Mining foundation

The mining foundation (광업재단/鑛業財團) is a foundation which has been established so that the mining right holders may create mortgage under the Factory and Mining Foundations Act (공장 및 광업재단저당법/工場及鑛業財團抵當法).

The mining foundation, object of ownership and mortgage, means a mining right and one set of corporate properties based on the said right, and composed of all kinds of machinery and equipment used to exploit and acquire mineral resources and other accessories Article 2 iii.

Key words
mining foundation, mineral resources, mortgage, factory foundation, registration

Concept of Foundation
So to speak, the concept of foundation has been devised to maintain the principle of one-thing-to-one-right in rem (일물일권주의/一物一權主義) so as to facilitate the mining right holder to borrow as much money as possible and to develop mineral resources.

The mining foundation is composed by the following assets, a part or whole of which belong to the same mining right holder, in addition to the mining right: Article 53.
 * 1) Land, buildings and other structures;
 * 2) Machinery, equipment and other accessories;
 * 3) Aircrafts, ships, automobiles and other registered or registrable movables;
 * 4) Superficies and other land use right;
 * 5) Lease with the consent of lessor; and
 * 6) Intellectual property rights, etc.

Registration required
As mentioned above, the concept of foundation has been established by law. So the existence of such foundation shall be proved by a special registry. Any real estate belonging to the mining foundation has to be registered as one of belongings to the said mining foundation.

The registered foundation is regarded as one single real property. The creation of mortgage and other change of right relating to the foundation cannot be effective without an appropriate registration in the mining foundation registry. Articles 54, 11 and 12.

In addition, for the purpose of disclosure to a third party, any right or individual property can be acknowledged as belongings of the foundation by means of the proper registration. Actually the provisions regarding the factory foundation apply mutatis mutandis to the mining foundation with a few exceptions like the cancellation of mining right or the establishment of a new company, etc. Article 54.

Object of Mortgage
To secure collateral for a loan(s), the creditor(s) may cause mortgage (광업재단저당권/鑛業財團抵當權) to be created on the mining foundation.