Sidelights of CHINA MINING 2013
Source: www.mlr.gov.cn Citation: www.gtzyb.com Date: Nov. 5, 2013
CHINA MINING Congress and Expo 2013 were held on Nov. 3. The theme of this forum is”Opportunity, Challenge, Development”.
With dreams and expectations, nearly 7000 representatives from all over the world , discussed the challenge for the mining development and looked for win-win cooperation opportunities at Tianjin Meijiang Convention and Exhibition Center. Both in the theme forum or the inside and outside the venue, the future development trend of mining was still the heating topic.
Challenge: the mining industry was going through deep adjustment
How serious was the challenge for mining industry? Many delegates used "cold winter" to describe it. On different forum, some professionals used specific data to describe the levels of “cold”.
"The price of an already proven 60 tons of gold resources project is 10 million CAD. And the market value of more projects now has shrunk to about 10% of the peak value." GaoXiang, China’s chief representative of the Toronto stock exchange made the further elaboration. For example, he said: "with a set of real estate in Beijing, you can buy at least 20 good projects listed on Toronto stock exchange."
In recent years, Chinese companies had been one of the main investments of international mining market. Since this year, the main investment began to show weaknesses.
On Nov. 2, on the session of Investment and Financing of China`s Private Mining "Go abroad", Chen Xianda, vice-chairman and secretary general of China mining association published a report, titled "Overseas mineral investment situation analysis of Chinese enterprises in the third quarter of 2013”. With the data, Chen Xianda showed that China mining association received 103 Chinese enterprises overseas mining investment projects in the third quarter of 2013, decreasing by 8% over the same period. The agreed investment was $3.136 billion, with a decrease of 10.9% compared with the one from the last year’s same period . Investment involved 101 Chinese enterprises, and money flowed to 36 countries around the world.
Having realized the "cold winter", the delegates wanted to know when would the "cold current" refund. Many people optimistically thought mining economy would recover in two years, but Michael Chen Deze , Canadian metals economics group founder and strategic consultant didn’t think so. In the keynote session, Michael Chen De reminded: "the global economy is uncertain now, not only there are some problems in the United States and Europe, and the BRICs countries’ growth is not good enough. In the past decade, China is the world`s resources industry development engine, but only after China enter into a consumer economy, it can achieve a long-term sustainable economic development."
Just because of the strong “cold current”, some countries had adjusted the mining policy quietly. For example, some southeast Asian countries have stopped ore export bans. From domestic and international data, we could see 2013 will be “cold winter" for the mining industry.
Opportunity: Cooperate to Win the Future
While facing the challenge of the "cold winter", it didn`t mean mining had completely lost the opportunity for development. As Chen Jinghe, Chairman of Zijin Mining Group, said "the pace of the mining enterprises has been accelerated, but the overall situation is still in a lower level, it has not made significant progress in the best time."
“Actually, low level represents a kind of cooperative opportunities”, Chen Jinghe said, “Zijin Mining Group has plenty of cash flow, and needs large mining projects to support future growth of the enterprise, "Zijin Mining Group still hope to conduct a comprehensive cooperation with many mining companies."
Similar to Zijin Mining Group, some companies had enough cash flow which meant more investment opportunities for the market. Mr. Michael Chende made comments in different aspects:
First, the “cold” situation would lead to the shortage of minerals in the future, so the mining industry would be “hot” in the future. Since 2009, many companies had reduced the production capacity and the projects, which would lead to the shortage in the future.
Second, restricted merger activity had become less and less which created some good opportunities for investors. In the past, big companies would try to find each other’s advantage to reduce the cost. Also, for a large project, they would tend to independently owned or two companies’ operation. However, it was combination group now.
"Now Cooperation is the energy of the development of energy resources industry." Michael Chen De emphasized.
Because of this opinion, from more than 50 countries and regions, government officials, experts and scholars and representatives of the mining companies, financial institutions, came to meet in Tianjin. More than 1500 foreign friends came to China, and more than 400 Chinese and foreign exhibitors brought their own project, equipment, technology, services to CHINA MINING.
Development: don`t Speculative Investment
Another reason for the attraction of CHINA MINING to the international mining industry was that China had been the important force in the international cooperation of mining, and was an important investor. However, what kind of attitude should we have for the investment?
Tan Yaling, senior researcher of Bank of China, Dean of China foreign exchange investment of institute, made a speech on ”new characteristics and trend of international economic environment". In the speech, she reminded that what we need was investment rather than speculation. Although price of the resources had been included in the International Finance, we must remember that the basis of finance was the real economy. What we need to do was to develop entity, focus entity and expand entity.
Tan Yaling explained it by the example of the iron and steel industry of our country. The iron and steel industry was the country`s strong industry, and was known as "excess capacity". The reality was that we lack of high-quality steel which was the main developing direction of steel industry. However, steel industry didn’t focus on research and development, but on investment, futures and speculation to obtain huge profits. Then the steel industry would not be stronger.
Tan Yaling believed that "we are in the era of excess liquidity, the biggest feature of the excess liquidity is the strong investment, even for speculative investment. Therefore, investors must think seriously about what we need is a good agriculture, high-quality goods industry, and efficient services. If we just want to get the short-term profit, this will be a "disaster" for countries, not a chance. We should give priority to the entities and industry, with financial as the complementary factor. What is important to the current Chinese economy is to do their own profession.”
Against China`s active overseas investment, Tan Yaling‘s answers won the applause of the audience. Also, it gave us some important questions to think about.
Investment skills: Did Chinese aunt win Wall Street? What we bought was real gold, but Wall Street was gold futures which accounted for 90% on Wall Street trade.
Investment strategy: We were always studying price, and wanted to have a bottom when prices were low. What was the trend of the price? What was more important, price or value? price or strategy? Chinese investors were very simple, and who had the money would be the investors. The outcome was decided by wealth, capital and scale. However, people having no money also could be investors. So by what? Just by techniques, profession, strategy and experience.
Investment ability: we invested overseas, at the same time; we also needed to invest in China. As is known to all, Chinese small and medium-sized enterprises needed investment, rural area needed investment, and so did social security system. (Yu Defu) (Translated by TLRHVC)
About CHINA MINING
As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. 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 2013 were held at Meijiang Convention and Exhibition Center in Tianjin on November 2-5, 2013. We invite you to join the event and to celebrate the 15th anniversary of CHINA MINING with us. For more information about CHINA MINING 2013, please visit: www.chinaminingtj.org.
