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Response Letter

CHINA NATURAL RESOURCES, INC.

Room 2205, 22/F, West Tower, Shun Tak Centre

168-200 Connaught Road Central

Sheung Wan, Hong Kong

January 25, 2013

CORRESP

VIA EDGAR

United States Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C.  20549

Attn:

Tia Jenkins, Senior Assistant Chief Accountant

James Giugliano, Staff Accountant

Brian Bhandari, Staff Accountant

John Coleman, Mining Engineer

Re:

China Natural Resources, Inc.

Form 20-F for the Year Ended December 31, 2011

Staff Letter of Comment dated December 21, 2012

SEC File No. 0-26046

Ladies and Gentlemen:

We are writing to respond to the Staff’s letter dated December 21, 2012, relating to our Annual Report on Form 20-F for the year ended December 31, 2011 (the “Annual Report”).

We respond to the Staff’s comments as follows:

Staff Letter dated December 21, 2012

Form 20-F for the Fiscal Year Ended December 31, 2011

General

1.

It appears that some of your operations as described on your company website are not disclosed in your Form 20-F. Please explain this apparent inconsistency.

 1 / 11

Response to Staff Comment 1:

We have reviewed the information on our website and determined that certain of the disclosure related to discontinued or disposed of operations. We have now removed the out-of-date information from our website.

Business Overview, page 19

Coal Mining Operations page 31

2.

Please provide a summary of your production and sale tonnages for each of your coal mines pursuant to the Instructions to Item 4.D of Form 20-F.

Response to Staff Comment 2:

The following summarizes our production and sales tonnages for each of our coal mines. We propose to include a substantially similar summary of production and sale tonnages in future filings, starting with the Annual Report on Form 20-F for the fiscal year ended December 31, 2012.

We propose to add the following information in the last paragraph under the caption “Business of Guizhou Yongfu (Yongsheng Mine)”:

As Yongsheng Mine is a newly constructed anthracite mine which commenced construction in 2009, no summary of production and sale tonnages has been provided.

We propose to add the following information in the last paragraph under the caption “Business of Guizhou Dayun (Dayun Mine)”:

As Dayun Mine is a newly constructed anthracite mine which commenced construction in late 2011, no summary of production and sale tonnages has been provided.

We propose to include the following information in the last paragraph under the caption “Business of Baiping Mining (Baiping Mine)”:

The following table summarizes the production quantity and sales quantity of our anthracite products for the period ended from March 18, 2010 (date of acquisition) to December 31, 2010, the year ended December 31, 2011 and the year ended December 31, 2012.

 2010

 2011

 2012

Production quantity (in tonnes):

Anthracite

 65,046

 159,185

 [●]

Sales quantity (in tonnes):

Anthracite

 71,158

 152,564

 [●]

 2 / 11

We propose to include the following information in the last paragraph under the caption “Business of Dayuan Coal (Dayuan Mine)”:

The following table summarizes the production quantity and sales quantity of our anthracite products for the period ended from March 18, 2010 (date of acquisition) to December 31, 2010, the year ended December 31, 2011 and the year ended December 31, 2012. As Dayuan Mine underwent an upgrading mine development project in 2011, no summary of production and sale tonnages is provided for 2011.

 2010

 2011

 2012

Production quantity (in tonnes):

Anthracite

 9,555

 -

 [●]

Sales quantity (in tonnes):

Anthracite

 10,847

 -

 [●]

We propose to include the following information in the last paragraph under the caption “Business of Gouchang Coal (Gouchang Mine)”:

The following table summarizes the production quantity and sales quantity of our anthracite products for the period ended from March 18, 2010 (date of acquisition) to December 31, 2010, the year ended December 31, 2011 and the year ended December 31, 2012. As Gouchang Mine had not completed its upgrading mine development project until March 2011, no summary of production and sale tonnages is provided for 2010.

 2010

 2011

 2012

Production quantity (in tonnes):

Anthracite

 -

 96,068

 [●]

Sales quantity (in tonnes):

Anthracite

 -

 89,245

 [●]

We propose to include the following information in the last paragraph under the caption “Business of Linjiaao Coal (Zhulinzhai Mine)”:

As Zhulinzhai Mine was undergoing an upgrading mine development project for the period from June 2009 to October 2011, no summary of production and sale tonnages is provided.

 3 / 11

We propose to include the following information in the last paragraph under the caption “Business of Xinsong Coal (Liujiaba Mine)”:

The following table summarizes the production quantity and sales quantity of our anthracite products for the period ended from March 18, 2010 (date of acquisition) to December 31, 2010, the year ended December 31, 2011 and the year ended December 31, 2012. As Liujiaba Mine underwent an upgrading mine development project in 2011, there was no production in 2011; however a summary of sale tonnages of anthracite in 2011 from the production in the previous year is provided.

 2010

 2011

 2012

Production quantity (in tonnes):

Anthracite

 84,473

 -

 [●]

Sales quantity (in tonnes):

Anthracite

 84,357

 1,438

 [●]

3.

Please forward to our engineer, as supplemental information and not as part of your filing, the September 2011 Behre Dolbear technical reports referenced in regards to your coal reserves, pursuant to paragraph (c) of Industry Guide 7. Please provide this information on a CD, formatted as Adobe PDF files. Please also provide the name and phone number for a technical person whom our engineer may call if he has technical questions about your reserves. You may ask to have this information returned by making a written request at the time it is furnished, as provided in Rule 12b-4 of Regulation 12B. If you have questions concerning the above request, please contact John Coleman, Mining Engineer at (202) 551-3610.

Response to Staff Comment 3:

In response to the Staff’s comments, the Company has provided to John Coleman, Mining Engineer, the September 2011 Behre Dolbear technical reports requested by the Staff in its letter of comment (the “Supplemental Information”). The Supplemental Information has been submitted in CD format as Adobe PDF files, to the address referenced by the Staff. The submission includes (a) the name and phone number for a technical person that the SEC engineer may call; (b) a written request for return of the Supplemental Information pursuant to Rule 12b-4 of Regulation 12B; and (c) a pre-paid, pre-addressed shipping envelope to facilitate return of the Supplemental Information.

 4 / 11

Operating and Financial Review and Prospects, page 48

4.

In order to provide an investor with a better understanding, in future filings, please expand your disclosure here or in the footnotes to your financial statements to address the nature of the assets included in construction-in-progress at each balance sheet date, as well as the costs accumulated in this category in each fiscal year. Please provide us with draft disclosure of your planned changes.

Response to Staff Comment 4:

In response to the Staff’s comment, the Company proposes to expand the disclosure, in future filings, to address the nature of the assets included in construction-in-progress at each balance sheet date, and the costs accumulated in each category in each fiscal year.

The Company respectfully advises the Staff that it proposes to add the following disclosure to Footnote 4 “Property, Plant and Equipment” of the Company’s financial statements starting with the Company’s financial statements for the year ended December 31, 2012.

F-pages – Note under Property, Plant and Equipment

Construction in progress consists of

 December 31,

 2011

 2012

 CNY

 CNY

 US$

Mine construction

 239,096

 [●]

 [●]

Civil construction

 65,145

 [●]

 [●]

Machinery and equipment

 39,878

 [●]

 [●]

Capitalized staff cost and design expenditures

 27,056

 [●]

 [●]

Borrowing cost capitalization

 34,540

 [●]

 [●]

Other capitalizable costs

 32,816

 [●]

 [●]

 438,531

 [●]

 [●]

 5 / 11

Critical Accounting Policies, page 51

5.

We note you disclose certain liquidity and going concern considerations on page F-12. Given these considerations, as well as your recent operating losses, please expand your disclosure to address your critical accounting policy considerations concerning impairment of your long-lived assets, or tell us why no additional disclosure is necessary. Refer to SEC Release 33-8350, which can be found at: http://www.sec.gov/rules/interp/33-8350.htm. In your response, please clarify for us whether you considered your recent performance and liquidity concerns as an indication of impairment in the context of paragraph 9 of IAS 36. Also, tell us whether you performed an impairment test in 2011 or subsequently in 2012, and if so, tell us the results of that test as well as how you identified your cash generating units when performing your test.

Response to Staff Comment 5:

In response to the Staff’s comment, the Company proposes to include the following disclosure in our future filings, starting with the 2012 Form 20-F, to address our critical accounting policy considerations concerning impairment of our long-lived assets.

Impairment of non-financial assets

An impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs to sell and its value in use. The fair value less costs to sell calculation is based on available data from binding sales transactions in arm’s length transactions of similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a discounted cash flow model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Group is not yet committed to or significant future investments that will enhance the asset’s performance of the cash generating unit being tested. The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.

The Company further advises the Staff that the cash generating units are the individual mines owned by the Company and that the Company has also assessed any potential indicators of impairment at the cash generating unit level as at December 31, 2011. The Company concluded that there are no indicators of impairment for the following reasons:

·

The non-ferrous mine, the Yangchong Mine and coal mines that are in commercial production, namely the Baiping Mine and Gouchang Mine, are profitable.

 6 / 11

·

The coal mines, that are in development stage, namely the Yongsheng Mine, the Dayun Mine, the Dayuan Mine, the Zhulinzhai Mine and the Liujiaba Mine, to which the recent operating losses are attributed, to have been forecasted by the Company to be profitable once they have reached the commercial production stage due to the shortage of coal available in Guizhou Province where the coal mines are located.  Given previous experiences with the coal mines that are already in commercial production, the Company is confident that the all necessary permits for commercial production will be obtained for the mines that are in development.  Furthermore, the construction progress of these coal mines is consistent with the original planned timelines. A non-ferrous mine, the Sichong Mine, also contributed to the Company’s operating loss in 2011 inasmuch as the Sichong Mine was in the exploration stage in 2011. The exploration work of Sichong Mine was completed subsequent to 2011, and the next stage of prospecting work has commenced.  The Company forecasts the Sichong Mine to be profitable once it reaches the commercial stage.

·

In addition, the Company’s principal shareholder has confirmed its continuous financial support of the Company, thereby supporting the funding necessary for the construction of the coal mines being developed.  This was disclosed in the last paragraph of “Liquidity and Capital Resources” section on page 60 of the 2011 Form 20-F, as well as in footnote 2.1 “Basis of Preparation” on page F-12.

As a result, the Company did not perform an impairment test in 2011 or subsequently in 2012.

Issued but Not Yet Effective International Financial Reporting Standards, page 54

6.

Please provide us with the extent to which you expect the adoption of IFRIC Interpretation 20, “Stripping Costs in the Production Phase of a Surface Mine”, will impact your financial statements. Refer to SAB Topic 11.M.

Response to Staff Comment 6:

In response to the Staff’s comment, the Company respectfully advises the Staff that the IFRIC Interpretation 20 is not applicable to the Company, as all mines owned by the Company since establishment are underground mines, and the Company did not operate any surface mining operations and does not expect to engage in any surface mining activities in the future. As a result, the adoption of IFRIC Interpretation 20 is not expected to impact the financial statements of the Company in future filings.

 7 / 11

Controls and Procedures, page 81

7.

We note you disclose your management has concluded your “disclosure controls and procedures were effective to ensure that information required to be disclosed in your periodic reports filed under the Exchange Act is recorded, processed summarized and reported, within the time periods specified by the Securities and Exchange Commission.” The definition of disclosure controls and procedures in Rule 13a-15(e) of the Exchange Act also includes “controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the [Exchange] Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.” Please confirm in future filings you will expand your disclosure to include your determination of the effectiveness of disclosure controls and procedures, as fully defined.

Response to Staff Comment 7:

We confirm that we will expand our description of disclosure controls to include our determination of the effectiveness of disclosure controls and procedures, as fully defined, in future filings starting with the 2012 Form 20-F.

Notes to the Consolidated Financial Statements, page F-11

Note 2.3 – Summary of Significant Accounting Policies, page F-13

(e) Property, Plant and Equipment, page F-15

8.

Please confirm in future filings you will revise your disclosure to clarify how you account for mine development costs, pre-production stripping costs and production-stage stripping costs. Please provide us with draft disclosure of your planned revisions.

Response to Staff Comment 8:

In response to the Staff’s comment, the Company respectfully submits that the Company has not historically incurred, and does not expect to incur, any stripping costs, whether pre-production or production-stage.  This is in line with the Company’s response to Staff Comment 6 wherein it indicated that IFRIC Interpretation 20 would not be applicable to the Company.  However, in response to the Staff’s comments, the Company respectfully advises the Staff that it proposes to revise its disclosure to clarify the accounting for mine development costs in future filings.

The Company proposes to add the following disclosure to Footnote 2.3 “Summary of Signifi