Compensation of Policy-Related Withdrawing of Mining Rights in China: Based on Term Structure Model
Supervisor:zhou jin sheng
In order to thoroughly implement the concept of ecological civilization construction,Chinese government has issued a series of policies requiring the retreat of mining rights involving nature reserves and backward production capacity.The determination of the mining rights exit compensation mechanism has become the focus of the system authorities and mining enterprises.Considering that the main mineral products have mature futures products in and out of China,this dissertation uses the futures price structure data of the futures prices of the Shanghai Futures Exchange and the London Metal Exchange to conduct an evaluation of the compensation of mining rights.By introducing a term structure model and considering a long-term factor,the way to calculate sales price by historical mean values in previous evaluation methods is changed.Based on the term structure model,this dissertation explains compensation schemes for different mining rights exit categories,does research on upper and lower limits of compensation amount,compares different compensation models,and proposes indirect compensation plans for solving the problem of compensation of mining rights withdrawals.The main research work and innovative achievements are as follows:(1)Identifying models and implementations that are applicable to assessing the exit of compensation for policy mining rights withdrawal.Based on the term structure model,the existing discounted cash flow method(DCF method)is improved and named mDCF method,and the mining rights withdrawal compensation model is constructed.Since the settlement price of the futures contract reflects the expected spot price at the expiration of the futures contract,the term structure model can be used to calculate the term structure curve of futures price to obtain the expected spot price at any future point in time.This dissertation uses the yield of long-term spot price as a long-term factor of the three-factor term structure model,using the futures price of mineral products to estimate the sales price of future mineral products.Compared with the traditional DCF method using the historical average price of mineral products as the future sales price,it is more practical to use the term structure model of the futures price to evaluate the future sales price,which can introduce the market trader’s evaluation process for the expected price of future mineral products.This method is applied to the mining rights compensation evaluation process in the classification of seven types of mining rights withdrawal compensation.In addition,the above three-factor model is introduced into the real option method to correct the parameters.Under the premise of considering the mining right as the European buyer’s commodity swap option,it can play the role of calculating the negotiation upper limit of the mining rights withdrawal compensation.Since this dissertation uses the futures price term structure to study,the model used in this dissertation is only applicable to solve the compensation problem of mining rights withdrawals with minerals which has its futures contracts.(2)Constructing a compensation range negotiation model of mining rights withdrawals and conducting an empirical research.The assumptions of the mDCF method differ from the actual situation,and the evaluation result is just one numerical value,leaving no room for adjustment.In order to facilitate the mining rights holders and government departments to reach a more acceptable amount of compensation,this dissertation explores the method of establishing the compensation range for negotiation.In this dissertation,the upper and lower limits of the compensation range are constructed by the real option method and the hedging ratio.The compensation range of the mining right of a copper mine is evaluated by this method.(3)Doing research on indirect compensation plan,and propose a policy-based mining rights withdrawal compensation deduction tax and fee model based on national pooling,intra-provincial transfer payments,and inter-provincial balance settlement.Since the direct compensation by cash given to the mining rights holders will bring greater financing pressure to the local government,the paper studies the mining rights withdrawal from the indirect compensation program,that is,the compensation plan for the mining rights holders is not directly compensated by cash.The indirect compensation plan that has been practiced abroad is mainly the replacement compensation of mining rights.The plan requires to replace the mining rights of the mining right holders in the protected area with the mining rights outside the area based on the results of the mining rights assessments.The relevant departments of Shuangyashan City and Hunan Province also have relevant exploration.The paper also constructs the mining rights withdrawal compensation deductible tax and fee model and expounds its advantages and disadvantages.According to the calculation,under the premise of national pooling,provincial transfer payment,and inter-provincial balance settlement,this method can indeed reduce local governments’ funding pressure.Based on the relevant laws and regulations,local government documents and the existing problems of mining rights withdrawal compensation,the paper evaluates the mining rights,general exploration rights and exploration rights based on the mDCF method,and evaluates the reconnaissance rights and general prospecting rights based on the geological factor evaluation method.The dissertation explains the implementation plans that is compatible with the withdrawal of the seven types of mining rights,and studies the model of the negotiation range model of mining rights withdrawal compensation and the indirect compensation plan to promote the smooth policy withdrawal of mining rights and provides theoretical basis and guiding recommendations for practical work of compensation.