A political advisor said on Monday that China should reform its mineral resources management system, as the current licensing system fails to reflect the true value of mine assets.

"The licenses only give licensees the rights to explore for mineral resources or develop mines, not the ownership of the resources. But the licensee are not paying for the resources they sell, which means the state's ownership of all mine assets is never realized," said Wei Xiaochun, a member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), a political advisory body.

Wei said this flaw in the design of the system is the fundamental reason behind high incidence of accidents in Chinese mines.

The mine owners have no motivations to invest in safety and environment, because their long-term interests is not well defined. They will try to get as much as possible from their mines while they can, said Wei, a political advisor coal-rich Shanxi Province in north China.

To take the coal mining sector as an example, the large number of small coal mines, where safety conditions are usually very poor, has long been a threat to the country's production safety.

China has about 16,000 coal mines, 90 percent of which are small ones, and their safety record is far worse than large operations.

Instead of the current licensing system, Wei said mining rights should be sold through open biddings.

A secondary market should be established to facilitate transfer of such mining rights, he said, adding that frequent private transactions have made effective management difficult, if not possible.

(Xinhua News Agency March 9, 2009)