By Mining & Resources Dispute Resolution Team, King & Wood Mallesons
To acquire mining rights through equity transfers is a common investment scheme in the mining industry. However, its legal effect is not without problems. This article provides a brief analysis of this scheme and the related legal issues.
Transfer of Mining Rights through Equity Transfers: the Mechanism and Its Potential Problems
To summarize, the typical scheme to transfer mining rights through equity transfers is as follows: the seller transfers all or a majority of shares of a mining company to the buyer, who subsequently becomes the sole or majority shareholder of the mining company. Through its ownership of shares in the mining company, the buyer can exercise the mining company’s mining rights indirectly.
Continue Reading Contract Validity in the “Transfer of Mining Rights through Equity Transfers”