Chapter 23

Due Diligence Guidelines –

Mineral Companies

11. Community Relations

11.1 Standard

11.1.1 Regarding the preparation of a listing document, a sponsor should perform, without limitation … assess the business performance, financial condition, development, prospects and any financial projection or profit forecast. [Paragraph 17.6(d)(vi) of the Code of Conduct]

11.1.2 If relevant and material to the Mineral Company’s business operations, the listing document must include information on its historical experience of dealing with concerns of local governments and communities on the sites of its mines, exploration properties, and relevant management arrangements and any claims that may exist over the land on which exploration or mining activity is being carried out, including any ancestral or native claims. [Listing Rules 18.05(6)(g), (h)]

11.2 Guidance and Recommended Steps

11.2.1 The sponsor should enquire of the management team whether there are any affected communities on the sites of its projects, and should discuss the impact of the exploration and/or extraction activity with senior management. Affected communities may include communities living on or around the areas covered by the exploration and/or extraction licences, native/aboriginal groups with ancestral/native claims as well as artisanal miners operating in those areas prior to the Mineral Company. During the site visit(s), the sponsor may also wish to observe the affected communities, although site visits would not necessarily be expected to reveal all affected communities.

11.2.2 Where the Mineral Company has constructed any infrastructure for the local region/community (including roads, rail, power etc. but also social infrastructure such as housing, healthcare and educational establishments), the circumstances surrounding this should be discussed with management and the costs compared against reasonable benchmarks.

11.2.3 With regard to ancestral or indigenous rights, the sponsor should make enquiries of management as to whether there are any known claims or assertions of such rights either in respect of the Mineral Company’s assets or in similar projects. Interviews with the communities affected would not be expected.

11.2.4 Enquiry should also be made of lawyers in relevant jurisdictions and management as to what risks any ancestral or indigenous claims (including artisanal mining rights claims) may have for the Mineral Company’s ability to exploit resources.

11.2.5 The sponsor should also carry out regular media searches in respect of the Mineral Company, the mineral assets and project name to ascertain if there are any reports or news articles which contradict or are inconsistent with information from management in respect of community relations and, if any, enquire further of the management team whether they were aware of such reports or news articles, the reasons for such contradiction or inconsistency and/or steps taken or being taken to address issues raised in such reports or news articles. In some cases, the sponsor may need to request third party investigations be taken.


HKCFEF Limited and the contributing law firms, accountants and sponsors are not offering these due diligence guidelines as legal, financial or professional advice or services and they should not be relied upon as such. These due diligence guidelines should not be used as a sole basis for any decision, action or inaction and are not meant to serve as a substitute for the advice of qualified professionals. See here for the full terms and conditions.

Listing Mineral Companies on Hong Kong Stock Exchange

Community Relations Mineral Company projects

Business Performance of Mineral Companies

Mineral Companies Community Relations

Mineral Company Listing Application Affected Communities

Mineral Company Ancestral or Indigenous Rights

Due Diligence Artisanal Mining Rights Claims

Mineral Company Community Infrastructure Construction

Community Relations on the sites of projects

Media Searches In Respect Of The Mineral Company, The Mineral Assets And Project Name

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