The first public bidding for the excavation rights to a gold mine concluded "fairly and successfully" yesterday morning in Nanchang, capital of East China's Jiangxi Province.

Li Hongchang, vice-director of the Department of Land and Resources of Jiangxi Province, said he was satisfied with the bidding result of 2 million yuan (US$242,000) for four years of excavation.

The winning bid went to the Nanfang Mechanical Engineering Limited Company, which Li said is capable of fulfilling its promise to develop the mine "scientifically, with enough attention paid to workplace safety and environmental protection."

Before this auction, the mine was excavated without compensation to the country at all, said Li.

The publicly bidded gold mine is located in the province's Shangrao County. It was taken by the government from illegal miners in the province.

Because the mine boasts high-grade ore shallowly buried and the area has convenient transportation, its value is estimated as high as 2.2 million yuan (US$265,700).

All the money collected from the bidding will be used to establish a special prospecting fund to fuel the mining industry of Jiangxi Province even further.

Altogether four Jiangxi enterprises, which are all private stock companies and a Hong Kong limited company, participated in yesterday's bidding.

The number is much less than those who considered participation in the bid, which totaled nearly 20 at one time. It was because of large number of possible bidders that the department postponed the bid from August 8 to yesterday.

But Li said he was not disappointed.

"Instead, we have this exhilarating feeling of being trusted," he said.

The development of a mine depends heavily on careful and comprehensive investigation and study, especially in the local investment environment which involves huge financial backing. The bidding circular was published less than 10 days ago and Jiangxi has only put excavation rights for sand and stone mines to auction in the past.

"We understand many investors decided, probably at the last minute, to look on this time. But the result should have enhanced their confidence and will get more of them to participate in the mining industry of Jiangxi," said Li.

Despite this successful auction, a provincial official dismissed the possibility that more excavation rights of gold will be transferred through public bidding in the near future.

"That is expected to happen eventually, but there is no indication of fast increase so far," said Hou Kechang, director of the Mineral Development Management Division at the department.

(China Daily August 19, 2002)