies in legal regulations to advise and propose competent authorities to amend, adjust, supplement, do not allow profiteering to occur, and at the same time strictly handle acts of taking advantage of auctions to cause market disturbance; Propose solutions to limit negative impacts (if any) and report them to the Prime Minister.

(3) The Ministry of Public Security directs local police to strengthen their understanding of the situation, promptly detect, prevent, and strictly handle violations of legal regulations in the auction of mineral mining rights.

Procedures and principles for conducting auctions of mineral mining rights

Specifically, Article 21 of Decree 22/2012/ND-CP stipulates the order and principles of conducting auctions of mineral mining rights as follows:

(1) At the beginning of an auction, the auction council secretary shall introduce auction council members and representatives of relevant agencies and organizations; introduce the auction rules; announce the list of eligible bidders; call the roll of bidders and bid makers; and answer inquiries (if any).

(2) The auction council president or auctioneer shall conduct the auction by direct secret bid through uninterrupted bidding rounds. The auction only closes after the auction winner is chosen.

The auction winner is the single organization or person offering the highest bid compared to the reserve price after all bidding rounds or the organization or person winning the draw in the case specified at Point a, Clause 5 of this Article.

(3) After each bidding round, the auction council president or auctioneer shall publicly notifies the highest bid of the round. When two or more equal highest bids are offered, the auction council president or auctioneer shall continue distributing bid notes for another bidding round.

The reserve price of the next bidding round is the highest bid of the previous round. The bid written in a bid note  is valid when it equals the reserve price plus the bid increment multiplied by an integer.

(4) The progress of an mineral extraction right auction shall be recorded in writing. After the auction, the auction council president or the auctioneer shall publicly notify the council’s conclusions and the auction winner. The auction winner must sign the auction record right at the auction.

(5) Special cases

- If after three consecutive bidding rounds, there are still two or more bidders offering the same highest bid, the auction council president or auctioneer shall hold a draw to choose the auction winner;

- When the auction winner refuses the auction winning result, the bidder offering the second highest bid shall be considered and approved by the auction council to be the substitute winner;

- When the substitute winner refuses the auction winning result, the auction council shall make the written cancellation of the auction result and report the case in writing to the agency competent to issue licenses for consideration and decision.

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