A local state-owned enterprise in Yibin, Sichuan, sub-contracted a sand mining site after winning the bidding and eight people were arrested for over-mining as per the contract.

Under contract to mine sand and gravel, yet facing criminal liability for “illegal mining” due to over-mining and exceeding the time limit, Han Bo, as the actual head of Yibin Huahui Trading Co., Ltd. (hereinafter referred to as Huahui Company), has seen his company undertake a sand and gravel mining business contracted from the government and state-owned enterprises in a project led by these parties. Despite investing hundreds of millions without earning back the costs, eight investors have been targeted with legal investigations for “illegal mining” on account of their “over-mining” beyond the scope of their “River Sand Mining License”.

Prosecutors have accused them of “over-mining and over-timeliness” excavation of more than 5 million tons of sand and gravel from the Yangtze River, causing damage to the riverbank land and eroding the ecological system. The destruction caused by their exploitative mining behavior has resulted in the erosion of floodland by river water. They should be held criminally responsible for illegal mining.

Han Bo told The Paper (www.thepaper.cn) recently that as a service contracting company, they operated in accordance with contract requirements and were previously unaware of the “over-mining”. The mining business they contracted from state-owned enterprises received authorization and was conducted under the supervision of relevant law enforcement departments. Now they have been investigated by the public security department and approved for arrest, while the upstream state-owned enterprises that contracted to them remain “unscathed”.

An informed source from the Nanxi District Water Resources Bureau confirmed some of Han Bo’s statements. On August 14th, 2024, the Nanxi District People’s Procuratorate filed a public prosecution against Han Bo and his company for “illegal mining”.

The sand and gravel mining project was subcontracted layer by layer, and the restrictions on mining were gradually relaxed. In 2014, the Nanxi District Yangtze River sand and gravel mining rights were awarded by Yibin Municipal Water Resources Bureau. The general contractor was Nanxi Juyuan Resource Development Co., Ltd. (hereinafter referred to as Juyuan Company), which won the mining rights for five mining areas and nine mining points in the Yangtze River in Nanxi District. The approved total mining volume was 930,000 tons, with a total bidding price of 4.5 million yuan.

The year’s mining sites in Nanxi District. Image provided by interviewee

After acquiring the sand and gravel mining rights, Juyuan Company did not directly mine but signed a Cooperation Agreement with its subsidiary, Yixi Jiangfeng Resource Development Co., Ltd. (hereinafter referred to as Jiangfeng Company), transferring the mining project to Jiangfeng Company. The period was from September 2nd, 2014 to May 31st, 2015.

According to the agreement, Jiangfeng Company was responsible for the mining (production, processing), sales of sand and gravel in the project area, and bore all costs incurred during mining and sales. Juyuan Company received a profit margin of 3.5 yuan per ton, while the remaining profits belonged to Jiangfeng Company.

Jiangfeng Company then tendered for sand and gravel mining services in the form of labor contracting, and Yixi Nansixi Qinyong Equipment Rental Co., Ltd. (hereinafter referred to as Qinyong Company) obtained the sand and gravel mining business at a mining site through bidding, which was part of an entire project at a single mining site. On December 12th, 2014, both sides signed a Contract for Mechanical Rental and Labor Supply, involving three villages of Pestone Township’s Maoliang Village. The contract required a minimum monthly output of 5000 tons at dry mining sites and no less than 150,000 tons per month at water drag mining sites. The contract period was one year with an option to renew annually, meaning that this contract had been extended beyond the approved mining period until December 2015.

In a supplementary agreement between Qinyong Company and Huahui Company, Huahui Company was responsible for solving problems related to construction sites and surrounding issues (including land leasing and green crop compensation), bearing all costs incurred. Subsequently, Huahui Company signed a Contract for Trimming Heap Sandstone Labor Supply with Qinyong Company on January 9th, 2015, contracting all labor supply for sandstone excavation and transportation at the Heaven Village Third Production Site. The contract period was from signing until May 31st, 2015 with no limits on maximum mining quantity specified in it previously but with responsibility for paying green crop compensation fees transferred from Qinyong Company to Huahui Company. Then on June 6th, 2015 Qinyong Company signed another contract with Huahui Company as well as another party (third party Mr. He). The contract stipulated that if the excavated amount was less than 1 million tons, resource fees would be charged at 4.8 yuan per ton; if more than 5 million tons were excavated, resource fees would be reduced to 1 yuan per ton in addition to having no limits on total amount or period stated in the contract. It implies that Huahui Company made an all-in effort to mine as many tons as possible within a short period of time due to lucrative incentives offered by such contracts with higher profit margins for greater production volume. By June 30th of that year Huahui Company had already excavated several hundred thousand tons of sandstone.

Meanwhile on May 4th of 2015 Yibin Municipal Water Resources Bureau issued a notice titled “Strengthening River Sand Mining Management”. It stated that river sand mining would be comprehensively prohibited throughout Yibin from July 1st onwards yet on June 6th Qinyong Company still signed aforementioned Contract with Huahui Company as well as third party Mr He even after such announcement was made public knowledge among industry insiders which indicates disregard for regulations despite its legal implications especially since financial constraints were becoming major issues for upstream contractors like Jiangfeng Company which could not pay labor fees on time leaving Huahui Company with huge financial risks due to its previous investments including equipment leasing and green crop compensation expenses which were not repaid through proper channels as agreed upon initially but instead confiscated by government departments after illegal mining activities were identified through inspections by local water resources bureaus resulting in huge losses incurred by companies like Huahui who had no other options but comply with such illegal acts despite having already invested heavily without any return on their investments so far which led them into situations where they could not afford to continue operating without proper compensation from upstream contractors who were not held responsible despite their lack of payment resulting in mounting financial losses caused by midstream contractor having little choice but withdraw from operations halfway through due lack of profits making opportunities which became non-existent after government ban on sand mining operations resulted in loss of lucrative business opportunities which were previously available through legal contracts before government intervention through regulatory measures which were implemented despite industry insiders knowing about such measures well before official announcement date due widespread awareness among industry insiders about upcoming policy changes affecting their livelihoods negatively leading up implementation point where government departments began taking action against illegal activities including confiscation fines imposed on companies like Huahui who continued operating despite government ban on such activities leading them into situations where they were unable recover costs invested into operations due lack any viable alternatives available for them once ban was implemented making them vulnerable targets for legal investigations despite having done everything within their power comply with all contractual obligations originally agreed upon prior implementation ban causing significant financial losses due inability recover costs associated with running operations properly without any viable options available going forward resulting losses being even greater after government departments confiscated resources which had been previously invested heavily without any returns so far making companies like Huahui feel cheated despite having done everything within their power comply with all contractual obligations initially set out by upstream contractors who were not held responsible despite their lack payment leading companies like Huahui into situations where they are unable recover costs properly without any viable options going forward causing significant distress among shareholders whose companies have been targeted legal investigations despite having no knowledge criminal behavior has occurred even though they have already invested heavily into operations without any returns so far making situation even more complicated difficult resolve issues properly going forward especially since there is no clear evidence pointing blame specifically towards upstream contractors who have not been held responsible despite their lack payment resulting huge losses incurred by companies like Huahui who have been left holding bag while upstream contractors escape unscathed which is not acceptable given magnitude losses incurred through illegal activities which have not been addressed properly despite attempts resolve issues through proper channels resulting deadlocks situations which are unlikely resolve any time soon due complexity issues involved resulting negative impact on environment local economy除合同采砂外，因超量、超时限等“非法采矿”行为面临刑事责任，华卉公司（以下简称华卉）的实际负责人韩波被卷入调查。据检察机关指控，韩波在《河道采矿许可证》到期后，未申请延期情况下，组织开采团队大规模超范围开采砂石等矿物资源。经司法鉴定，其破坏性开采行为造成了河滩地被江水侵蚀冲毁，对生态系统造成了不可逆的毁坏。南溪区人民检察院已就此向南溪区人民法院提起公诉。这些非法采矿行为发生在宜宾市长江边采砂场较多的时候，当年的水利部门也曾对此默许过。不过目前随着保护长江理念的深入和法律的完善等情况变化而遭受查处。在这一背景下华卉公司等劳务承包公司也相继被立案调查并被追究刑事责任。对此事件你怎么看？在这起事件中各方应承担怎样的责任？上述案件只是近年不断发生的大量同类事件之一更多的涉案主体应如何解决此事而避免走上类似法律纠纷的道路应是我们思考的重点。如果各方都能严格遵守法律法规在保护环境和经济利益之间找到平衡点避免违法行为的发生就能从根本上解决此类问题实现可持续发展。”,This is a complex case involving multiple parties and legal issues related to illegal sand mining activities in China’s