A state-owned enterprise in Yibin, Sichuan province subcontracted a sand quarry multiple times after acquiring it through bidding, and contractors “over-extracted” according to the contract; 8 people arrested.

According to the contract, sand mining was conducted, but due to excess quantity and time limits, it was considered “illegal mining,” and criminal responsibility will be pursued. As the actual person in charge of Yibin Huahui Commerce and Trade Co., Ltd. (hereinafter referred to as Huahui Company), Han Bo’s company contracted a labor mining business in a sand mining project led by the government and state-owned enterprises. Hundreds of millions have been invested without recouping the costs, and eight investors have been accused of “illegal mining” and successively investigated.
Procuratorial organizations accused them of “excessive quantity and exceeding time limits” in mining more than 5 million tons of sand and gravel from the Yangtze River after the “River Channel Sand Mining License” expired. Their destructive mining behavior caused the riverbank to be eroded and destroyed by the river water, resulting in irreversible damage to the ecosystem. They should be held criminally responsible for illegal mining.
Han Bo recently told The Paper (www.thepaper.cn) that as a labor contracting company, they operated according to the contract requirements and were previously unaware of the “over-mining.” They contracted the mining business from a state-owned enterprise with a license and authorization and mined sand under the supervision of relevant law enforcement departments. Now, they are under investigation by the public security department and have been approved for arrest, while the relevant state-owned enterprises that contracted the work to them are “unharmed.”
An informed source from the Nanxi District Water Conservancy Bureau confirmed part of Han Bo’s statement. On August 14, 2024, the Nanxi District People’s Procuratorate initiated a public prosecution against the Nanxi District People’s Court for “illegal mining.”
On December 3, Han Bo told The Paper that the Nanxi District People’s Court decided to postpone the trial of the case on November 25. According to the “Decision on Postponement of Trial” issued by the Nanxi District People’s Court, “During the trial, the Nanxi District People’s Procuratorate of Yibin City, Sichuan Province, suggested a postponement of the trial due to the need for supplementary investigation in this case.” The court made the above decision in accordance with relevant laws and regulations.
The sand and gravel project was subcontracted layer by layer, and mining restrictions were gradually lifted.
In 2014, the mining rights for sand and gravel in the Yangtze River in Nanxi District were transferred by the Yibin Water Conservancy Bureau, with the project’s general contractor being Yibin Nanxi Xingnan Resource Development Co., Ltd. (hereinafter referred to as “Xingnan Company”), a state-owned enterprise in Nanxi District. The company won the bidding for the sand and gravel mining rights of 5 mining areas and 9 mining points in the Yangtze River channel of Nanxi District. The period was from May 25, 2014, to May 31, 2015. The approved total mining volume was 930,000 tons, with a total transfer fee of 4.5 million yuan.
The Yangtze River sand mining sites in Nanxi District that year. (Provided by the interviewee)
After obtaining the sand and gravel mining rights, Xingnan Company did not directly carry out mining but signed a “Cooperative Operation Agreement” with its holding company, Yibin Nanxi Jiangfeng Resource Development Co., Ltd. (hereinafter referred to as “Jiangfeng Company”), transferring the entire sand mining project to Jiangfeng Company. The term was from September 2, 2014, to May 31, 2015.
The agreement stipulated that Jiangfeng Company would organize the mining (production, processing), and sales of sand and gravel in the project area and bear the expenses incurred during mining and sales. Xingnan Company would receive a profit share of 3.5 yuan per ton, with the remaining profits going to Jiangfeng Company.
Jiangfeng Company then conducted an external tender in the form of labor contracting, and Yibin Nanxi Zhongxin Equipment Leasing Co., Ltd. (hereinafter referred to as “Zhongxin Company”) won the bidding for the sand and gravel mining business at the Tuonihao mining point in the third and fourth villages of Tiantang Village, Jiangnan Town. This was one of the mining points within a mining area of the entire project.
On December 12, 2014, both parties signed the “Maliuwan Machinery Leasing and Labor Contracting Contract.” The project mainly involved machinery leasing and labor contracting for the incoming material processing site in the third and fourth villages of Peishi Township’s Maliu Village. The contract required a monthly output of no less than 5,000 tons at the dry mining site and no less than 150,000 tons at the Tuonihao water mining site. The contract was renewed annually, meaning it had been signed until December 2015, far exceeding the approved mining period.
The supplementary contract between the two parties stipulated that Zhongxin Company was responsible for coordinating and resolving issues related to the construction site and surrounding areas (including land leasing, compensation for crop damage, etc.) and bearing all expenses incurred.
Subsequently, on January 9, 2015, Huahui Company signed the “Tuonihao Sand and Gravel Mining Labor Contract” with Zhongxin Company, contracting all labor for the sand and gravel mining and transportation project in the third village of Tiantang Village. The contract term was “from the date of signing to May 31, 2015.”
The contract also required a monthly water mining output of no less than 300,000 tons, without specifying a maximum mining limit. The compensation for crop damage at the stockyard, previously borne by Zhongxin Company, was transferred to Huahui Company.
On June 6, 2015, Zhongxin Company, Huahui Company, and a third party (Party C), Mr. He, signed another “Tuonihao Sand and Gravel Mining Contract.” The contract stipulated that if the mining volume was less than 1 million tons, the resource fee would be 4.8 yuan per ton; if it exceeded 5 million tons, the fee would be 1 yuan per ton.
The contract did not specify the mining period or mining volume limit but explicitly stated that the larger the mining volume, the lower the resource fee per ton.
The upstream contractors could not pay, and cooperation continued to “expand unrealistically.”
According to the contract, Huahui Company intensified its sand mining efforts and mined millions of tons within just a few months.
During this period, on May 4, 2015, the Yibin Water Conservancy Bureau issued the “Notice on Strengthening River Channel Sand Mining Management,” stipulating that sand mining would be comprehensively prohibited in the Yangtze River channel within Yibin City’s jurisdiction starting from July 1 of that year. However, on June 6, 2015, Zhongxin Company still signed the aforementioned “Tuonihao Sand and Gravel Mining Contract” with Huahui Company and the third party, Mr. He.
Han Bo stated that at that time, Jiangfeng Company and Zhongxin Company were unable to pay the labor fees, while Huahui Company had previously invested a lot in manpower and equipment and had also advanced the land leasing and crop compensation fees for the villagers. Failing to receive the labor fees put the company at risk of losing all its investment.
An informed source from the Nanxi District Water Conservancy Bureau also confirmed that due to severe fund shortages at Jiangfeng Company, they could not pay the mining labor fees. “Instead, they paid a management fee of 7 yuan per ton to Jiangfeng Company, and Huahui Company was responsible for selling the mined sand and gravel themselves.”
By June 30, 2015, Huahui Company had mined 5.3 million tons of sand and gravel. After the Yangtze River was fully prohibited from mining on July 1, 2015, with the approval of Jiangfeng Company, Huahui Company sold 550,000 tons of sand and gravel to cover management fees, resource fees, and compensation for villagers. Han Bo said that the third-party partner, Mr. He, found it unprofitable and chose to withdraw midway.
On September 13, 2018, the Nanxi District Water Conservancy Bureau verified that Xingnan Company and Jiangfeng Company did not carry out mining according to the provisions of the sand mining license, and their severe over-mining behavior was illegal, for which they were penalized.
The “Administrative Penalty Decision” issued by the bureau stated that during the approved mining period from November 2014 to May 31, 2015, the approved mining volume for the 5 mining areas and 9 mining points was 842,000 tons, but the existing over-mined inventory was 4.823 million tons, indicating severe over-mining. The bureau imposed administrative penalties, confiscating 3.981 million tons of over-mined inventory and fining 50,000 yuan.
Han Bo said that although the administrative penalty acknowledged the illegality of Xingnan Company and Jiangfeng Company, the confiscated and fined sand and gravel were those mined by them for which Xingnan and Jiangfeng companies had not yet paid the relevant fees, causing them significant losses. In response, Huahui Company filed an administrative reconsideration, but it was not accepted due to “not meeting the qualifications of an applicant for administrative reconsideration.”
Over-mining of sand and gravel leads to corporate executives being