CHINA MINING News

Chen Jinghe: the current situation and future of China’s mining industry under the new normal economy

Source: www.zgkyb.com   Citation: www.agkyb.com  Date: October 26, 2015

Editor’s Note:

Where you are in is determined by your location, where you’ll go by your angle, what you’ll see by your level, and what your future is by your attitude.

The “new normal” of China’s economy and the “winter” of China’s mining industry gave a dual influence on these mining industry leaders who suffered. How will they regard the current situation and think of the future?

Mr. Chen Jinghe, president of Zijin Mining Group Co., Ltd., believed that though “winter” brings challenges, the new normal can give birth to big opportunities.

Four years ago, Chen had warned the coming of mining industry’s winter, which had already become a truth. He predicted that the minerals price would continue float on the current price, the price of certain kinds may have a further glide and rebound later. However, this rebound phenomenon still couldn’t bring the “Golden Ten Years” glory back again.

As a member of the mining industry, Chen jinghe admitted that a sober understanding of the current economic and mining situation and a more fully estimation of the difficulties would be a safer performance. In his view, slack demand and low price of the minerals is the new normal of the mining industry. What mining companies should do is to have a solid skill and control the costs rather than complain the market as nobody can drive the market. Besides, in this clod winter of mining industry, it’s necessary to reform and adjust the management system and many other measures that formed in the peak time. Survival is the first, development comes later.

Chen had confidence in the future economic development and the mining prospect. He said that in the new historical period, mergers and reorganization between mining companies will become increasingly active. Under the guidance of One Belt And One Road strategy, width and the strength of China`s mining enterprises’ participating in the global mining market will be further increased. China`s mining enterprises will become one of the most active powers in global mining market and thus will lead to a certain degree of change of the global mining pattern.

Perhaps Chen’s opinion couldn’t be accepted by all the insiders, however, we must admit that in this mining winter period Chen Jinghe, as one of the leaders of our major mining enterprises, leaded enterprises starting from themselves to face the challenges and seek for breakthrough in the crisis. His thinking and practice for development should be affirmed.

So did this happened in reality as what he said. There is no big change in the development strategy of Zijin Mining Group under the new normal. “Reform, economic growth and development” is still the main guideline in Zijin Mining Group’s future development, internationalization is the main direction of the group in it’s new round of development and capital spending and operating cost control is the main work.

In order to get a wider range of transmission of this positive voice across the whole industry, we published Chen’s full speech at the 2015 CHINA MINING Congress and Expo as a reference.

It’s my honor to stand here in the CHINA MINING Congress and Expo 2015 to talk about China’s mining industry with you all. What we’ll discuss today is a really heavy topic as we are in a “winter” of the mining industry now, in which whoever related to mining industry can feel the chill and would suffer from. The common concern is, how long will this winter last? Is it the coldest time now? What’s the current situation and future of China’s mining industry? I’ll show my personal views as follows.

1.mining industry’s winter in the new normal

1.1   Weak demand greatly affects the mining industry in the new normal

“The new normal” is one of the often-used phrases in the Internet related to economy and in different medias. That China has stepped into the “economic new normal” has become a common sense in the market, which is the stage feature of China’s economic development. During this phase, the economic growth has decreased from a high speed to a high-middle speed, and the tertiary industry has become the main force taking place of the secondary industry. Growth pattern has changed as well, from a growth of amount that consumes vast resources to the growth of quality that driven by innovation, from investment pulling to consumption pulling.

The high speed economic growth has met its ceiling in the past 30 years. The generation in which amount produces growth and money has gone, leaving surplus a common economic phenomenon in this new normal. Among them, the real estate market had a significant influence on Chinese economy, especially on the metal materials industry.

In terms of the bulk commodity as the metal, it’s production and consumption amount in mainland China has accounted for 40%~50% of the whole world. China has created many of the world’s first, this huge consumption formed a super cycle for bulk commodity that lasts for more than ten years. People were crazy about mining in the past and lots of investors made their fortune overnight. Such high profit attracts heavy investment which gradually result in over capacity. The minerals price began to fall, or even slump three years ago and lead to an extremely difficult situation for mining industry now, in which investor are trapped. Coincidentally, there’s a real lesson that the once flourishing coal industry decayed from a fat profit to a total loss.

The population of mainland China consists of 20% of the world population and the minerals produced and consumed surpassed double of the global average share, which means it’s far from possible to pull a larger global demand growth only by Chinese market. Though China still has a certain demand growth for the bulk commodity. The growth rate and amount are significantly slowed down. This status of demand growth will remain exist in a relatively long period of time.

1.2   price swings in three to five years and a continuous glide

Four years ago, I warned the coming of mining industry’s cold winter at the China Prospectors Annual Meeting, on which many peers don’t agree. However, it has become true unfortunately with some minerals’ price keeping declining since 2012 and thus lead to a overall collapse.

National bureau of statistics shows that the mining industry profits has presented a yearly decline and the decline range has expanded year bu year since 2012, with a 17.34% decline rate in 2013, 23% in 2015 and 57.3% in the first eight months this year. At present, mining enterprises are experiencing a very serious management condition. Predictably, the “four mines” problem repeatedly called on by he ex-minister Zhu Xun will reappear.

Many peers have been looking forward that the minerals prices could return to the orbit of rapidly rising as what happened before, a quick realizing of a ‘V’ type inversion in 2009 after the financial crisis in 2008, which seems unrealistic now. I though that the minerals price would continue floating on the current price, the price of certain kinds may have a further glide and may rebound later. However, the “Golden Ten Years” glory could never come back again.

As a matter of fact, many mining enterprises has further expanded their production to control unit cost when there’s a price collapse and a continuous losses. For example, in the iron industry, though the price has slumped about 70%, some international iron giants that possess resource and cost advantages continued to increase their production. Hence, even if the price slump has leaded to many high-cost mines’ shutting down, it’s still not easy to reduce the market supply, as its an obvious case of the current iron ore concentrate and coal production. It needs a much longer time than we expected to achieve a reasonable price return through sharply reducing the capacity and output.

1.3   With the deficiency of China’s mining industry, survival is the primary target.

Compared with other peers in the world, China’s mining industry faced more difficulties and problems.

First, the mineral resources in China is small and medium-sized in general with low quality. What’s more, it’s hard to exploit those resources, to acquire the mineral right and to coordinate the relationships among land, woodland, environmental protection approval and the local government. Besides, mining industry marketization degree is not high, the overall system is relatively rigid, enterprise are in small size and large amount, the large ones are not so strong as it should be. Most of the burden is heavy, the debt ratio is high, the cost is high, in the face of mining the cold winter, the lack of response and effective measures. With heavy burden, high debt ratio and high cost, most enterprises had nothing to do when facing this cold winter in mining industry.

Second, China`s mining economy is a vassal economy, state-owned mining still accounts for absolute advantage. It is a major characteristic to control mineral resources by regionalism. Even in very difficult current mining circumstances, mergers and reorganization is rare. That to sell all the apples when they are bad is not a good idea.It’s a better choice to solve the problem of mining under the market laws.

Third, China’s bulk minerals resources enjoyed a poor endowment condition and a high external dependency. 56% iron ore, 83% copper, 83% bauxite and 57% crude oil need to be imported. At present, it’s a truth that many small and medium-sized mining enterprises with high cost in China has closed down, even though the dominant mineral, the coal, whose production ranks first in the world, is trapped under the impact of the low-cost mines overseas.

As a member of the mining industry, it would be safer if we have a sober understanding of the current economic and mining situation and a more fully estimation of the difficulties. Slack demand and low price of the minerals is the new normal of the mining industry. What mining companies should do is to have a solid skill and control the costs rather than complain the market as nobody can drive the market. Besides, in this clod winter of mining industry, it’s necessary to reform and adjust the management system and many other measures that formed in the peak time. Survival is the first, development comes later.

2. The new normal gives birth to big opportunities

2.1    Active factors in the crisis

There’s no doubt that China’s economy will keep growing at a high speed in the next decade.Even a 5% growth is pretty good under the background with a big economic base. According to some relevant calculations,the main minerals demand will continue to maintain a certain growth, but the growth rate and growth amount will significantly slow down to 2025.

As we can see, with the economic growth and especially the speeding up of industrialization, emerging markets economics, such as south east countries, India and countries along the “One Belt And One Road”,will become the major regions in which there’s an increased demand of the new minerals. With the gradual recovery of economy, the western developed economies’ demand for mineral raw materials will have a certain growth.

Quite a number of the current commodity prices are near the cash costs. In recent years, a majority of comprehensive cost of the new or upcoming new capacity is much higher than the product price and those capacities fell into a state of the mine production losses or even a collapse because of its huge capital expenditure and construction investment. With the disappearance of the costs red line and the high cost capacity, minerals price has a limited space for downside.

In the new historical period, mergers and reorganization between mining companies will become increasingly active. Under the guidance of One Belt And One Road strategy, width and the strength of China`s mining enterprises’ participating in the global mining market will be further increased. China`s mining enterprises will become one of the most active powers in global mining market and thus will lead to a certain degree of change of the global mining pattern.

2.2   Some excellent enterprises are qualified for the global mining industry competition.

Chinese market and it’s minerals production and consumption has made an important contribution to the global economy and the development of mining industry. China`s mining industry has made great progress as well. With the "going out" of China`s mining enterprises, China has become one of the important members in the big family of global mining industry.

Many Chinese enterprises failed and got some lessons when they took the policy of “going out” at the high time of market bubble. However, we shouldn`t blame these pioneers as it’s never been so easy to succeed. And international mining giants would also make the same mistake, many international mining companies mining suffered a huge financial and Provisions losses.  For example, an international mining giant bought an ore deposit with $4 billion in 2011 and sold it with just $50 million three years later, this is the market!

We should see that China`s mining enterprises have already had a considerable scale and level, some enterprises have had the basic capability for competing in the market of global mining. In the aspect of innovation and application of advanced mining development technology and the cost control, in the aspect of the development and utilization of low grade and difficult mineral intergrowth resources and in the aspect of exploiting small complex ore deposit mining, Chinese mining enterprises have been in the international leading position in some areas and have created a lot of myths in mining exploitation. What the China`s mining industry currently lack of is the international operations personnel and experience, which could only be solved through practice.

2.3   “Going out” is the hope of China’s mining enterprises future development

China has an overall excessive exploitation of mineral resources, a low maintain reserves and a low per capita ownership level. most of the mining company just developed domestically with a very limited space and a bigger difficulty.

At present, the global mining market is in its downturn, quite a number of the mineral resources and mining companies’ value is severely undervalued. Mining companies with strength and ability should take this opportunity to boldly take the policy of "going out” and to participate in the cooperation and competition of global mining market. this is the hope of the future development of China`s mining enterprises. China is the world`s second largest economy and the world`s largest minerals market. During this period, if we haven’t cultivated transnational mining groups that have important international influence, this will be a great failure in mining industry!

Over the past decade, Chinese commodity has gone global. With the speeding up of the process of RMB internationalization in the future, China`s capitals’ fully entering the global capital market is just around the corner. China`s mining companies and investment funds will take this great opportunity to comprehensively and deeply cooperate with international mining enterprises to promote global economic growth and the revitalization of the mining market.

3. New action under the new normal

3.1   Government should know their responsibilities and obligations

Currently, many of the regulations related to mining are promulgated at the peak time of mining industry, which work well on disciplining the market order and following the relevant laws at that time. However, these regulations have an excessive strictly examination and approval process, which limits the access of mining right and market circulation. Cumbersome procedures and a considerable time in completing a full mining licenses will put bigger constraints on the marketization of mining industry. In addition, in the mining industry profitable period, state and some relevant provinces introduced many harsh tax policies. Some local government regarded the mining right the same as the land, even the basic conditions acquired by the application for the exploration right were also replaced by bidding procedures. All these has gone against to the healthy and benign development of the mining market.

In recent years, the State Council has taken a major reform of examination and approval matters, for example, the National Development and Reform Commission and the administration of industry and commerce decentralized many rights and introduced many convenient provisions on project examination and approval, the enterprise registration management and mergers & reorganization in the hope of activating the market that through decentralization. We expected that the mining related management department and the finance and tax departments could complete the related reform as soon as possible to warm the mining companies and help them ride out the storm.

3.2 Focus on the difference between the background anomaly and the environmental pollution and regulate mine environmental well

Ensuring environmental security is the bottom line that mining enterprises must stick to. Zijin Mining Group had made a mistake in this regard at the price of a huge losses and had learned a lesson. We should see that, in the past 20 years, China`s mining enterprises’ progress in mine environmental protection is huge, the government`s regulation of environmental protection is extremely harsh and the regulatory supervision is more severe than that in overseas in some aspects.

Here I want to say that the discovery of mineral deposits is mainly by the anomaly of water, stream sediment, soil and rock elements, which is now called "heavy metal pollution” in terms of metal. While actually, we should strictly distinguish the difference between the “heavy metal anomaly” in the natural background and “heavy metal pollution” caused by human exploitation, especially in the phase of reconnaissance, in which the geological work is very important. As far as I know, the so-called “heavy metal pollution of soil” that often appears in the media should be the one that formed in the nature, which is also called as background anomaly. We hope our geological and mining industry peers and regulatory departments can attach great importance and pay attention to the difference between the background anomaly and environmental pollution caused by development, otherwise the whole mining industry will suffer from "an accident", in which everyone should be blamed. Furthermore, we also hope that the relevant departments could learn the advanced environmental management experience of overseas to improve the scientific supervision level.

3.3   Strongly support the mining enterprises to “go out”

The proposing of “One Belt and One Road” pointed out the direction of "going out" of mining enterprises and created a good policy environment for the internationalization of China`s mining enterprises. I wish that the government can provide more policy and financial support to enterprises that went out. For example, provide convenience capital market financing channel to these "going out" enterprises, use plenty of foreign exchange reserves to provide cheap funding for overseas mergers and acquisitions and project construction for the enterprise, at the same time provide more convenience in terms of project examination and approval.

We should learn from advanced international counterparts humbly and combine our own advantage with the objective conditions in the project location in strict accordance with international advanced standards and attaches great importance to the harmony development of community coordinated. Enterprises participating in the overseas investment should make full use of all the advantages and strength in all aspects, uniting to compete in the market to avoid vicious competition.

3.4    Industry association should become a shelter for enterprises to keep warm

As an Industry Association in mining industry, China Mining Industry Association and other relevant associations play a positive role under the mining industry cold winter. In terms of policies and regulations and related taxes and dues, seriously listening to the views of enterprises, actively and systematically reflecting the current situation and demands of the mining industry to the relevant government departments, building a good mining development environment to provide mining enterprises in this cold winter with a shelter to keep warm.

3.5    Zijin Mining Group is willing to develop hand in hand with all the peers.

My dear leaders, colleagues and collaborators, thanks for your full supports to the development of Zijin Mining Group!

Under the new normal, there’s no big development strategy changes in Zijin Mining Group,  internationalization is the important even the main direction inthe new round of development. We focus on some large mature metal mining projects such as gold and copper etc.We are very willing and attaches great importance to the cooperate with large mining companies in home and abroad.

Zijin Mining Group carried huge pressure of business when facing the slump of metal prices.  “Reform, economic growth and development” is still the main guideline in Zijin Mining Group’s future development, internationalization is the main direction of the group in its new round of development and capital spending and operating cost control is the main work. minerals gross profit margin in Zijin Mining Group is higher than most mining companies, which means a strong ability to resist risks. We are still full of confidence when facing the future!

The domestic development of Zijin Mining Group is successful in the past 20 years. Overseas development is the key to the future. The company will continue to be in accordance with the thought and model of innovation and be fully in combination with the practical situation to solve the difficulties and problems existing in the company`s internationalization process. We are very willing to work with counterparts and investors hand in hand resisting mining winter and welcoming the mining spring! (Liu Aiying)

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises. For more information about CHINA MINING, please visit: www.chinaminingtj.org.

Significant improvement achieved in China’s utilization of mineral resources

Source: www.zgkyb.com  Citation: www.agkyb.com  Date: October 26, 2015

The Comprehensive Utilization of Mineral Resources Forum had been annually held for 5 years. It aimed to create communications for advanced mining technologies, facilitate information sharing, strengthen technological innovation and application and improve resource utilization. The Comprehensive Utilization of Mineral Resources Forum 2015 was pluralistic, at which guests had made speeches and different views and experiences had been shared and exchanged.

Basic Situation of Mineral Comprehensive Utilization in China

Mr. He Bingqing, Vice President of Chinese Academy of Land and Resources Economics introduced the comprehensive utilization and progress of mineral resources in China from utilization efficiency, development potential and policies.

Thanks to 10 years of development and progress, the utilization efficiency of mineral resources in China had improved significantly, especially in energy consumption for unit GDP according to statistics. On one side, it reflected the progress of China’s utilization efficiency of mineral resources and its great success of economic restructuring. On the other side, it showed that despite current increasing depth and difficulties of mining, the comprehensive mining recovery rate in China had steadily increased 4.8% and its land mining recovery rate remained over 96%. In addition, the utilization efficiency of tailing had also increased gradually. 

It was said that the Chinese Academy of Land and Resources Economics has set a goal to improve the comprehensive utilization efficiency of national metal tailing to 20%and it was expected to be able to accomplish this goal.

In terms of development potential, China had great potential in the comprehensive utilization of mineral resources due to its rich reserves of low-grade mineral resources and mineral tailings. It can be seen that China has ushered in a new era of secondary resources recycling.

In terms of policies, comprehensive utilization of mineral resources had been listed as one of the top priorities in the Strategic Action Plan for 2011-2015 by Ministry of Land and Resources. Since the 18^th CPC National Congress had put forward the ecological civilization construction, resource conservation and comprehensive utilization of resources had been highlighted in policies including Suggestions for Strengthening Ecological Civilization Construction and the Ecological Civilization Master Plan, to promote a fundamental change in resource utilization. In addition, comprehensive utilization of mineral resources had been included by each department in policies and programs including energy conservation and emission reduction, recycling economy and promotion programs. In recent years, the ministry has made a comprehensive selection and promotion of advanced technology, and summed up and promoted over 210 advanced technology. As of the end of last year, the ministry has amended and improved some important measures to promote the efficiency of comprehensive utilization of resources. 

Thus, China’s focus on mining industry had shifted from mineral exploitation to resource conservation and intensive utilization.

Difficulties in Rational Evaluation on Mineral Reserves

With the iron ore price dropped 60% than early 2014, the net profit of four global mining giants including Rio Tinto, BHP Billiton, Vale, FMG in 2014 decreased over 85% according to their 2014 Earnings. Mr. Wang Huili, director of Technical Services Department of Deloitte commented that mining industry belongs to manufacturing sector whose PM2 hovered around 50 in recent 2- 3 years due to slowdown economy. It indicated that investors lacked of interest in mining industry. To some extent, it also indicated that it would be pragmatic to improve the comprehensive utilization of mineral resources.

According to Mr.Yu Haifeng, director of Dept of Mineral Resources Reserves of MLR, Ministry of Land and Resources had introduced comprehensive utilization project of mineral resources, initiated comprehensive utilization demonstration sites and made survey on mining recovery rate,ore dressing recovery rate and comprehensive utilization rate of 22 major mineral resources mining project. The minimum target for rational exploitation of 22 mines had been issued and 210 advanced technologies for mineral exploration and comprehensive utilization had been selected. All these effort had propelled China’s comprehensive utilization of mineral resources to a new era.“At present, the fourth selection of advanced technologies for comprehensive utilization of mineral resources has just been completed, which aims to promote and guide mining enterprises to adopt advanced technologies to improve the efficiency of mineral resources and to improve ecological civilization construction”, said Yu.

Currently, low technology transfer and penetration, poor access to information, small investment in R$D and small application scale as well as insufficient commitment of companies hindered the application and dissemination of advanced technologies. It also indicated that China is in urgent need to accelerate the promotion and application of advanced technologies,Yu noted.

Mr. Feng Ansheng, director of Zhengzhou Institute of mineral comprehensive utilization at CGS, said that China’s s coal resources exploitation are mainly based on underground mining. It held high energy consumption despite its high recovery rate  beyond 80% which is far beyond many developed countries, due to its focus on low value-added products, such as L2,L3 and L4 products.

Though a great progress in utilization of associated minerals has been made, China still faced challenges including improving the utilization efficiency of waste rock and mineral tailings and the quality of gold mine.

Information technology was efficient for resources conservation and intensive utilization, but some mining companies in China encountered many problems in the application of the technology in recent years, including how to apply the technology to achieve financial integration, centralized procurement, and reduce procurement costs. Thus an integrated model was in need to help these companies to break  development bottlenecks.

Mr. Wang Huili proposed that it is important for mining groups to clearly define duties of the whole group and each business department as most mining companies in China are big groups with various businesses covering mines exploitation, smelting, processing and mechanics. In the process of information technology application, some groups and its business departments weren’t clear about each others’ duties and responsibilities thus caused messes. So groups and other business departments should be clearly defined and separated with duties and roles.

Madam Ma Ailing, chief engineer of Beijing SD Science & Technology Development Co., Ltd. pointed out while some factors could be easily learned and managed in the mining process,, some factors couldn’t not, such as the evaluation of invisible and intangible mineral reserves. “It is difficult to make a evaluation on reserves and comprehensive utilization of mineral resources because it concerns both the amount and the division of resources reserves and it is very difficult to define the division.”, said Ma.

Mineral resources was the core of the whole mining chain, and a rational evaluation on mineral reserves was of vital importance to the exploitation and utilization of mineral resources. Only with a rational evaluation, was it possible to get aware of mineral resources comprehensively and objectively thus to carry out more effective macro-management regulation. It was in contradiction with exploration requirements that most mining companies expected to gain maximum return with minimal investment. To solve the problem, advanced techniques and methods should be adopted for scientific exploration and for comprehensive and reasonable mineral reserves evaluation.

“Reserves calculation and industrial index are inseparable but industrial index are based on market and mining companies.” said Ma Ailing, “It is in need to further verify the reasonableness of current industrial index. In additional, a comprehensive evaluation on associated minerals should also be taken account of in the reserves calculation, as associated minerals are scarce minerals and inadequate exploration may directly adversely affect the following comprehensive utilization of mineral resources.”

Solutions: Advanced Technologies

Yu Haifeng noted that widespread application of advanced technology is a fundamental way to realize rational and efficient exploitation and utilization of resources. It was also an importance measure to carry out innovation-driven development strategies thus to accelerate the transformation of mining industry. Thanks to mining workers and researchers, China had developed a batch of advanced technologies in the exploitation and comprehensive utilization of oil, gas, coal, metals and other important mineral resources in recent years and emerged a number of enterprises excel at advanced technology research and development. These achievements had contributed to the utilization and efficiency of mineral resources.

“The essence of revitalizing resources through technology mainly refers to the reuse of low-grade minerals and there are a number of demonstration sites and companies, such as the Zijin Mining Group ”said He Bingqing. He further explained that China is rich in various and rich mineral tailings and it has great potential to make comprehensive utilization of them. Recently, it had seen a growing momentum for comprehensive utilization of mineral tailings. There were two reasons: firstly,   materials for recycling were expanded due to advanced technologies; secondly, growing land imposition cost urged companies to reduce tailings emission as tailings dams covers a large amount of land.

In additional, with the fast upgrading of products, the life cycle of a product had been shorten just to a decade, which provided great opportunity for secondary metal recycling. The scrap metal recycling would help to reduce the consumption of new mineral resources. And with the recycling of “urban mines”, China had ushered in a new era of resources recycling.

It is also the national strategy to develop advanced mining technologies, said He Fayu, deputy general manager of Science & Technology Management Dept of China Minmetals Corporation.“Ways for the separation of lead and zinc in China can be divided into selective flotation, bulk flotation and combined process and bulk flotation are generally adopted. The comprehensive utilization of lead and zinc tailings and safe disposal are similar to other most metal tailings in China. “He said, “The recent 30 years has witnessed the great progress of our lead-zinc separation technologies, mining recovery and resources comprehensive utilization. Though Chinese enterprises who begin develop overseas lead and zinc minerals are left with low-grade lead and zinc resources as global mining giants have taken up high-grade ones, our advanced lead and zinc mining technologies can fully support their overseas business.”

Most of China`s mineral resources were underground minerals. With the development of large-scale blasting mining technology, new advanced technologies had taken place of outdated technologies and great progress had been made in large-diameter hole and ground pressure monitoring. New technologies would focus on the combination of mining and separation.

At the same time, technical standards for comprehensive utilization of mineral resources had been improved and further strengthened mineral evaluation. The 22 regulations covering energy, non-ferrous metal, ferrous metal and nonmetallic ores issued by Ministry of Land and Resources marked the initial development of China’s major mineral resources system and laid technical basis for further supervision of national mineral resources.  

Technical Indicators and Methods for comprehensive utilization of Mineral Resources issued by Ministry of Land and Resources in March,2015 provided technical manual and guidance for comprehensive evaluation on energy conservation and comprehensive utilization in China. Demonstration sites had also been established. In 2011, the Ministry had initiated the construction of 40 mineral resources sites of mineral resources comprehensive utilization. By the end of 2014, investment from central government had reached RMB15 billion and investment from enterprises reached nearly RMB1 trillion. Nowadays, the demonstration sites has achieved great breakthrough in comprehensive utilization technologies and developed a series new energy conservation models. As estimated by the Ministry of Land and Resources, these demonstration sites had achieved great breakthrough in 8 major technologies and developed 9 new energy exploration and industry development models, successfully advanced the upgrading and transformation of mining industry in China.

He Bingqing proposed that government should also take measures to accelerate and advance the mineral resources conservation and intensive utilization. Measures to promote advanced technology application, standard construction, supervision and management as well as other incentive measures should be taken to lead and encourage enterprises to participate in and play their roles in the market and to strengthen international cooperation, so as to improve our mineral resources conservation and intensive utilization to a new level. ( Liu Aiying)

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises. For more information about CHINA MINING, please visit: www.chinaminingtj.org.

Over 1000 1: 50000 regional geological maps firstly available on CGS website

Source: www.zgkyb.com   Citation: www.agkyb.com  Date: October 26, 2015

In CHINA MINING 2015, delegates were cheered by China Geological Survey’s announcement that it would release more than 1000 1: 50000 regional geological maps in batches on its official website to provide online service for public. It was China’s first release of such a scale geological maps. 

As one part of China’s nationwide basic geological works, the 1: 50000 regional geological survey works aimed to investigate basic information of mineral,stratum, structure, magmatic rocks in the region and paved way for geological prospecting.

A batch of geological survey results and geological service information was published by China Geological Survey at the conference. 110,000 geological data service catalogs about mineral resource potential evaluation and basic geological information of each province and 93 latest marine basic geological maps were firstly published. Geological drilling database published online was expanded to 400,000 on the basis of 50,000 released last year.

Officers of China Geological Survey indicated that the 1: 50000 regional geological online map and 40,0000 important geological drilling data released online was a combination of Internet and geology. It made a big breakthrough in proving medium and large scale maps online. They wereChina Geological Survey’s major measures to share and make efficient use of geological information as well as to improve its public service capacity.

It is China Geological Survey’ responsibility to arrange and carry out unified, basic, strategic geological and mineral explorations for the public and provide geological information services. Amid the new normal state of China’s economy, China Geological Survey Laid more emphasis on geological information service and would continue to enlarge its service content, expand the scope of information service, extend service level and provide a coordinated online and offline service.

During the conference, attendance could obtain and store geological data catalogs about minerals potential evaluation and basic geological information of each province and latest marine basic geological maps via CD-ROM or U disk and may apply to National Geological Archives for more detailed data. The official website (www.cgs.gov.cn)of  China Geological Survey provided online searching, browsing and downloading services.( Written by Zhangli / Liu Ya)

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises. For more information about CHINA MINING, please visit: www.chinaminingtj.org.

Four overseas mining acquisition funds jointly established

Source: www.zgkyb.com  Citation:www.agkyb.com  Date: October 26, 2015

CHINA MINING 2015 witnessed the establishment of three mining funds and signing of a series strategic cooperation agreements by mining giants including Beijing International Mining City, Beijing International Mining Exchange, Sprott Group and Shandong Zhaojin Group. Mr. Zhong Ziran, Director of China Geological Survey, attended the signing ceremony.

The International Mining Value Discovery Fund was jointly initiated by Shandong Zhaojin Group, Sprott Group and Beijing International Mining City to mainly invest in precious metals in countries including Canada, the United States and Australia and securities of listed company relating with non-ferrous metal minerals.

BMZJ (Beijing Mining City and Zhaojin Group) Short-term Mining Financing Fund was jointly initiated by Zhaojin Resources, a subsidy of Zhaojin Group, Beijing International Mining Exchange and Beijing International Mining City Capital Management, a unit of Beijing International Mining City. With a total fund of RMB 5billion, the Fund focused on providing short-term financing backed by mining right, equity or asset, to domestic mining companies that own high quality asset and are in need of financing but are not capable for bank loan.

ZJSH(Zhaojin-Shenghua) Overseas Resources Acquisitions Fund was jointly initiated by Zhaojin Resources and Shenghua Capital Management, one of Beijing International Mining City’s capital operating platforms. With a planned scale of $5billion, the fund had raised its first asset of $500million. The fund would focus on overseas non-ferrous metal and precious metal mineral projects and companies. Coordinating with other funds of the two companies, it would take advantage of the sluggish mining industry and make mergers and acquisitions of overseas high-quality mining projects as well as provide asset for domestic mining companies to make overseas mergers and acquisitions.

Zhong Ziran indicated that China is not only a big source of demand for mineral resources but also a big investor now. He affirmed the cooperation model between Sprott Group and Beijing International Mining City and welcomed foreign mining-oriented capital management companies like Sprott Group to establish long-term strategic partnership of mutual trust with China’s mining companies and to boost China`s economic growth and help China’s mining companies to expand business overseas. 

Mr. Peter Grosskopf, CEO of Canadian Sprott Group, proposed that Sprott Group would be happy to make open cooperation and establish long-term strategic partnership of mutual trust with China’s mining industries.(Liu Aiying / Pei Lei)

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises. For more information about CHINA MINING, please visit: www.chinaminingtj.org.

Ministers from ten countries and regions presented at the CHINA MINING 2015

Source: www.zgkyb.com   Citation: www.agkyb.com  Date: October 26, 2015

The Mining Ministers Forum was held by Mr. Wangmin, vice minister of the Ministry of Land and Resources, PRC, at Tianjin Meijiang Convention and Exhibition Center on the morning of Oct 22, 2015. Mining ministers and vice ministers from 10 countries and regions delivered speeches at the forum, introduced mineral resources situation, mining policies and investment advantages of each country and region and made analysis on the current features and development trends of the mining industry.

The Hon. Mr. AtoTolesa Shagi Moty, State Minister for Mines of Ethiopia, was the first one delivered the speech. He stated that Ethiopia is rich in mineral resources and they are the basis of industry development. “Gold is the major source of foreign exchange for Ethiopia. In the south Ethiopia, the annually exported gold ores reaches 5tons and there are also some exploitation projects in the north and west Ethiopia where is famous for its well- developed phosphorus resource. While the east Ethiopia is rich in mineral resources, most of the region is yet to be exploited.” He said.

Other delegates also introduced the mineral situation in each state and region. Fairly stable political system and sound mining legal system as well as well-implemented mineral laws consists of advantages of Eritrea and which benefit the cooperation between stakeholders. Besides, most regions in Eritrea are yet to be exploited. There are abundant ruby and sapphire deposits in Greenland. And in the south Greenland, there are two large rare earth mineral areas which are applying for exploitation license. Iron ores, coal mines, vanadium ores, zinc ores, tungsten ores, niobium ores and other mineral resources are widely spread in Greenland. The mining industry accounts for the bulk of Peru economy, with the proportion topped 57%. Peru is rich in lead and zinc ores, tin ores cooper ores and silver ores and its foreign investment in 2013 topped at $9.7 billion,$1.1 billion more than that of 2014.Advocating the sustainable development of mining industry, government of Peru has carried out polices about environmental protection, environmental assessment, environmental risks and provide preferential tax policies so as to encourage foreign investors to fulfill the commitment and protect the environment. 

Wang Min said, 10 countries and regions had created favorable conditions for global mining investment and cooperation. The success of the forum embodied our desire for and confidence in deepen communication and cooperation and indicated the great potential and prospects of international mining cooperation.(Liu Aiying)

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises. For more information about CHINA MINING, please visit: www.chinaminingtj.org.

The slowdown mining industry amid China’s New Normal Economy
---Experts’ views on mining industry prospect

Source: www.zgkyb.com   Citation: www.agkyb.com  Date: October 26, 2015

On Oct 21, 2015, the 17th CHINA MINING Congress and Expo was held in Tianjin. In the afternoon, just after the open ceremony, it drizzled in the rustling and howling autumn wind just as been deliberately arranged, which seemed to make the current sluggish mining market more “chilly”.  

As the theme of the conference, “New Normal, New Opportunities, New Development” is a series of progressive wishes and hope despite of pessimistic market views, which evidently showed the organizer’s intentions and wishes about the conference.

Undoubtedly, China’s economy outlook had become the focal point of the conference, at least no one would expect to see a sluggish China. It is for certain that the new normal economic transformation of China who had once shouldered the rigid demands of the global mining industry, had struck the sensitive nerves of global mining industry.

Mr. Jiang Daming, minister of China Land and Resources, pointed out at the opening ceremony that at present, the global economy recovery lacked drive, investment declined, market volatility had exacerbated and the downward pressure was growing.

“In face of the complicate surroundings, we should be more determined and take concerted effort to encounter difficulties than any time before.” Wang said, “We should work in concert to discover the growth potentials, development opportunities and cooperation of global mining industries and advance the recovery and sound development of mining industry with greater determination and courage.” 

Jiang Daming noted that with continued development of economic globalization, world multi-polarization and social informatization, it is our common goal and obligation to build a sustained and robust, inclusive, future-oriented global mining industry.

Jiang said,with the support of good long-term economic fundamentals, China’s mining industry and the global mining industry still have great development potential. With a growing demand for new energy, new materials because of the coming global new industrial revolution, the global economic transformation will bring in more opportunities for mining industry. 

However, authorities’ great confidence about the future of mining industry failed to dispel doubts in the field.

Mr. Chen Jinghei, chairman of Zijin Mining Group Co., Ltd. stated that New Normal has become one of the highest frequency word on internet and medias, which also indicated that it has become the market consensus that China had entered the new normal state. It is the current features of China’s economy.

“It is unrealistic to expect the price of mineral product to return to the track of rapid increases.” Chen said, “Instead, I think the price of mineral products in the future 3 to 5 years will fluctuate around current level, some many continue to decrease. It is possible for the price to go upside but it will never reproduce the past "golden decade".”

According to Mr. Wang jionghui, assistant president and general manager of Mineral Resources Department at China Minmetals Corporation, metal mineral industry was experiencing severe challenges. Mining industry was closely related to macroeconomic performance. As the weak economic growth of China and other emerging economies, volatility of current capital market and expected strengthening Fed rate hike, most major mining investors and companies were worried about the prospect and made a fairly pessimistic judgment about the mining market in the following 3to 5 years. Some held that along with further declining demand for minerals, the price would continue to decrease and metal industry would in face of deep-seated readjustment. Some agencies even believed that it is the harbinger of a new round economic crisis.

Experts indicated that while large mining enterprises may avoid risks by reducing costs or diversifying businesses in the following one or two years, it is inevitable for small and medium mining to experience a brutal surviving competition. Besides, it is useless and harmful to the price return of commodities to maintain high production amid a lack of evident demand recovery.

“Currently, global mining industry continues to downturn and lacks of good signs” said Mr. Si Xinbo, deputy general manager of Silk Road Fund. As the global economy slowed  down and the oil price hit a 5-year low, resulting in a continuing decline price of commodities, global mining industry is encountering the most sever challenges after 2008 economic crisis.

“With a surplus supply of mineral raw materials and processed product, minerals, mining assets and mining companies are in face of price crisis. ”Si Xinbo said bluntly,   and there wouldn’t be any turnaround in the mining industry in the short term.

According to the report released by PwC ( Pricewaterhouse Coopers), in 2014, the top 40 global mining companies had lost $15.6 billion of their market value, and their market value decreased 16% than last year.

Nevertheless, BHP Billiton, Rio Tinto, Vale and other global mining giants refused to cut back production. And CVRD, one of the three iron ore giants in the world, announced that the company’s production would reach 88.2 million tons in the third quarter, hitting the highest single-season production of the company.

Mr. Kenneth Hoffman, director of Bloomberg Global Metals and Mining Research, stated that during 1980-1990, when commodity prices declined over 20%,mining companies would reduce capital expenditures and production, even reduce by 60% to 90% sometimes, to rebound commodity prices. However, the commodity price has fall into downturn for nearly 5 years currently, yet few mineral giants has taken any action except Glencore who declared to cut down production recently.

Some large companies worried that they would suffer huge loss if the commodities market rebounded when they cut down production. Some agencies attributed the no-reduce policy to diversified business. Hoffman said, most large companies choose to reduce cost on management so as to eliminate small companies that troubled by high cost.

It would undermine the market, said Hoffman, the iron ore price has fallen over 70%, from $190 in 2011 to about $44 per ton now. If the fall continues, it will be difficult for commodity market to rebound. The mineral price fall will also lead to reduces in geological prospecting investment, adding difficulties to metal exploitation in following years.

Currently, China accounted for 40% to 50% of total global demand for commodities. Delegates were still optimistic about China`s economy and its long-term market demand despite the negative impact of china’s slowdown economic on steel commodities and common metal demand. Madam PATRICIA M. MOHR, vice-president of Scotiabank and economics & commodity market specialist, pointed out that China would still be the leading power of global commodity market, which can be indicated simply from differences of the number of vehicles per 1000 people in China and other countries including the U.S. and Canada.

Is China in the new normal state a good mining investment prospect? Is global mining industry facing its “severe winter”? How long will the “severe winter” of mining industry last?

Mr. Wang Jiahua, vice standing president of China Mining Association, didn’t agree with the idea that global mining is in “severe winter”. He said that china’s economy is under reform and in a “shift period”, but it will still be the biggest supporter to global mining industry. Its demand for resources would be stable and in rapid growth.

Wang said he would prefer to compare the current period to fall, as fall is a season of harvest.“It is true that the “golden years” of mining industry when global mining companies can easily make money has gone, and now mining companies has to carry out reforms and improve productivity. But it is a bit hasty to judge that the global mining has entered “severe winter period”.” Wang noted. Instead, he believed that global mining industry is undergoing a new round of reform and transformation. Technical innovation and improving productivity would be the focuses for mining companies.

During the process, Wang said, global mining industry would be closely linked, especially the cooperation with China and it is time to establish a new mining order now. The international cooperation along the Silk Road Economic Belt and the 21st-century Maritime Silk Road initiated by China would have a significant impact on global mining industry.

Mr. Wang Jingbin, president of Beijing Institute of Geology for Mineral Resources（BIGM), indicated that the current short-term overcapacity and low price of mining product were mainly affected by sluggish demand as a result of slow global economic recovery. In the long-run, the minerals would be in a fluctuated uptrend and mining industry would still have a good prospect.

At present, world’s major minerals wilted and international oil prices was in a fluctuated uptrend and showed signs of stabilization after its sharp fall in 2014. With copper, nickle and tin’s price continued to drop and lead, zinc, aluminum price was relatively stable, prices of main precious metal and bulk metal was capped nearly at average cost of global production lines. Asserious shortage of investment in resources exploration in current years and mines were cutting down production, there were few breakthrough and discoveries.

“In this case, it is reasonable that prices will pick up as a result of future resource shortages. In addition, quantitative easing carried in worldwide recently may also lead to price upswing of commodities including minerals”, Wang added.

“Currently, there are more opportunities in overseas markets as international mines shrunk heavier than domestic ones and it would easier for acquisition.” Mr. Liu Yuchuan, chairman of Beijing International Mining City, stated. Liu pointed out that it would be a rare opportunity for Chinese enterprises to invest now as international mining price reached the lowest, many international mining companies’ value plummeted and capital chain ruptured and was in urgent need of foreign investment.

Mr.Wang Side, vice president of Chinalco Resources Corporation indicated that mining companies has shrunk dramatically now, with the average decline rate of western companies in 5 years reaching 60% and China-invested at 80%. Most companies would have to sell assets when they fell in difficulties. Various signs had showed that it is a good opportunity to invest in mining and the following 2 to 3 years would be a perfect period.

However, Mr. Wang weiping, director of Sinomine Resources Exploration Co., Ltd. reminded that blind acquisitions isn’t acceptable, China’s companies should make clear of their development strategic positioning and assess whether it can adopt to overseas market on the basis of its core competitiveness before investment. Once decided to invest overseas, strategic direction and objectives should be set, Wang suggested. 

Driven by adjustments of global manufacturing pattern and a new round of manufacturing infrastructure, the following 2 to 3 years would be a new opportunity for global mining industry, but it would be unlikely to reach or exceed last peak, according to experts and scholars.( Li Ping)

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises. For more information about CHINA MINING, please visit: www.chinaminingtj.org.

The basic role of public geological survey highlighted
---A review of the 1st Geological Survey Directors Forum

Source: www.zgkyb.com   Citation: www.agkyb.com  Date: October 26, 2015

The Geological Survey Directors Forum was firstly been included on the agenda and became the highlights of CHINA MINING Congress & Expo 2015. The Geological Survey Directors Forum, along with the Mining Ministers Forum and the Mining Development Summit Forum, had become three high-level forums for government, public service agencies and mining companies.

Mr. Wang Yan, deputy director of China Geological Survey and the host of the forum said that amid the sluggish mining industry in recent years, the establishment of the forum highlighted the significance of basic geological survey.

Directors of Geological Survey from 10 countries and regions had introduced mining exploration and the latest information of each Geological Survey, and discussed the vision and progress of international geological cooperation under the new circumstance.

Madam Susana Gladis Vilca Achata, the President of Institute of Geology and Mineral Metallurgical (INGEMMET) of Peru, introduced the situation of Peru in the forum. He said that the Geological, Mining and Metallurgical is carrying out the mineral mapping project nationwide and updating the metallogenic map in scales of 1:50000 and 1:100000 and in different versions including Chinese, English, Spanish and so on. Besides, domestic explorations has been accomplished in important regions and chemical analyses has been made on mine samples to establish a database that is free and public to the world. According to the database, it shows that only 1% of Peru’s mineral resources has been effectively utilized and the future development of mining industry in Peru has great potential.

Mr. Kyaw Din, Deputy Director of Geological Survey and Mineral Exploration Bureau of Myanmar, introduced the situation of Myanmar in the forum. He said that in Myanmar, reforms of the current mining law has accomplished and amendments has been tabled in Parliament and will soon been announced.“The new law aims to ease restrictions on investors and encourage more domestic and foreign investors to invest in mineral exploration, mining and production. It is also a good chance for foreign investors as foreign investment policy is an important part of the government’s policies in economic restructuring and development currently.” said Kyaw Din.

Mr. Tawsaporn Nuchanong, Deputy Director of Mineral Resources Bureau of Thailand, introduced the situation of Thailand in the forum. “Mineral sustainable development is on the top agenda of the government and geological mapping and fieldwork has been done to collect data and information for efficient resources management. The effort will not only boost the economy of Thailand but will also helps reduce investment risks. Meanwhile, the government is on a trial to make use of the data in tourism. A new law --Fossil Law--has been issued in order to protect a large number of fossil resources found in Thailand.” he said.

Mr. Hezareh Mjhammadreza Aliakbar, Deputy Director of Geological Survey Bureau of Iran, introduced the situation of Iran in the forum. He explained that Institutes of IUGS( International Union of Geological Sciences), CGMW (Commission for the Geological Map of the Middle East) and IGCP( International Geosciences’ Program) in Iran has made conducive cooperation with Asian countries. Iran Geological Survey and Mineral Exploration mainly engages in global map drawing, map drawing of Middle East and other regions and its projects accounted for 25% of the total CGMW projects.Currently,about190 map drawing projects affiliated with technical engineering researches, are carried out in Central Asia, Africa and Latin America, of which 48% projects are in Latin America and 38% in Central Asia.

Mr. Yousif Elsamani, Director of Sudan Geological Survey of Sudan, introduced the situation of Sudan in the forum:10 of total 170 mining companies in Sudan havestarted their production and others are in different stages of mineral exploration. Under the stable political system and policies, Sudan is updating laws and regulations, streamlining review and approval system to build a Sudan that is more transparent and equal-footed.

Mr. Yusuf Ziya Cosar, Director of Administration of Mineral Survey and Exploration of Turkey, introduced the situation of Turkey in the forum: the Mineral Research & Exploration of Turkey is in charge of mineral research and survey as well as exploitation. This year, Turkey has carried out seismic studies, coming out with three-dimensional seismic maps. Comprehensive explorations will be implemented in 2016. 

Mr. Kevin Faure, Director of Geological Resources Division, GNS Science, New Zealand, introduced the situation of New Zealand in the forum. He said that New Zealand has a history of 150 years of geological research, even longer than that of the oldest university in the country. “As a member of GNS, I think we should have a forward-looking vision to predict the development of mining industry in 30 to 50 years, not just about the following 2 or3 years. Considering the mineral resources on the land will be gradually fully developed and most territory of New Zealand are under water, we will take marine minerals as our priority in the future”, Kevin Faure noted.

Mr. J.A.DUODU, Director of Geological Survey the Bureau of Ghana, introduced the situation of Ghana in the forum. In cooperation with IUGS (International Union of Geological Sciences) and GSAf (Geological Society of Africa), Ghana had carried out exploration and surveys in major basins, hoping to provide geological information to companies that are interested in investing in Ghana. J.A.DUODU said, “We hope we can receive stronger support and help from other countries so as to provide better data and information to the world.”

Mr. RASOLOMANANA EddyH, Chief Engineer of Department of Mineral and Petroleum, Madagascar, stated that vast mineral resources have been found in Madagascar and require systematic exploration. Thus, Madagascar would sign a memorandum of cooperation with China Geological Survey and initiate the geological mapping and exploration in 2016.

Wang Yan, deputy director of China Geological Survey, indicated that China has actively carried out international cooperation in geological survey in recent years.“We have signed over 1000 memorandums of cooperation and project cooperation  agreements with other countries and exchanged our survey technologies and experience with our partners, which not only helps improve the Geological Survey of our partners but also advances the sustainable development of mining industry in China and other countries. In the future, we will continue to increase international cooperation in the field, strengthen communications and cooperation with other geological survey agencies, establish cooperation platform and to strive for successful cooperation” said Wang. (Wu Yijun)

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises. For more information about CHINA MINING, please visit: www.chinaminingtj.org.

Interpretation of China Mineral Resources Report (2015)

Source: www.mlr.gov.cn    Citation: www.gtzyb.com     Date: October 24, 2015

The newly issued China Mineral Resources Report (2015) provides an outlook window for observing China’s mineral resources situation. In general, over the past year China’s prospecting breakthrough strategic action continued to advance, mineral resource base was further strengthened; the mineral resources situation is consistent with the steady growth and restructuring process; streamlining administration and delegating powers further activated the mineral resources market; economical and intensive use of mineral resources and the promotion of the ecological construction reached to a new level; and progress was made in international cooperation of geology and mineral resources after following up to the strategy of “One Belt and One Road”.　

Supply and demand of mineral resources was profoundly changed.

At present, the global economic recovery is slow, economy in China has entered into the New Normal, demand for energy mineral resources fell to a certain degree, but the situation that high external dependency of bulk mineral remain unchanged.

Over the past year, we have advanced the prospecting breakthrough strategic action, strengthened exploration efforts in oil and gas resources, the national scarce minerals and the emerging industry of minerals, and strengthened the prospecting target and effectiveness. In 2014, geological prospecting investment has maintained a higher level of 114.5 billion yuan, and newly discovered large and medium-sized mines reached 249. Important mineral resources, such as coal, oil, natural gas, shale gas, manganese, bauxite, copper, lead, zinc, gold had new batches of resources.

Taking oil and gas resources as an example, in 2014, the newly proven geological reserves of oil was 1.06 billion tons, which was the eighth consecutive year more than 1 billion tons; the newly proven geological reserves of natural gas was 943.8 billion cubic meters which was the 13th year more than 500 billion cubic meters. Notably, the newly proven geological reserves of the shale gas in 2014 was 106.8 billion cubic meters which submitted verified geological reserves for the first time after being set as a new kind of minerals in 2011. By the end of 2014, investment of the shale gas exploration had exceeded 23 billion yuan, forming a production capacity of 1.3 billion cubic meters. Shale gas development basically reached conditions of large-scale commercial development. There were experts expected that annual output of shale gas by 2020 will reach 30 billion cubic meters, accounting for about 15% of domestic natural gas. In addition, from the potential of oil and gas mineral resources, China`s potential of natural gas resource is greater than the oil. China will enter into a stage that reserves and production of natural gas grows rapidly.

In response to the rapid growth of mineral resources demand related to the new and high technology industries, survey of new energy and materials mineral achieved remarkable achievements in 2014. For example, the newly geological reserves of lithium outside Jiajika of Sichuan Province were 640,000 tons which was hyper scale, laying a resource foundation for creating the new energy industry base in western Sichuan Province.

The mineral resources situation has entered into the period of adjustment.

In 2014, in general the commodity production in China remained growed, but the growth rate apparently fell, production of raw materials related to the construction of infrastructure, such as crude steel grew slow which was highly consistent with the trend of economic transition and structural adjustment.

Although in 2014 the growth of investment in fixed assets in mining industry remained grow, the growth rate fell by 10.2%, which was the lowest during the recent 12 years. The proportion of mining investment in fixed assets for investment in fixed assets fell to 2.9%, decreasing by 0.5%. Statistically, over the past year, the mining industry has experienced the peak value and a turning point. By the end of the first half of 2015, mining fixed assets investment will be 526.05 billion yuan, falling by 7.7%. In addition to the sustaining wearying of coal industry, investment in oil and gas industry was 116.895 billion yuan, falling 6.5%, ferrous metal was 65.581 billion yuan with falling of 12.8% and non-ferrous metal was 62.892 billion yuan, falling 5.7%.

Therefore, the influence of excess capacity is still in conduction After entering the New Normal, labor pained of structure adjustment is still in the diffusion. In the foreseeable short term, this is difficult to change and mining economy are moving into the depth adjustment.

However, heat loss of mineral development has freed up space and energy for mineral resource management regulations, ecological construction and administration streamlining and power delegation. We should recognize that these aspects will continue to enhance the activity and the endogenous power of the mineral resource market.

Streamlining administration and delegating powers promote market-oriented reform of mining field.

In 2014, the mineral resources management carried out administration streamlining and power delegation, converting from administrative-oriented means to the integrated use of multiple management means, further improving the social service level in order to help with market-oriented reform, optimize the investment environment, and finally help the mining industry transformation and upgrading.

In 2014, China improved mineral resource management policies, revised the administrative regulations, such as the registration of mineral resources exploration areas, mining registration and transfer management of mineral exploration right and mining right, published Geological Environment Monitoring and Management Measures and Land and Resources Administrative Punishment Measures, and canceled 23 executive and non-executive approval matters related to mineral resources.　

Since December 1, 2014, mineral resources compensation fee rate of coal, crude oil, natural gas fell to zero in China, China implement the coal resource tax reform AD valorem duty, cleaning up the related charge fund and implementing the AD valorem duty method on rate of duty. The applicable tax rate of Crude oil and natural gas resource tax increased from 5% to 6%.

In the aspect of mining right management, we cancelled “the application of pausing to accept the new coal exploration right”, orderly delivering new coal exploration right; stopped delivering the control quota of total amount of ore mining; adjusted “management policy of pausing to accept the new rare earth mining right ”, allowing a new rare earth mineral exploration right and mining right to large rare earth enterprise groups.

The policy adjustment above will make the market play a decisive role in the allocation of resources, better give play to the role of the government, further activate the market, gather momentum for steady growth, and pave the way for restructuring in order to healthily and orderly access to economic rise in the future.

Green mining results illuminate the ecological civilization construction.

Construction of ecological civilization concerns national future, the structure of energy and resources utilization, and the economical and intensive utilization of mineral resources is continuously contribute to the construction of ecological land.

Energy structure in China continues to improve. It is reported that proportion of the total energy consumption of coal in our country in 2014 dropped to 66%, proportion of clean energy, such as hydropower, wind power, nuclear power, natural gas increased to 16.9%, basically close to the goal of "twelfth five-year" in China`s energy structure adjustment.

In 2014, China released the first comprehensive utilization evaluation standard  of mineral resources, namely Mineral Resources Comprehensive Utilization Technique Index and Its Calculation Method, released for three consecutive years a total of 20 minerals mining’s index requirements of mining recovery rate, concentration recovery rate and comprehensive utilization rate, preliminarily formed main minerals’ mineral resources saving and comprehensive utilization of the evaluation index, promoted a total of 159 advanced suitable technologies. 

The achievement of the construction of green mining was remarkable. By the end of 2014, fund used in the mine geological environment governance reached 90.18 billion yuan in China, accumulated damaged in land caused by mineral development reached 3.03 million hectares with restoring the land area of 810000 hectares which made the governance rate surpassed a quarter.

661 mining enterprises become the national green pilot units, achieving job objectives that by the end of the 12th five-year national pilot mining amounted to more than 600. Mine geological environment investigation and monitoring have also made some progress, China completed survey area of 12.5 square kilometers, surveyed more than 110000 mines, realizing a complete coverage of remote sensing monitoring in mines.

“One Belt and One Road” expanded international cooperation in mineral resources.

In 2014, around national strategies such as "One Belt And One Road", international cooperation in geological mining areas were steadily promoted.

China successfully held the 5th Mining Minister Meeting of APEC, CHINA MINING 2014 and 2014 China-Asian Mining Cooperation Forum, held China (Changsha) International Mineral Gem Expo, expanding and improving the influence and power in the international mining industry.

International cooperation provides effective support for Chinese enterprises to go out. Mineral resources cooperation between China and the United States, Argentina, Chile and Mexico was included into the overall bilateral cooperation framework. We have strengthened co-operation with the United States in development and exploration of shale gas and jointly held the Sustainable Development Forum of Unconventional Oil and Gas Resources. We have reinforced cooperation with traditional mining countries, such as Canada, Australia, Russia and South Africa, formed a series of science and technology achievements in improving the inter-ministerial dialogue and cooperation mechanism, promoting mining investment and economic and trade cooperation, and strengthening science, technological and information communication. We have expanded co-operations with the emerging economies, such as central Asia, southeast Asia, Latin America and Africa, reached cooperation intention with Uzbekistan, Kazakhstan, Indonesia and Poland in shale gas development and utilization, geochemical survey and geological data sharing.

We founded in 2014 China - Shanghai Cooperation Organization Geological Research Center of Ministry of Land and Resources which created an important platform for the Shanghai Cooperation Organization members to strengthen geological cooperation, newly built 6 national database, which provided service for 107 mining enterprises and the geological exploration units to cooperatively develop the geochemical mapping with 16 countries, such as Tajikistan and Mongolia.

At present, the international environment is complicated, the world economy is still in the period of deep adjustment, our economy is running smoothly in a reasonable range, but the economic downward pressure continues to increase and multiple difficulties and contradictions interwoven with each other. With the pressing situation, the government and the market main body should actively adjust the direction and layout, grasp the opportunities and challenges under the New Normal, give full play of the supportive effect to steady growth, structural adjustment, livelihood benefit. ( Qiao Siwei, Li Xiang and Cheng Xiujuan)

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises. For more information about CHINA MINING, please visit: www.chinaminingtj.org.