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These regulations specified the forms and conditions under which the licences and leases were issued and conditions of mining. In particular they specified the following:
(i) Prospecting licence-fee $500--period 6 months.
(ii) Mining licence fee $250 per square mile period 12 months.
(iii) Mining leases-rent $2 per acre, plus $50 per acre surface rent of
occupied area-royalty not exceeding 5%-period 75 years.
13. These very necessary mining regulations, which not only acquaint the would-be prospector and miner of the conditions under which he may operate but also specified definite forms of title to be issued and procedure to be followed, were however rescinded by Gazette Notification No. 622 dated 14th August, 1934, subject to a note that "the terms of any grant of a mining lease or a prospecting or mining licence will hereafter be determined according to the circumstances of the case. There is therefore a complete lack of control of mining operations as regards rules and penalties, which has resulted in a considerable amount of discussion as to the form of lease and licence that should be issued.
14. The reason for rescinding these regulations is not clear, but it would appear that during 1934 the price of wolfram rose, and it was considered that greater revenue could be obtained by increasing the fee of a mining licence from $250 to $2,500 per square mile than what could be obtained on a 5% royalty basis. I cannot trace the monetary result of this theory, which is entirely wrong in principle, quite apart from the fact that it hinders normal prospecting and development of possible mineral deposits.
15. GOVERNMENT MINING POLICY.
Owing to the absence of a detailed geological report, the mining potentialities of the Colony are unknown. There are however definite indications of mineral deposits in the New Territories and neighbouring islands which may prove of economic value if prospected and mined by up to date methods backed with adequate capital, and the prospecting and development of these should be encouraged as far as possible with a view to ultimate increased revenue to Government from royalties. With this view, mining laws and regulations and the issue of titles at low fees are necessary in place of those previously in force. Present mining conditions do not warrant the formation of a mines department, and regulations should be in a simple form so that operations can be controlled and supervised by officers now in Government departments. The appointment however of a capable Chinese mines overseer for routine inspection, to be attached to the local land office, is strongly recommended, and it is advisable that he be sent to the Federated Malay States for a short training course of 3 months under the Mines Department there.
16. SUGGESTED MINING LAWS.
The following amendments and additions to Ordinance No. 7 of 1906 are recom- mended with a view to bringing it more in line with modern practice and local condi- tions.
Section 2.
(i) Insert the word "samples" in place of the word "specimens".
(ii) Period of 6 months be altered to 12 months.
Note. In actual practice the period should be proportionate to the area under
licence.
Section 3.
Delete as being difficult of control and unnecessary at present.
Note. Any existing applicants for mining licences should be informed that Government is only prepared to consider applications for either prospecting licences or mining leases.