Notice on reaffirming the relevant policies on mineral resources exploration expenditure of mining enterprises

Departments of Land and Resources of all provinces, autonomous regions and municipalities directly under the Central Government (Department of Land and Environment Resources, Bureau of Land and Resources, Bureau of Land and Resources and Housing Management, Bureau of Land and Resources of Xinjiang Production and Construction Corps):

The State Council's "Decision on Strengthening Geological Work" (hereinafter referred to as the "Decision") emphasizes the policy of "allowing mining enterprises to collect mineral resources exploration expenses according to relevant regulations". After consultation with the Ministry of Finance, the relevant policies and regulations on mineral resources exploration expenditure of mining enterprises are hereby reiterated as follows, please urge relevant enterprises and units to implement them.

I. Financial treatment of royalties and exploration rights prices

The exploration fees and prices paid by enterprises when applying for exploration rights can be treated as mineral exploration costs.

All expenses incurred by enterprises in the process of mineral exploration shall be treated as the cost of mineral exploration when incurred. After the completion of mineral exploration, the expenses shall be treated as follows: if geological achievements are formed, they shall be treated as geological achievements; If no geological results are formed, they will be transferred to the current profit and loss.

Two, the financial treatment of mining rights use fees and prices

The enterprise obtains the mining right, and pays the mining right use fee according to the regulations, which is treated as the management fee; Enterprises should pay the price of mining rights as intangible assets in accordance with the regulations, and amortize them equally by stages during the benefit period of mining rights.

Three, enterprises in the process of prospecting and mining tools, appliances, instruments, equipment and other assets acquisition costs, who meet the standards of fixed assets, should be as fixed assets management, according to the provisions of depreciation, shall not be included in the cost and expense when purchasing fees.

Four, enterprises and geological exploration units engaged in mineral resources exploration and mining related expenses accounting treatment, in accordance with the provisions of the Ministry of Finance "on the exploration and mining rights enterprises and geological exploration units accounting treatment notice" (Caihuizi [1999] No.40).

Ministry of Land and Resources (MLR)

September 2006 1 1 day