China collected 5.8 billion yuan (about US$726 million) from mining enterprises in 2006 as compensation for the use of mineral resources, said the Ministry of Land and Resources on Tuesday.

Statistics show that resource-rich provinces like Heilongjiang, Shandong, Shanxi, Henan and Xinjiang Uygur Autonomous Region handed in 3.4 billion yuan of compensation fee last year, accounting for 59 percent of the total 5.81 billion yuan.

An official with the ministry said the increase in the fee collection was mainly due to the growth of the mining sector with prices for mineral products maintained at a high level.

Last year China's output of raw coal grew eight percent to 2.38billion tons, crude oil edged up 1.7 percent to 184 million tons, natural gas rose 18.7 percent to 58.55 billion cubic meters and crude steel surged 19.7 percent to 422.66 million tons.

The compensation system for using mineral resources was initiated in 1994 to provide extra funds for exploration and protection of the mineral resources in the country.

The compensation fee levied upon mining enterprises is collected in proportion to their sales revenue.

Half of the compensation fee goes to the local provincial governments while the other half is handed in to the central government. With autonomous regions, the central government only takes 40 percent.

There has been a steady increase in compensation fees in recent years. The country received 4.3 billion yuan from mining enterprises in compensation for using the mineral resources in 2005. The figure was 1.75 billion yuan in 2001.

(CRIEnglish.com April 4, 2007)