Interpretation of China Mineral Resources Report (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)
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