SecProbe.io

July 30, 2010

Mr. Li Feilie Chief Executive Officer China Natural Resources, Inc. Room 2205, 22/F, West Tower, Shun Tak Centre
168-200 Connaught Road Central
Sheung Wan, Hong Kong
Re: China Natural Resources, Inc.  Form 20-F
Filed May 26, 2010 File No. 000-26046
 Dear Mr. Li Feilie:
 We have reviewed your filing and have the following comments.  In some of our
comments, we may ask you to provide us with  information so we may better understand your
disclosure.
 Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advi sing us when you will provide the requested
response.  If you do not believe our comments apply to your fact s and circumstances or do not
believe an amendment is appropriate, pl ease tell us why in your response.
 After reviewing any amendment to your filing and the information you provide in
response to these comments, we ma y have additional comments.
            Form 20-F for the Fiscal Year Ended December 31, 2009

 General

 1. Please provide the disclosure required by Item 16G (Corporat e Governance) of Form 20-
F.
 Risk Factors, page 3

 2. We note that the report from your auditors st ates that you have si gnificant transactions
and relationships with affiliated companies, a nd that because of these relationships, it is
possible that the terms of these transactions  may not be the same as those that would
result from transactions among unrelated pa rties.  Please add related risk factor
disclosure.  See Item 3.D of Form 20-F.  In addition, please clar ify whether your audit
committee or your independent directors appr ove your related part y transactions.

Mr. Li Feilie
 China Natural Resources
 July 30, 2010
Page 2

Wuhu Feishang depends on a single custom er for its zinc production…, page 6
 3. We note your disclosure that the loss of your single cust omer for your zinc production
would materially and adversely affect your results of operations, and we note your reference to a sales contract with such cust omer.  Please tell us why you have not filed
such contract as an exhibit to your filing.  S ee the Form 20-F Instruc tions as to Exhibits.

Item 4.  Information and Development of the Company, page 11

4. We note that you have described the in formation on your company and discussed
operating and financial review and prospect s information based on your legal entity
structure.  Please tell us your consideration of providing this info rmation based on your
reportable segments as disclose d in the notes to your financ ial statements.  We refer you
to Items 4.B and 5 of Form 20-F.
 Business Overview, page 13

5. Please clarify in this section the bus iness of Yangpu Lianzhong Mining Co., Ltd.

6. Please discuss your sales to related parties in  the context of your disclosure regarding
your products at page 16 and your disclosure  regarding your customers at page 19.  In
addition, please disclose how sa les prices are determined with  respect to th e sale of your
products to related parties.
 Organizational Structure, page 36

7. Please revise your chart at page  36 to reflect the abbreviate d terms that you use for your
references to your subsidiaries and affilia tes, as described on pages (i)-(iii).
 Operating and Financial Revi ew and Prospects, page 38

 Operating Results, page 39

 8. We note your disclosure at page  16 regarding your sales of copper concentrate.  Please
tell us why you do not discuss such sales in connection with your  operating results.
 9. Please clarify, if true, that the sales of bliste r copper discussed at page 40 were made to
related parties.
 Selling, General and Administrative Expense, page 41

 10. In each of your year-over-yea r comparative explanations, you state the change in SG&A
was partially due to an increase or decrease in depletion of mining rights. Please tell us
why you included depletion of mining rights in SG&A, and not as a component of cost of

Mr. Li Feilie
 China Natural Resources
 July 30, 2010
Page 3

sales in determining your gross profit meas ures presented in your statements of
operations.  Refer to SAB Topic 11:B, wh ich states, “depreciation, depletion and
amortization should not be positioned in the income statement in a manner which results
in reporting a figure for income before depr eciation."  If you have improperly excluded
depletion from cost of sales, please explain to us how you plan  on correcting th is error.

Discontinued Operations, page 42
 11. Your disclosure on page 42 states that the decr ease in other income (expense) for the nine
months ended September 29, 2009, was “partially offset by the written back of inventory
provision amounting to RMB 16.30 million (U S$2.39 million).”  Please explain how
your accounting related to marking up the i nventory value is consistent with the
interpretive response in SAB Topic 5:BB.
 Trend Information, page 45

 12. We note your disclosure that prior to the commencement of commercial operations at
Guizhou Yongfu Mining Co. Limited or Guiz hou Dayun Mining Co. Ltd., it is believed
that the iron and zinc business of Wuhu Feishang Mining Development Co. Ltd. would
“remain” as the primary contri butor to your turnover.  Howeve r, it appears that sales of
blister copper by Yangpu Lianzhong Mining Co.,  Ltd. have also comprised a significant
portion of your sales.  Please advise.
13. Similarly, please tell us whether your sale  of Mark Faith Technology Development
Limited will have a material effect on your gross profit related to your future sales of
blister copper, and on your consolidated revenue , income or profits.  In that regard, we
note that Bayannaoer City Feishang Copper C o. Ltd., a subsidiary of Mark Faith, was
engaged in the smelting and refining of copper.
 Directors, Senior Management and Employees, page 49

 Compensation, page 50

 14. With a view toward disclosure, please clarify why your chief executive officer, your executive vice president and your chief fina ncial officer earned no compensation from
you during your fiscal year ended December 31, 2009.
 Board Practices, page 52

 Nominating and Corporate Governance Committee;  Member Nominees for Director, page 53

 15. We note your disclosure regarding procedur es for “members” to propose candidates for
director.  Please clarify, if true, that these procedures appl y to proposals by your
shareholders.

Mr. Li Feilie
 China Natural Resources
 July 30, 2010
Page 4

Related Party Transactions, page 57
 16. Please disclose in this section the loan gua rantee provided by a company controlled by
your chief executive officer.  See Item 7.B of  Form 20-F.  In this regard, we note a
reference to such guarantee at page 43.
 Financial Statements

 Note 2 – Summary of Significant Accounting Policies

 (f) Property and Equipment, page F-16

 17. Please revise your disclosure in future filings to disclose your accounting policy for exploration and development costs incurred.  Your disclosure shoul d clearly explain how
you determine whether such costs are expensed or capitalized.
 Note 6 – Property and Equipment, page F-26

 18. Please revise your disclosure in future filin gs to describe the nature of the amounts
capitalized as construction in progress.  Please explain the specific projects that are
currently in construction, when you anticipat e that construction will be completed, and
the amount capitalized for each project.
 Note 11 – Income Taxes, page F-30

 19. Please explain why you do not have a deferred tax liability recorded for your property
and equipment.  In addition, explain the natu re of the permanent differences that are
reflected in your income ta x expense reconciliation.
 Note 12 – Related Party Balances  and Transactions, page F-33

 20. We note that you have recorded RMB68,740 of accounts receivable due from Wuhu
Hengchang, a related party controlled by Mr. Li. Feilie, as of December 31, 2009.  We
further note that the amount of receivables due from this related pa rty exceeds the amount
of related party revenue that you have recogni zed in fiscal year 2009.  Please explain how
you determined that collect ability is reasonably assu red, and hence how you have
determined that you have met the revenue recognition requirements of SAB No. 104.  As
part of your response, explain when you antic ipate that you will receive payment for your
related party accounts receivable.
 Note 16 – Segment Information, page F-39

 21. We note that several of the consolidated  segment total amounts do not agree to your
consolidated statements of operations for the years ended December 31, 2009 and 2008.

Mr. Li Feilie
 China Natural Resources
 July 30, 2010
Page 5

For example, total net sales, income (loss) from operations, and income tax expense reported in your segment footnote do not ag ree to your consolidated statements of
operations.  Please revise your disclosure to  provide the reconcilations required by FASB
ASC Topic 280-10-50-30 and 31.  In addition, tell us the nature and amount of each
significant reconciling item and how you have determined that your reporting complies
with FASB ASC Topic 280.
 22. Please tell us what consideration you gave to providing the amounts of investment in
equity method investees and tota l expenditures for additions to long-lived assets, for each
of your operating segments.  Refer to FASB ASC Topic 280-10-50-25, for additional
guidance.
 Exhibits

 23. It appears that any contracts related to your sales to relate d parties would be considered
material contracts.  Please file any such cont racts as exhibits to your filing.  See the Form
20-F Instructions as to Exhibits.
 Exhibits 12.1 and 12.2

24. We note each of your officers’ ce rtifications replaced the word “period” with “year,” in
several instances and, in Item 4(d), stated they had disclosed any change in internal
control, “that occurred during the Registrant’s  fourth fiscal quarte r,” rather than, “that
occurred during the period covered by th e annual report."  Please revise your
certifications in future filings to correspond ex actly with the form of certification set forth
in Instruction 12 to the E xhibits to Form 20-F.

Engineering Comments

Risks Relating to PRC Operations and Fo reign Private Issuer Status, page 9

25. We note your statement regarding the PRC govern ment’s concern for safety in the coal
mining industry.  In an appropriate section of  your filing, please include a discussion of
your safety performance refere ncing your safety programs a nd statistical measures your
organization utilizes to monitor performance,  such as occupational fatality and injury
frequency rates.  Please expa nd your discussion related to sa fety and health to include
these occupational injury and frequency statistics, comparisons to comparable national statistics, and your performance as demonstrated by these rates.
 Yang Chong Mine, page 18

 26. Please insert a small-scale map showing the location and access to each of your material
properties, as required by Instruction 1(a) to Item 4.D of Form 20-F.  Please note the
EDGAR program now accepts Adobe PDF files and digital maps, so please include these

Mr. Li Feilie
 China Natural Resources
 July 30, 2010
Page 6

maps in any amendments that are uploaded to  EDGAR.  It is relatively easy to include
automatic links at the appropriate locations within the document to GIF or JPEG files,
which will allow figures and diagrams to appear in the right location when the document is viewed on the Internet.  For more info rmation, please consult the EDGAR manual, and
if additional assistance is required, please call Filer Support at (202) 551-3600 for Post-
Acceptance Filing Issues or (202) 551-8900 for Pre-Acceptance Filing Issues.  We believe the guidance in Instruction 1(a) to It em 4.D of Form 20-F would generally require
maps and drawings to comply  with the following features:

• A legend or explanation showing, by means of  pattern or symbol, every pattern or
symbol used on the map or drawing.

• A graphical bar scale should be included.  A dditional representations of scale such as
"one inch equals one mile" may be utilized provided the original scale of the map has not been altered.

• A north arrow.

• An index map showing where the property is situated in relations hip to the state or
province, etc., in which it was located.

• A title of the map or drawing, and the date on which it was drawn.

• In the event interpretive data is submitted in conjunction wi th any map, the identity of
the geologist or engineer that prepared such data.

Any drawing should be simple enough or of suff iciently large scale to clearly show all
features on the drawing.
 27. Please disclose the information required under paragraph (b) of Industry Guide 7 for all
your material properties listed under this head ing.  For any properties  identified that are
not material, please include a statement to that  effect, clarifying your intentions.  For each
material property, include the following information:

• The location and means of access to your  property, including the modes of
transportation utilized to and from the property.

• Any conditions that must be met in order to  obtain or retain title to the property,
whether your have surface and/or mineral rights.

• A brief description of the rock formations  and mineralization of  existing or potential
economic significance on the property.

• A description of any work completed on the property and its  present condition.

Mr. Li Feilie
 China Natural Resources
 July 30, 2010
Page 7

• The details as to modernization and physic al condition of the plant and equipment,
including subsurface improvements and equipment.

• A description of equipment, infr astructure, and other facilities.

• The current state of expl oration of the property.

• The total costs incurred to date and all planned future costs.

• The source of power and water that can be utilized at the property.

• If applicable, provide a clear statement th at the property is without known reserves
and the proposed program is exploratory in nature.

You may refer to Industry Guide 7, paragraphs  (b) (1) through (5), for specific guidance
pertaining to the foregoin g, available on our website at the following address:
www.sec.gov/about/forms/industryguides.pdf

28. Please disclose the following information for each of your properties:

• The nature your ownership or  interest in the property.

• A description of all interest s in your properties, includi ng the terms of all underlying
agreements and royalties.

• Describe the process by which mineral right s are acquired at this location and the
basis and duration of your mineral rights, surface rights, mining claims or concessions.

• An indication of the type of claim or conce ssion such as placer or  lode, exploration or
exploitation, whether the mini ng claims are State or Fede ral mining claims, patented
or unpatented claims, mining leas es, or mining concessions.

• Please include certain identif ying information, such as the property names, claim
numbers, grant numbers, mining concession name or number, and dates of recording and expiration that is sufficient to enable the claims to be distinguished from other
claims that may exist in th e area or your properties.

• The conditions that must be met to retain your claims or leases, including
quantification and timing of all necessary  payments, annual maintenance fees, and
disclose who is responsible for paying these fees.

• The area of your claims, either  in hectares or in acres.

Mr. Li Feilie
 China Natural Resources
 July 30, 2010
Page 8

 29. Please refine your estimate of your proba ble reserves at the Yang Chong mine by
including the quantity (Tonnage ) and a grade (Quality).
 30. Please include a table of your annual mine pr oduction and concentrate sales for the last
five years.  Please display the tonnage and grade of both your mine production and concentrate sales in this table.
 Busines