To meet challenges with concerted efforts and cooperation for sustainable prosperity and steady development of mining industry
---Speech on the 13th China Mining delivered by Wang Min, vice minister of Land and Resources and director of China Geological Survey
Source: Portal Website of Ministry of Land and Resources Citation: Portal Website of Ministry of Land and resources Date: November 6, 2011
Respected Guests, Ladies and Gentlemen,
The world economic recovery is facing opportunities and challenges when entering the second decade of the 21st century. 2011 China Mining will focus on “strengthening international cooperation and accelerating geological exploration & mine development”, expressing to the international mining world our wishes to ensure sustainable prosperity and steady development of the mining industry based on mine exploration, and reflecting our common expectation of promoting strong and sound growth of the industry.
Since the start of this year, China’s economic growth has continued to develop as what macro control expects, maintaining good momentum for development. Particularly, mining industry provides important support for our economic and social development.
Mining investment keeps growing. In the first three quarters of this year, the investment in mining industry expanded 27.9 percent from a year earlier to 2.60 trillion Yuan, outpacing the 24.9 percent growth in fixed assets. Specifically, the investment in mine exploitation rose 17.3 percent year on year to 754.2 billion Yuan. The coal mining industry investment continued to take the lead with a growth of 24.6 percent on a year-on-year basis ; the petroleum and natural gas extraction investment grew by 1.5 percent from a year earlier; and the other minerals exploitation investment increased steadily. The investment in smelting and processing of both metal and non-metal grew rapidly, especially for the non-ferrous metal.
Prospecting mineral resources goes smoothly. In the first three quarters of this year, our investment in non-oil and gas exploration increased 33.3 percent from a year earlier to 36 billion Yuan. A total of 851 newly transferred mining exploration rights for non-oil and gas mainly centered on such metal mineral resources as gold, copper and iron. The registered areas for non-oil and gas exploration reached 747,000 square kilometers, generally flat with previous years. More than 9,600 minerals exploration projects will drill 10 million meters (up 16 percent year on year). Another 146 fields for coal, iron, copper, tungsten, molybdenum, gold, rare earth and rock phosphate reserves have been found in such provinces as Xinjiang, Hebei, Shandong, Shanxi, Jiangxi, Anhui and Jiangsu. The recoverable large and important mineral deposits still grew rapidly against the backdrop of increasing exploration.
Mining production maintains a steady growth. In the first three quarters of this year, the total planned non-oil and gas exploration edged up 4.6 percent from a year earlier to 14.54 billion tons per year. A total of 3,949 mining rights for non-oil and gas were transferred. China produced 154 million tons of crude oil (up 2.2 percent year on year), 2.691 billion tons of crude coal (up 11.6 percent year on year), 322 million tons of coke (up 13.8 percent year on year), 946 million tons of iron ore (up 24.5 percent year on year), 25.86 million tons of 10 non-ferrous metal (up 11.2 percent year on year), 259 tons of gold (up 4.2 percent year on year), 57.25 million tons of rock phosphate (up 30.6 percent year on year) and 1.51 billion tons of cement (up 18.1 percent year on year). China’s output of large minerals continue to rally from a year earlier, and output of coal, 10 non-ferrous metal and cement taking the lead in the world. And domestic supply for minerals keeps growing.
Mineral prices are stabilizing. China`s minerals prices continued to rise for the first three quarters of this year, and some of them fell back in the third quarter, showing more volatility. The spot price for crude oil in Daqing field averaged US$110.3 per barrel, up 45 percent from a year earlier. The average price for quality coal was lifted 9.9 percent year on year to 783.7 Yuan per ton. The average price for iron ore fell from 1,430 Yuan per ton to the current level of around 1,200 Yuan per ton. The cooper price fell from 70,900 Yuan per ton in early July to 55,900 Yuan per ton at the end of September, with average price of 69,000 Yuan per ton. The aluminum trades in a narrow range of 16,500 Yuan per ton to 17,200 Yuan per ton. The gold price dropped from 390 Yuan per gram in late August to 335 Yuan per gram by the end of September. The factors that push mineral prices up were tamed to some extent with tighter macro control.
Import and export business of minerals is brisk. In the first three quarters of this year, China`s total import and export value of minerals expanded 34.5 percent from a year earlier to US$704.558 billion. Specifically, the import of petroleum rallied 5.2 percent year on year to 219 million tons. The import of coal edged up 1.1 percent from a prior year to 124 million tons, while the import of iron ore rose 11.1 percent year on year to 508 million tons. The import of copper concentrate dropped 6.6 percent from a year earlier to 4.63 million tons, while the import of scrap copper increased 7.6 percent year on year to 3.22 million tons. The alumina import plunged 22.4 percent from a year ago to 3.18 million tons.
Mine environment improved. In 2009, The Ministry of Land and Resources of China promulgated the “Regulations on Mine Geological Environment Protection “to further improve accountability mechanisms and supervision mechanisms for protection and recovery of mine geological environment in the background of market economy. To address the long-standing mine geological environment issues, a project titled "transformation of 100 mines" was implemented for 3 consecutive years in resource-exhausted cities. During the "Eleventh Five-Year" period, the central government had invested RMB 12.9 billion in mine recovery, compared with RMB 50 billion for the corresponding investment from local governments, enterprises and private sector, which boosted the recovery rate to leap to 30%, or even 50% in some areas.
Ladies and gentlemen,
China has stepped on a fast track of industrialization, urbanization and economic growth. In this context, China needs to make breakthrough in mine exploration to ensure resource supply, improve resource utilization by applying sophisticated technologies, and enhance resource efficiency by creating innovative mechanism. China has and will continue implementing a resource-conservation strategy during the 12th Five-Year Plan period. It will fully control the amount of resources to be used, regulate both demand side and supply side, and promote differentiated administration. In this way, China will lift its efficiency in using mineral resources to a new level and improve its capacity to ensure resource supply. The sustainable development of mineral resources will contribute to a sustainable socio-economic development.
First of all, we will fully implement the strategy of accelerating geological exploration & mine development. We will make a balanced use of both domestic and overseas resources and markets, with a firm basis on home market, further ensuring the supply of resources. After years of survey and review, we have a general understanding of our resources and potential. The exploration has become very effective, and the supply is further ensured. Additional resources in Xinjiang, Qinghai, Yunnan and Tibet have been identified and are taking shape. We will accelerate the strategy of geological exploration & mine development, with a focus on key metallogenic regions and mineral types. Geological survey and resource exploration will be strengthened to push for a breakthrough and the building of large mineral resource bases. We will carry out a new exploration mechanism that gives priority to publish interests, focuses on financing support and commercialization, and emphasizes fast progress by coordinated exploration. We will establish a market-oriented working pattern that puts premium on technology, inter-departmental coordination, and systematic integration with enterprises as primary carriers. That said, we will lay emphasis on building a market-oriented exploration mechanism, expanding diversity of investors, and introducing coordinated exploration. On the part of the government, the key responsibility is to administer the basic geological survey and outlook research for key metallogenic regions, manage resources through economic and legal means, and properly leverage the geological exploration funds, resource taxes and resources compensation fees. The government should redouble its efforts to create a favorable environment for the geological exploration. Currently, the Ministry of Land and Resources has set up 47 blocks for strategic and coordinated exploration in 19 metallogenic regions across the country. The ministry has published the Notice on Improving Mining Rights Management for Coordinated Exploration.（No. 55  of the Ministry of Land and Resources） It will complete the review of mining rights proposals oriented towards coordinated exploration areas before year-end, and incrementally offer new mining rights to the market. The strategic campaign of accelerating geological exploration & mine development follows the principles of benefiting the investors and providing rewards to those who find mines. Also, the campaign will focus on preemptive planning, resource integration, and information transparency. The fruits will be shared and benefits will be well distributed. According to above-mentioned, we warmly welcome the active participation of domestic and overseas mining and exploration enterprises.
Second, we should push forward the conservation and comprehensive use of mineral resources. Resource conservation constitutes a basic state policy of China. China’s Ministry of Land and Resources and Ministry of Finance have signed agreements with the People`s Governments of 21 provinces (autonomous regions and municipalities directly under the central government) to boost conservation and comprehensive use of mineral resources. By setting up "demonstration projects" and promoting "demonstration base construction", China provides incentives and guidelines for mining enterprises to better develop mineral resources. Efforts will be made to promote the comprehensive exploration of low-grade, refractory and mixed mineral resources, and advance hi-tech approaches for resource conservation and comprehensive use so as to improve overall development and utilization efficiency. China will create standards for conservation and intensive use of mineral resources, minimum standards for mining exploration, and indices including mining recovery rate, dressing recovery percentage and comprehensive utilization ratio based on mineral types. China will step up efforts to formulate and implement the Administrative Measures for Promoting Mineral Resource Conservation and Comprehensive Utilization.
Third, step up efforts in mining industry restructure and green mine construction. Specific measures include strict implementation of the mineral resources planning, continuous promotion of development and integration of mineral resources, and full implementation of the mining rights planning system. Also, based on the resource situation, geological background, development conditions and market demand, a reasonable set-up and granting of mining rights is necessary to ensure rational distribution of the new mining rights and on-going improvement on existing mining rights. In this way, the root cause of ill-distributed mining rights will be eliminated, which will promote mining restructuring and development mode and enhance the scale and intensiveness of development of mineral resources. In addition, the scope of pilot projects of green mine construction should be further expanded to over 600 demonstration mines within 5 years. Models will be set in the areas of scientific mining methods, efficient use of resources, standardization of enterprise management, environment friendly processes, and ecology-oriented mine environment improvement. Other moves may include perfecting the green mine construction standards, and strictly managing mineral development. Specifically, for new mines, entry management should be conducted in strict accordance with green mine construction standards and for mines in operation, continuous improvement of development and utilization methods should be urged and a deadline for meeting relevant standards will be set. As our target, by 2020, a green mine landscape will have been well formed with large and medium-sized mines meeting green mines standards and small mining enterprises being managed in strict accordance with green mining standards.
Fourth, we will further improve mineral resources management. We will accelerate the reform of mining rights review system, and delineate the rights of central and local authorities. Efforts will be made to reform the system for mining rights allocation. Regulations will be improved for the transfer of mining rights, while competition is encouraged. We will perfect physical markets for mining rights on the provincial level and municipal level. Also, we will explore the possibility of online transfer of mining rights and set up a uniform system of rules on mining rights trading. We will launch unified online identification number for mining rights, making sure the rights transfer information is published and open to the public via online inquiry. Efforts are made to encourage and guide the private investment, and fully open the mining rights market to private investors. We will improve the mining resources pricing system, and exploration interest distribution mechanism. We will overhaul the resource tax system. The State Council has amended the Provisional Regulations of the People`s Republic of China on Resource Tax, adding the “rate on value” principle to the existing fixed-sum tax rate method. The State Council has adjusted the collection methods and resource tax on crude oil and natural gas, and adjusted the standards for resource tax on coking coal and rare earth. Efforts are also stepped up in protection and development management for important mineral resources to maintain mine environment and keep development and utilization of mineral resources in order.
Ladies and gentlemen,
Thanks to efforts by the global community, the world economy still keeps moderate recovery, although the process is not as accelerated as what we expect. It is full of change and uncertainties. Compared with other industries, mining presents a better development prospects.
Global mining market continued to boom. The world demand for petroleum would increase 1 percent a year, and many institutions predict that the demand of the year would be higher than previous year. The output of OPEC oil edged up by months. Russia is likely to set a new record of 500 million tons of annual output for oil, and US oil output rebounded to a recent ten-year high. Some companies predicted that an annual increased production of 100 million tons of coal and iron ore in the next few years can meet the needs of the rising demand. Large multinational enterprises are massively expanding the capacity of iron ore, which may lead to a change in its supply and demand. The growth of demand for copper and aluminum may be above 5 percent and 8 percent respectively. The gold output is estimated to increase 5 percent. Developed countries set strategies revolving around new technology-based minerals. Both EU and US increased their research on availability in raw materials of such new-technology-based minerals as rare earth, cobalt, niobium, tantalum, and indium.
International mineral prices fluctuate around high levels. Commodity price remains high as some countries stick to a loose monetary policy and global liquidity is abundant. The crude oil price shot up in the first four months of this year, and sharply fluctuated from May. US crude oil futures fell almost 30 percent from US$110 per barrel in late April to US$80 per barrel at the end of September. Coal prices remained high, and iron ore price picked up. Such precious metals as gold, silver, platinum, and palladium sharply increased: the prices of gold, silver and platinum were higher than that of pre-financial crisis; and the silver price even grew more than that of gold. Some metal prices, including copper, lead, zinc and nickel fell back.
Global mining investment sustains rapid growth. The global mining industry has bottomed out, with total investment in the projects expanding 21 percent from a year earlier in 2010, and 14 percent from a year earlier in 2009. There were more than 100 new mining investment projects for over US$60 billion in 2010. The investment of non-solid fuel minerals exploration reached US$11.2 billion in 2010, second to that of US$13.8 billion in 2008, recovering from the decrease due to financial crisis in 2009. The investment of global non-solid fuel minerals exploration is expected to hit US$13-14 billion in 2011, which indicates that the global mining is backing on track.
Mining companies accelerate merger and reorganization. In the first half of this year, the trade value for 1,379 global mining merger and acquisition surged 80 percent year on year to US$71 billion Yuan, hitting a record high. Canada, Australia and European countries still play a leading role in the M&A business for coal, iron, copper, gold and potassium. China accounts for low share in overseas mining M&A business, with the trade value falling 18 percent from year earlier to US$4.7 billion. In the second half, the process of global mining M&A slowed down. The trade value and volume declined 32 percent and 19 percent month on month respectively in July, and continued to drop 25 percent and 7 percent in August. The global mining industry continued to turn its focus to the areas located in equator, or even south of the equator. The production and market share for major minerals are dominated by a few companies in the world.
Ladies and gentlemen,
As the world is at a critical stage in its struggle for economic recovery, the robust growth of global mining industry requires industry-wide confidence, intensified cooperation, communication and coordination. We should speed up the pace in building a fair, rational, sound, and stable economic order for the mining industry. Governments worldwide should assume their responsibilities, so should the people from mining, financial and trade industries. We should safeguard the mining investment and the market stability. For that purpose, I’d like to put forward three proposals:
First, we should adopt new philosophy for resource exploration. As is known to all, mineral resources are not only scarce and exhaustible, but also dynamic, systematic, and open. There should be an integration of quantity, quality and ecology. While implementing regulation on a quantity basis, we should improve quality management and ecological protection. We should manage exploration with a philosophy that sees quantity, quality and ecology as an integrated system. Resource conservation, as a priority, should go hand in hand with exploration, so that limited resources can be put into better use. We should stick to market openness, thus realizing optimized resource allocation on a broader basis, and bringing into play the respective regional strength. We should promote fairness, and protect the legitimate rights and interests of resource owners, investors, exploration companies, and the local people. A balance should be struck in protecting the interests of all parties concerned. Moreover, ecological protection should not be left behind. We should shoulder the responsibility of ecological restoration, making sure the mining activity would not damage the environment. We should raise the threshold for market access, selecting eligible and socially responsible companies for mining exploration.
Second, we should deepen pragmatic cooperation in the global mining industry. China’s opening up to the outside world, as a basic state policy, will remain unchanged. China will steadfastly implement mutually beneficial and win-win opening strategy. We should proactively participate in economic globalization and mining cooperation, oppose protectionism, and press ahead with a fair and rational trading and investment system for the global mining industry. Efforts should be made to improve foreign-related mining laws, regulations and policies, making China’s mining investment climate more standardized, transparent, and favorable for investors. We are ready to beef up our overseas mining investment, expand mineral products trading, and guide and support strong and credible domestic mining companies to invest overseas and strengthen cooperation with their international mining counterparts. Governments worldwide should promote dialogue and consultation, policy coordination, mutual investment, and carry out bilateral and multilateral mineral resource cooperation.
Third, we should intensify international technological cooperation in mining industry. Mining exploration is a technology-intensive industry. With the increasing difficulty in mineral prospecting and stricter requirements on exploitation, we should innovate our ideas, techniques, methods and facilities. Efforts should be made to improve inter-governmental technological cooperation mechanism and the cooperative R&D mechanism among mining companies. Centering on innovative R&D for the key and comprehensive use technology in exploration, metallogeny and mineral prospecting, we should further expand our technical force, promote information exchange, and intensify exploration technology collaboration. Efforts should be made to advance hi-tech application in geological exploration and mining development, and bridge the technical gap between various countries. We should also push forward a platform for international technological cooperation in mining exploration. We should draw upon and disseminate each other’s hi-tech approaches by diverse means, including developing key technological cooperation projects, launching earth science programs, holding seminars and training, conducting joint R&D, and setting up cooperation demonstration projects.
Ladies and gentlemen,
In the near future, mineral resources will still be critical to the economic and social development, and mining industry will make much difference to the world economy. In view of China`s socioeconomic development, we stick to the basic principle of "ensuring domestic supply capacity of resources”. We are mobilizing what is available on every front to achieve the goals of "significant progress within three years, major breakthroughs within five years and a brand new landscape for mine exploration and development within eight to ten years" for the campaign of “geological exploration & mine development”. We are convinced that China’s mining industry is sure to develop better and faster, and make new contributions to a sustainable development of the global mining world.
(November 6, 2011, Tianjin, China)
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.
CHINA MINING Congress and Expo 2010 attracted 4,176 registered delegates (including 1,229 abroad, and 2,947 domestic) from 57 countries and region as compared to 3,000 delegates last session. The number of delegates, exhibitors and visitors amounted to 4,500 as compared to 3,500 last session. There were an 53% increase in total exhibitors to 276 as compared to 180 last session , and an 51% increase in total standard booths to 635 as compared to 420 standard booths last session,. The exhibition area exceeded 10,000 square meters, increasing by 25% compared to the previous session. Mr. Li Keqiang, Vice Premier of the State Council, attended the opening ceremony and delivered an opening speech. First Vice President of Republic of Peru Luis Giampietri Rojas and Managing Director of World Bank Ngozi Okonjo-Iweala as well as mining ministers and vice ministers and ambassadors of eight countries were present at the congress. At the projects signing ceremony, 62 international cooperation projects were signed, amounting to RMB11.7 billion. Meanwhile, the congress attracted nearly 200 major media organizations as well as mining journalists from more than 30 countries in the world to be present for spot coverage. In terms of number of delegates and scale of exhibitors and booths, the CM2010 all topped the previous sessions, ranking the world’s premier mining congress and expo..
CHINA MINING Congress and Expo 2011 will be held at Tianjin Meijiang Convention and Exhibition Center on November 6th-8th, 2011. We invite you to join the event and to celebrate the 13th anniversary of CHINA MINING with us. For more information about CHINA MINING 2011, please visit: www.chinaminingtj.org