en_矿业资讯

Behind the Sudden Participation of the Top Three Mines in CBMX
Source: Innovative Finance Observation Date: April 2, 2012

At 8:00p.m. of March 29, China Beijing International Mining Exchange (hereinafter referred to as CBMX) signed a memorandum with Brazil-based CVRD in Singapore; less than 24 hours later, at 11:49a.m. of March 30, CBMX signed an agreement with Rio Tinto PLC (hereinafter referred to as Rio Tinto) in Singapore, meaning the latter to become a sponsor member of China Iron Ore Spot Trading Platform (the Platform). In the ten days since March 20, three foreign mines joined or showed an interest in the Platform, from which many people have felt the strength of CBMX. As a saying goes, there is no free lunch in the world. Foreign mines have their own intents when they join or show interest in the Platform. It makes less difference to foreign mines, which have got huge profits, to join the Platform or to join globalOre launched by BHP Billiton. Nonetheless, both platforms can help them realize the dream of promoting spot trade of iron ores and thus maximizing their profits. (By Liu Chang, a reporter with Innovative Finance Observation) To CVRD, One Stone at Two Birds Compared with FMG and Rio Tinto, which have become members of CBMX, CVRD only signed a memorandum of understanding with CBMX. According to relevant information, a memorandum of understanding, regarded as an agreement by some Chinese, refers to "a document recording the common understanding reached between two parties through discussions and negotiations." In a memorandum of understanding, except for clauses on confidentiality, termination, application of law, expense allocation, exclusive negotiations, dispute settlement, other clauses are not legally binding to both parties. Both parties of a memorandum of understanding are not legally obliged to such a memorandum until it is converted to an official treaty. Liang Ruodong, vice president of CBMX told the reporter with Innovative Finance Observation, FMG signed an agreement directly to become a sponsor member of CMBX without a prior memorandum of understanding. Thus, we can understand that CVRD keeps a way for its retreat as it just said, "Give support to China Iron Ore Spot Trading Platform and wishes the Platform could operate smoothly and healthily". However, it has not yet confirmed that it will join the Platform Such a choice is not a surprise to Zhang Jiabin, a senior analyst at the Ore department of Umetal. He thinks that the major reason is that it has to negotiate with relevant Chinese authorities for the latter’s permission for its vessels as big as 400 thousand tonnages berthing at Chinese ports. At this critical moment, its participation in the platform of CMBX as the first one to do so among the top three mines has been aimed to provide important weight and prerequisite for the negotiation. Previously, to ship more raw materials to meet the needs from the economic growth in China and reduce the costs of transoceanic shipment of iron ores so as to lower ocean freights and alleviate the volatility in the prices of iron ores, CVRD built a number of new, larger and more efficient vessels, only to find that they have been hampered by the new regulations promulgated by the Ministry of Transport of the PRC. When this large fleet can be allowed to berth at Chinese port is still unknown. On this February 1, CVRD also posted a statement on its official site that the 400-thousand-tonnage iron ore carriers owned or rented by it will berth at Chinese terminals only when they completely meet the requirements of Chinese regulations. Recently, it has been reported in the industry that the berthing of 400-thousand-tonnage ore carriers of CVRD will be settled in May. But, Jia Dashan, deputy director at China Waterborne Transport Research Institute of the Ministry of Transport publicly told the media that no any relevant information was heard, "the formulation of the safety design standard on vessels with a tonnage of more than 400 thousand tons are not started yet and as a result everything is unsure before the publication of this standard." The conclusion of a memorandum of understanding is a sign of waiting and seeing to some extent. According to the analysis of Zhang Jiabin, the Chinese government has not yet agreed to the berthing of large vessels of CVRD at Chinese ports, or in other words, it has not taken some active steps, for example, to make compromise to permit a vessel carrying 300 thousand tons of cargos, albeit with an tonnage of 400 thousand tons, to berth at Chinese ports. In such a circumstance, CVRD supported the platform of CBMX in the first place among the top three mines, which implied that it has shown its goodwill to the Chinese government and next was the attitude of the latter on the berthing of its large vessels. By sea, the distance between Brazil and China is 2-3 times as much as that between Australia and China. As a result, high sea freights have been always a disadvantage of CVRD in its competition with Rio Tinto and BHP Billiton. Thus, it is nothing but a consideration of CVRD for its own interest to pay attention to the attitude of China on the berthing of it large vessels. "Now, CVRD has shown its goodwill to China. But if it chose to be a member of CBMX, once the Chinese side does not allow the berthing of its large vessels, it would have no weight to bargain with the Chinese government. In view of this, what it chose was to sign a memorandum of understanding."Zhang Jiabin told the reporter with Innovative Finance Observation. On the other side, the timing that it chose to show its goodwill following FMG’s participation in the Platform indicated that it took account of the interest of the top three mines as a whole. Zhang Jiabin thinks, although they are competing with each other, they as a whole also coordinate with each other, thus, "The top three mines have well understanding of  their collective interests." When the platform of CBMX was just formed, what it considered most was the likely lack of support from overseas mines. The top three mines were indifferent to the platform at first, maybe because none of them wanted to be a precedent among foreign mimes. At this moment, FMG, an emerging mine also from Australia, became the first overseas member in the Platform. Zhang Jiabin thinks the action of FMG broke the ice. He points out, due to the coordination with Rio Tinto and BHP Billiton, CVRD had not been willing to break the ice, while the participation of FMG gave it an excuse and implied to Rio Tinto and BHP Billiton that the balance was in favor of CBMX. Therefore, both of them would be more easily to accept the goodwill showed by CVRD to the platform and furthermore, what it signed was just a memorandum of understanding. In such a way, CVRD has suggested to the Chinese government that it be the first one of the top three mines to support the platform so that it has won some weight in the negotiation on the berthing of its large vessels on one hand; on the other hand, it also took account of the sentiments of Rio Tinto and BHP Billiton. Therefore, it is a wise action. BHP Billiton will overturn Platts Index? Until the time when the reporter delivered the news, of the top three mines, only BHP Billiton has not yet taken any substantial step toward joining the platform of CBMX. But it is widely believed in the industry that its participation is around the corner. If it does so in future, its relations with the platform and globalOre will become much subtle. Some people in the industry has long regarded the relationship between globalOre and the platform of CBMX as being competitive because "the ultimate goal of both platforms is to launch their own price indices separately." The globalOre platform was initiated by BHP Billiton, but most iron ore trade is priced on the basis of Platts Index. This means that whether BHP Billiton will join either of these platforms, Platters Index will inevitably get a hit. In particular, as a shareholder of globalOre, BHP Billiton is likely to damp its own interest, if it joins the platform of CBMX. In this respect, Zhang Jiabin prefers to believe that the participation of BHP Billiton in either platform is not to overturn Platts Index altogether but rather to upgrade it, "this is likely to be a strategy of BHP Billiton". An important reason why Platts Index can stand out from a lot of indices to become the pricing benchmark has been the support of the top three mines. But as it is calculated on the basis of price inquiries, it is less transparent to some extent. "In recent years, many companies, especially buyers have shown dissatisfaction over Platts Index." said Zhang Jiabin. In his view, BHP Billiton has well understood the dissatisfaction of most Chinese traders and steel companies and it is due to such dissatisfaction that CISA and many websites in China have launched a range of price indices to counter against Platts Index.  "As a result, Platts Index cannot be used in the long run, but BHP Billiton is locating a new price index, which is acceptable to the Chinese side, to continue its control over the entire market." He pointed out that Platts Index must be impacted, whether BHP Billiton is to use the index of globalOre or that of CBMX in its trade. But the spread between these two price indices must be small. "Just like other indices on the international market that have a spread of 1-2 dollars only with Platts Index, which has little impact on mines which have huge profits. However, a new index as such is likely to be accepted by Chinese steel companies and traders. "At the beginning, China did not accept index-based prices, but later they accepted. Then they accepted prices determined case by case rather than Platts Index. If now a new index different from Platts Index is launched, they may think it is fair and are willing to do trade on the basis of it." Zhang Jiabin thinks, "Apparently, to launch another index is irrational while there is already one in place, but in fact what BHP Billiton is going to do is just to launch an upgraded one to relieve the dissatisfaction of Chinese companies over Platts Index for now and the new one is nothing but a mask." Even though both price indices were published, which to be used would be still dependent on buyers and sellers. As just a service agency, what CBMX can do is to calculate an index on the basis of the data of day-to-day trade, but it is just an option available to mines, steel companies and traders.
 
Another analyst who did not want to disclose her name gave an example: "If a mine proposes to settle the trade with Platts Index, but the steel plant thinks the price will be lower if the index of CBMX is used. Then, the both parties must negotiate about it in the end and they may reach a compromise to use the weighted average of these two indices. It is a possibility." She thought, "If the index of CBMX is relatively lower and all trade is done on the basis of this index, mines will not lose a lot. However, in the long run, the Chinese side will not necessarily benefit much from it." Spot trade is the real intent of mines On March 20, FMG became the first overseas mine to become a member of the platform of CBMX. This emerging mine, planning to expand its output to 155 million tons in 2013, is eager to develop a large number of additional Chinese clients and it is not of the same magnitude as the top three mines. As a result its participation was just from its own consideration irrespective the feelings of the top three mines Subsequently, goodwill of CVRD and the membership of Rio Tinto have delighted the industry. In respect of such a result, the above-mentioned anonymous analyst thought, "The top three mines must have had their own expectation. After all, compared with the participation of hundreds of Chinese steel companies and traders in overseas platform, what the platform of CBMX needs is to engage overseas mines in a relatively small number. At this point, CBMX is in a favorable position." The industry speaks highly of the great achievement of CBMX, believing it will enable China to have more say in the international iron ore trade. Notwithstanding, except the delight, we also have to note that both platforms, more influence may either of them have, will help overseas mines, in particular the top three mines, realize the goal of spot trade in their iron ore trade. Zhang Jiabin thinks the reason for the Chinese side to strive to promote the establishment of the iron ore spot trading platform has been to save face. Previously, China was always in a passive position in iron ore negotiations and the establishment of such a platform was proposed by globalOre in the first place and followed suit by CBMX. "The Chinese side might think that the trade volume of iron ores is so large that China ought to have a platform; and another attraction is incomes such as handling charges generated from trade on this platform." Overseas mines’ wiliness to join the platform of CBMX and even to do trade on the basis of the price index of CBMX has been more than a sign of their indifference to the platform and the price index. "To execute contracts in line with which index is indeed not important to mines with lavish profits in view of little difference between the averages of indices in a year." He added, like other commodities, to traders, their profits are almost the same whether they do trade on Dalian Commodity Exchange or other exchanges. "However, whatever platform the trade is done on, the spot trading platforms will promote the dominance of spot trade, which is likely the result that overseas mines desire most", He said, "because in the longer run, spot trade is the guarantee for the maximization of the profits of mines. And once this end is realized, steel plants in China will be reduced to nothing but processing plants." According to his analysis, spot trade means that the settled prices of iron ores can be adjusted at any time in line with changes to market supply and demand. In other words, while steel plants raise prices, so do iron ores. "As a result, steel plants can never get excess profits but instead what they will earn is just processing charges. If certain steel plants have higher costs and their products are less competitive, they may stand on the age of losses. Consequently, only those advanced private enterprises or low-cost SOEs can make profits." In his view, the profits in the process of iron ores being converted into steel products are divided mostly between mines and steel plants, meaning the profits of mines must be maximized if those of steel plants are much meager. "Whether the market is sluggish or not, if steel plants cannot make profits, the remained profits are attributed to mines."
 
Ever since last autumn, some medium and large steel plants have seen their margins less than 3%. "In such a circumstance, all profits have been captured by mines," Zhang Jiabin thought, "mines cannot control the future market demand, but what they can do is to maximize their profits by undercutting those attributable to steel plants, which is the ideal result of the dominance of spot trade."

Birth of the 172nd Independent Mine Variety in China -- Story of Shale Gas Rising onto the Historical Stage
Source: Portal Website of the Ministry of Land and Resources Citation: China Land and Resources News Date: March 31, 2012

Shale gas, regarded as a substitute for conventional natural gas, was officially verified as the 172nd independent mine variety in China at the end of last year; at the 5th session of the 11th National People’s Congress, in the Report on the Work of the Government, Premier Wen Jiabao stated clearly to “tackle key problems more quickly in the exploration and development of shale gas”; shortly after that, China’s Shale Gas Development Program (2011-2015) was issued. These facts have made the exploration and development of shale gas a headline in media. Rise of shale gas onto the historical stage has derived from arduous efforts and unselfish commitment of relevant authorities in land and resources. To accelerate the progress in the exploration and development of shale gas in China, these authorities have made painstaking efforts in recent years so that they are the real hero to launch this “energy revolution”. The development and exploitation of shale gas in large scales is still a long way to go as it is facing difficulties such as the lack of core technology, which cannot be overcome in a short period. Recently, Peng Qiming has been so busy that reporters’ interviews with him have to be done on phone. As the head of the Department of Geological Perambulation of the Ministry of Land and Resources, he has been preoccupied with a kind of non-conventional oil & gas resources just verified as an independent mine variety. “If everything goes right, the development of this new energy source will be commercialized in a few years, changing the energy structure in China and providing unexhausted power for the sustainable economic and social development in China.” Such kind of magical resources is known as shale gas At the end of last year, the application of the Ministry of Land and Resources for the verification of shale gas as an independent mine variety was officially approved by the State Council, meaning it became the 172nd independent mine variety in China. Ever since then, this newborn of mineral resources has become a favorite, drawing a lot of attention from all relevant sides in China. At the 5th session of the 11th National People’s Congress, it was so rare that shale gas was included in the Report on the Work of the Government, which stated that “to tackle key problems more quickly in the exploration and development of shale gas”. Immediately after the close of this session, China’s first shale gas development program was promulgated. Its output is expected to reach 60-100 billion m3 in 2020, almost equal to the current output of conventional natural gas. According to the prediction of Strategic Research Center for Oil and Gas of the Ministry of Land and Resources, its output is expected to be as much as conventional natural gas, approaching that of the US. An “energy revolution” triggered by shale gas has been already irresistible. Major Energy Source in Future Shale gas is a kind of nonconventional natural gas in the adsorptive and free states, which is trapped within shale formations and their interlayer rich in organic mud. It largely comprises methane and is characterized with authigene and self-deposit, widespread distribution, shallow burial and a long production cycle. As a clean and efficient energy source, shale gas has suddenly risen to be a sensation in the global oil and gas exploration, and its exploration and development has become a common choice for major countries and regions with abundant shale gas resources.  “Shale gas will become a major energy source in future and change the world energy landscape.” said Peng Qiming. According to the latest statistics of the U.S. Energy Information Administration, the recoverable reserves of shale gas amount to 189 trillion m3, consisting of 55 trillion m3 in North America, 51 trillion m3 in Asia, 30 trillion m3 in Africa and 18 trillion m3 in Europe. These days, the exploration and development of shale gas has been booming in North America, Asia, Europe, South America and Oceania, initiating an “energy revolution”. Take the US for example, which has been the first one and most successful one in shale gas development. Shale gas revolution in the US has undermined the structure of the global LNG market and its impact will get more prominent so as to change the world energy landscape. Thanks to breakthroughs in development techniques of nonconventional natural gas, especially shale gas, US replaced Russia for the first time with a shale gas output of 624 billion m3 to become the largest producer of natural gas in the world, reversing its long-lasting dependence on imports in terms of natural gas consumption. Experts even believe that the shale gas reserves in the US will relieve its concern over energy supply in the next 100 years For China, shale gas is also an energy source of strategic importance. China is both a large energy producer and a large energy consumer. But the energy structure is not rational enough. In 2011, the dependence of China on imported natural gas was as high as 24.3%. “Clean natural gas energy has a proportion as low as 4% in primary energy consumption in our country, some 20 percentages lower than the world average.” said Zhang Dawei, deputy director of the Strategic Research Centre for Oil and Gas, Ministry of Land and Resources. From the information released at the 5th session of the 11th National People’s Congress and the 5th session of the 11th CPPCC National Committee, to reduce carbon emissions and to grow in a low-carbon manner, China is speeding up the adjustment to its energy structure. In the Report on the Work of the Government, Premier Wen Jiabao stressed to improve the energy structure and promote the use of conventional energy sources in a clear and efficient fashion. The reporter has learnt that the composition of Chinese energy consumption will be adjusted to raise the proportion of natural gas to 8%-12% in primary energy consumption during the “Twelfth Five-Year”. In the long run, Chinese social and economic development will lead to strong demand for energy sources, especially those clean energy sources. As a kind of clean and efficient fossil energy sources, shale gas has the potential to become a major pillar sustaining the low-carbon economy.  “It is an issue of strategic importance and concerning the overall situation in building a moderately prosperous society in all respects to facilitate the exploration and development of shale gas in order to realize the leap-frog development of the shale gas industry and to increase the supply capacity of gas energy sources.” said Peng Qiming. The State Council has also put a high value on the exploration and development of shale gas as it has not only put shale gas onto the list of independent mine varieties, but also has required relevant government departments “to formulate a program for the development of shale gas as soon as possible by careful survey of such resources in the first place and to study techniques and methods for its exploitation,” “to strengthen research on its formation mechanism, enrichment conditions and key target regions and to tackle technical problems.” These facts all point out the determination of the Chinese government in the development of shale gas resources. Research already in Process China has a robust resources basis for the development of shale gas resources.
 
Shale gas resources in China are characterized by a lot of types, widespread distribution and great potential. Marine facies sediments extend for 3 million km2, marine-terrigenous alternated facies sediments more than 2 million km2 and terrigenous-marine facies sediments about 2.8 million km2. All these sedimentary regions have the geological condition of shale formations with abundant organic matters of various kinds. Shale layers have been sufficiently developed in all phases of geological history so that a series of shale formations with rich organic matters have taken shape in marine, marine-terrigenous alternated and continental facies. Indeed, China is among those countries which have conducted research on shale gas earlier. As early as 2004, it set about tracking the progress of international research on shale gas. Since then, the authorities in land and resources have worked with relevant universities and research institutions to do a lot of preliminary research, which has laid a good foundation for “the leapfrog development of the shale gas.” The reporter learnt from the Strategic Research Center for Oil and Gas, Ministry of Land and Resources, based on years of research, the Ministry of Land and Resources proposed to take the Yangtze Plate as the prospective area in China with shale gas enrichment in 2008, launched the program of screening the potential of shale gas resources in key regions in China and favorable zones in 2009, and set up a pioneering pilot zone for strategic survey of shale gas resources in Sichuan, Chongqing, Guizhou and Hubei in 2010. At the meantime, the ministry organized some experts to conduct preliminary survey and research on shale gas resources in Jiangsu, Zhejiang, Anhui and some northern regions, getting a rough picture of the distribution of shale in some favorable zones in China, identifying major series of strata and developing preliminary methodologies on the evaluation of the potential of shale gas resources and standard framework for screening favorable zones, and screening a number of prospective areas with shale gas enrichment. Such efforts have laid a solid foundation for nationwide survey and evaluation of the potential of shale gas resources and screening of favorable zones. Meanwhile, some research institutions and universities have also engaged in this mission. As the first Chinese university to offer courses and conduct research on shale gas, China University of Geosciences in Beijing has undertaken the national special research programs in zoning survey and evaluation of the national oil & gas resources strategy and completed a number of research programs related to shale gas, in which innovative research results have been made. Wang Hongbing, Secretary of the CPC committee at the university, said, “Our university has built and maintained good exchange and cooperation with the Strategic Research Center for Oil and Gas, Ministry of Land and Resources (the Center) to jointly complete a lot of exploratory and pioneering research on shale gas and make good leading experiments. The Center engages in research of strategic policies, planning and overall arrangement, zoning survey and evaluation of oil and gas resources as well as infrastructure and support for management, supervision, conservation and proper use of oil and gas resources. In recent years, devoting to research on the exploration and development of shale gas, it has organized experts to tackle underlying and strategic issues in the exploration and development and conducted pioneering survey and research as well as demonstration and promotion programs. According to Zhang Dawei, in 2011, in the program for zoning of the national oil & gas resources strategy, the Ministry of Land and Resources set a sub-program, “national survey and evaluation on the potential of shale gas resources and favorable zones”, in which it divided the national land territory into upper Yangtze & Yunnan-Guizhou-Guangxi region, middle-and-lower Yangtze & Southeast region, North China & Northeast region, Northwest region and Qinghai-Tibet region, organized 420-strong technicians in 27 organizations to carry out a systematic evaluation on the potential of shale gas resources. “And eventually get a clear picture of Chinese shale gas resources on our own.” The result of the evaluation indicated that shale gas in China is characterized by intricate geological conditions, a range of resources varieties and relatively concentrated distribution. The potential of its recoverable reserves is 25 trillion m3 (not including that in the Qinghai-Tibet region), around the same level of that of conventional natural gas on the continent and approaching the shale gas reserves of 24 trillion m3 in the US. The program screened out 180 favorable zones with a total area of 1.11 million km2. Significant Breakthrough to the Exploration and Development Indeed, the Chinese central government has always been paying much attention to the development of the shale gas. On August 17, 2009, Li Keqiang, Member of the Standing Committee of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, delivered an important speech on strengthening the geological survey and exploiting of China-based resources. On the same day, the Strategic Research Center for Oil and Gas, Ministry of Land and Resources, teaming up with China University of Geosciences in Beijing, initiated the first prospecting program in China on shale gas in Qijiang and Wuxi counties, Chongqing, marking the official launch of the exploration and development of shale gas resources in China On November 15, 2009, during the first visit of the US President Obama, China and US governments signed the Memorandum of Cooperation on Shale Gas between the U.S. Department of State and China`s National Energy Administration. Ever since then, China and the US have carried out inter-governmental exchanges for many times, promoting the survey and prospecting of shale gas in China. A lot of government bodies and other organizations have actively committed to the development and research of shale gas resources, including relevant state ministries and commissions including the Ministry of Land and Resources, local governments at different levels, related oil companies and even non-oil-gas ones, prospecting institutions, universities and research institutions.   "As a result, although China has a large gap with US in the exploration and development of shale gas as we started later, we have had a good start and a positive development trend because the state has paid a lot of attention to it and the Ministry of Land and Resource has taken effective measures."said Peng Qiming. Based on effective work, China’s exploration and development of shale gas has made substantial progress. According to Zhang Dawei, until now, China has finished the drilling of some 30 shale gas exploratory wells, in which fracturing in 18 wells have brought out commercial gas. It means that China has roughly mastered the fracturing technique for shale gas and these wells will have a good prospect. Chinese companies have carried out cooperative development and research with foreign companies such as Shell and Exxon Mobil. Relevant Chinese companies and research institutions and universities have formed special departments to start research on shale gas’ formation mechanism, enrichment regularity and conditions for deposit and conservation, while oil companies are attempting techniques for shale gas horizontal well drilling and completion and multi-interval fracturing. Moreover, management over shale gas resources in China has also started. In view of shale gas being a new energy source, the Ministry of Land and Resources has strengthened the management over the exploration and development of shale gas by formulating a work plan on the management over shale gas resources, in which the approach, work principles, main contents and focuses of the management over shale gas resources have been further clarified. Based on the survey, evaluation and research on shale gas resources in recent years, the ministry conducted the appraisal and application of shale gas for being listed as an independent mine variety through the comparisons between shale gas and natural gas and CBM. And with the approval of the State Council, shale gas has been managed as a new mine variety. Meanwhile, it has also held bidding events for the assigning of the exploration rights of shale gas, aiming to reform the shale gas resources management system by introducing the market-oriented mechanism. "In 2011, we successfully conducted the bidding events for the assigning of exploration rights of shale gas, completing the first market-oriented attempt in oil and gas mining rights and taking an important step toward the market-driven reform to oil and gas mining rights. This year, we will continue this work."said Peng Qiming. Opportunities and Challenges While we have made great achievements in such a short period, Chinese exploration and development of shale gas has been just in its initial phase for the moment and thus commercialized development and utilization of shale gas still has a long way to go According to Peng Qiming, Chinese exploration and development of shale gas have the following opportunities for now and in the future: First is the state policy support. As the Chinese economy is growing steadily, its macro economy is positive, which has aroused the confidence underlying the development of shale gas in China. Second, great potential in shale gas resources in China has laid a good resources basis for the exploration and development of shale gas. Third, foreign techniques for the exploration and development of shale gas have largely taken shape and China has also built up techniques in this aspect, both of which the development of shale gas in China can draw upon. Fourth, strong demand for gas energy sources has established a good environment for the development of shale gas and such strong demand can act as internal power driving its development. At the meantime, Chinese exploration and development of shale gas also confronts great challenges: First, the shale gas resources basis in China needs further clarification, which is a difficult task; second, key techniques for the development of shale gas require more intense research; third, the diversified shale gas investment mechanism is yet to be established and the market access should be accelerated. Zhang Dawei, committed to shale gas research for a long time, thinks many problems exist in the current exploration and development of shale gas in China, such as incomplete market access, lack of policy support and core technology, inadequate survey and under-furnished official site. Nonetheless, he also believes, in view of Chinese advantages for the acceleration of the development of shale gas, the course of the development and utilization of shale gas in China can be shortened significantly to realize the leapfrog development and the goals specified in the Shale Gas Development Program (2011-2015), if proper measures are taken. (By Li Xiang)

The Top Three Mining Giants to Join the China Spot Iron Ore Trading Platform
Source: Portal Website of the Ministry of Land and Resources   Citation: China Land and Resources   News Data: March 29, 2012

In recent days, relevant leading official at China Iron and Steel Association (CISA) stated that the top three mining giants - BHP Billiton, Rio Tinto and CVRD will join China Spot Iron Ore Trading Platform, which is scheduled to be put into trial operation on March 29 and start actual trade on May 9. The platform is for imported iron ore trade for now, excluding trade in iron ores produced in China. (By Zong He) (Previously, the world’s No. 4 mining company - Australia-based FMG already signed the market access agreement with China Beijing International Mining Exchange (CBMX), officially becoming a sponsor member of China Iron Ore Spot Trading Platform and the first overseas mining company to join the platform. The platform was jointly launched on January 16 by CISA, CCCMC and CBMX in Beijing. It will be helpful for China to secure a say on pricing in iron ore international trade.)

The integrated results of the “Qinghai-Tibet Plateau geological theory and prospecting breakthrough” received the top award of the national scientific and technological progress
Source: The Ministry of Land And Resources website   Citation: China Mining News   Date: Feb. 16, 2012

Xinhua News Agency - The integrated results of the “Qinghai-Tibet Plateau Geological Theory and Prospecting Breakthrough” received the top award of the national scientific and technological progress at the National Science and Technology Awards Conference, held by the CPC Central Committee and the State Council in Beijing on the morning of February 14. In the process of implementing the project, geologists have discovered three giant metallogenic belts, seven super-massive and 25 massive deposits, which established the Qinghai-Tibet Plateau as an important reserve base of strategic resource of our country. The innovation of this project is that it subverts the “Western model” in tectonic theory so that determining the dominant position of Chinese scientists in the Qinghai-Tibet Plateau Research; break through the constraints of the traditional international metallogenic theory, leading the research direction for the metallogenic theory of the global continent. “It is a great inspiration and stimulation that the project of the ‘Qinghai-Tibet Plateau geological theory and prospecting breakthrough’ won the National Scientific and Technological Progress Grand Prize”, stated Zhang Hongtao, the former chief engineer of the Ministry of Land, on behalf of all the award-winning staff, he added that the achievement was made by scientific and technological personnel from hundreds of scientific research, teaching and geological exploration bodies through ten years of collaborative innovation, hard work, and the challenges of life restricted area, the brave fight on the snow-covered plateau. It has filled the last blank area of the geological survey of our country, tackled a number of major scientific challenges, and realized major prospecting breakthrough, which is of great significance to improve the strategic situation of the national mineral resources, and will also play an important role in promoting the economic prosperity of the Qinghai-Tibet region, social harmony and the stability in border areas. It is learned that a total of 374 projects and 10 experts in science and technology were honored for the national science and technology awards of 2011, among which, two were capped with the National Top Science and Technology Award; the National Natural Science Award honored 36 projects, of which the first prize was vacant while the number of the second prize winners reached 36; 55 projects were awarded the National Technological Invention Award, including two first prizes, and 53 second prizes; the National Science and Technology Progress Award awarded 283 projects with one top prize, 20 first prizes, and 262 second prizes; In addition, eight foreign scientists were granted the International Scientific and Technological Cooperation Award of the People’s Republic of China

Ministry of Land and Resources: Mineral Distribution Pattern Changing in China
Source: Portals of Ministry of Land and Resources   Citation: Portals of Central Government   Date: February 13, 2012

Report from Xinhua News Agency on February 12 (Reporter Wang Libin) The correspondent learns from the National Geological Survey Working Conference 2012 which concluded on the twelfth that as China invests more in the non-profit geological prospecting, a series of world-level mining bases have been successively found in the western region, bringing the complete changes in the distribution pattern of the most mineral resources in China.    Wang Min, Deputy Minister of the Ministry of Land and Resources and Director of China Geological Survey, said that through the effort of the central and regional governments, China has now established a geological prospecting system platform with diversified investment, multilateral cooperation, orderly coordination and efficient implementation. The mutual advantages are complemented in fund, technology, talent and management, achieving the large-scale investment and great breakthrough. In 2011, the national investment in the geological prospecting exceeds RMB 120 billion, among which the investment in the solid mineral prospecting is more than RMB 50 billion, up by 30% year on year. The central financial investment encourages ten times more regional and social investment, greatly promoting the commercial geological prospecting.       Wang Min said that in Huayuan County, Hunan Province, the newly increased resources in the Phoenix Zinc-lead mine have reached three million tons so that the total resources are expected to exceed 20 million tons, making the mine enter the world level rank. Tibet is rich in large copper and gold mineral in Dobuza and Bolong, with estimated copper resources of 5,770,000 tons and gold of 260 tons. The newly increased iron ore resources of Xingjiang’s Awulale Iron-steel mine reach 260 million tons, with the total of 1.08 billion tons. And Molahe and Qikerke iron mine in Tashkurghan, West Kunlun, are explored and estimated to have the resources of 800 million tons. Besides, two large iron and molybdenum minerals and four large copper and molybdenum minerals are prospected in Qimantage, Qinghai, with iron reserves of 480 million tons and copper and zinc reserves of 4.2 million tons. The prospected gold resources in Gansu Daqiao Gold Mine reach 70 tons. Over the recent years, the non-profit geological work drives the survey of the mineral resources in the western area. So it is expected that a bulk of large iron mine bases, copper ore and zinc and lead base with tens of millions of tons, gold ore bases with tens of millions of tons, and bauxite ore base with hundreds of millions of tons will come into existence, which will gradually changes the distribution pattern of the key mineral resources in China.

Estimated Exploitable Resources of Shale Gas Reach 31 Trillion Cubic Meters in China
From: Portals of Ministry of Land and Resources   Source: People’s Daily   Time: February 13, 2012

It is learnt from the National Geological Survey Working Conference concluded on February 12 that China will strengthen the survey and assessment of the unconventional energy resources such as shale gas as well as improve technologies to exploit those resources. Especially, China will strengthen the survey and appraisal of the shale gas, aiming to relieve the shortage of oil and gas in our country. In doing so, we will see a formation of the new pattern in the oil and gas prospecting and exploitation, which will help change the construction of our national prospecting and exploitation and even the entire energy resources. Wang Min, General Director of China Geological Survey and Deputy Minister of the Ministry of Land and Resources, said that in 2012, China will strengthen the survey and assessment of the unconventional energy resources such as shale gas, coal bed gas, oil shale, tight sandstone gas, oil sand as well as improve technologies to exploit those resources. Besides, China will promote the special declaration in the survey and appraisal of the shale gas and promote its development by setting the shale gas as the independent mineral resource to survey and appraise so as to promote its development. It is introduced that the shale gas is an independent mineral resource newly granted by the State Council. Lying in the shale with organic mud and between the shale layers, it is an unconventional natural gas in an absorptive and floating way, with methane as the major content. It is clear and efficient energy resource and chemical raw material, mainly used as the domestic gas, auto fuels, and also to supply heat for urban area, to generate power as well as for the chemical production. The production of shale gas needs no discharge of water with long production cycle about 30-50 years. The success rate of the prospecting and exploitation is high with higher industrial and economic values. China is rich in shale gas resources. It is estimated that the resources of shale gas in China are about 31 trillion cubic meters, equal to those of conventional natural gas.     The development of shale gas began in America. The American output of shale gas in 2011 had reached 180 billion cubic meters, greatly changing the consuming structure of energy resources in America. According to the appraisal of all the areas except Tibetan region by the oil and gas center of the Ministry of Land and Resources, the resources of shale gas in China are roughly equal to those in America. It is predicted that in 2020, the output will exceed 100 billion cubic meters, catching up with the current output of the conventional natural gas. In 2030, the output will reach that of the conventional natural gas, nearly the same as America. Trying to realize the scale exploitation of shale gas as soon as possible will help relieve the shortage of gas and oil in China, which in turn will change the construction of our national prospecting and exploitation and even the entire energy resources. (Yu Meng)

Gold Output in China Ranking Top for Five Consecutive Years
Source: Portals of Ministry of Land and Resources   Citation: China Land and Resources News   Date: February 3, 2012

In 2011, the gold output in China has stood at 360.96 tons, 20 ton more than last year, up by 5.89%, ranking first as the gold producing county in the world for the five consecutive years. The provinces which rank among the top five are Shandong, Henan, Jiangxi, Fujian, Inner Mongolia, with the output accounting for 59.90% of the national output.

China’s Oil Resources to Rank Second in 2020
Source: Portals of Ministry of Land and Resources   Citation: China Land and Resources News   Date: January 31, 2012

It is reported that the second phase of the construction project for Chinese oil strategic storage will have been completed this year. Then, the total stored oil will hit 274 million barrels with approximately 37.53 million tons. Besides, China will plan to finish the entire work of constructing strategic oil storage by 2020 with about 500 million barrels of oil. By then, our oil storage will rank second in the world.