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China banks boost precious metals hoard amid lease demand

Source: www.chinamining.org   Citation: Bloomberg   Date: September 2, 2014

The value of precious metals held by China`s biggest lenders surged 66% from a year ago as banks lease more gold to customers because tighter borrowing rules make it harder to lend funds.
    
Precious metals held by Industrial & Commercial Bank of China Ltd. (1398), China Construction Bank Corp., Agricultural Bank of China Ltd. (1288) and Bank of China Ltd., the country`s four biggest lenders, were worth 378 billion Yuan (US$62 billion) at the end of the second quarter, according to financial reports. The growth since last year outpaced the gain in benchmark bullion prices, which rose 7.5% over the same period.
    
China is seeking to rein in credit by raising borrowing costs and cutting off lending to sectors considered at risk of default amid a property slump and rising number of bad loans. That`s prompting banks to hold more precious metals as they expand their gold-leasing business because it`s not subject to loan caps and is considered off-balance sheet lending, according to Industrial Bank Co.
    
"Gold-based financing has grown a lot in the past year,`` Duan Shihua, a partner at Shanghai Leading Investment Management Co., said by phone from Shanghai Aug. 29. ``It`s clear from banks` statistics that lots of companies in China still can`t get enough financing.``
    
Precious metals assets at banks are valued against the Shanghai Gold Exchange prices on the last day of the reporting period and most of the banks` holdings are in gold, Jiang Shu, a senior analyst at Industrial Bank Co., said by phone from Shanghai.
    
The lenders` holdings were the equivalent of about 1,445 metric tons of gold, based on June 30 prices, up 55% from the year before. That`s more than the 1,054 tons that China`s central bank has in reserves, according to World Gold Council data.
    
Bullion of 99.99% purity, the benchmark spot contract on the Shanghai Gold Exchange, was at 261.86 Yuan per gram June 30, compared with 243.5 Yuan a year earlier. It traded at 255.14 Yuan yesterday.
    
The value of precious metals held by ICBC, the country`s biggest bank by market value, more than doubled to 91 billion Yuan over the period, according to its financial report. That`s the equivalent of about 347 tons of gold, based on June 30 prices, up from about 158 tons a year earlier.
    
ICBC had rapid growth in both its precious metals leasing business and a gold accumulation program whereby individuals put aside a fixed sum of money each month to buy bullion, the company said in its earnings release Aug. 28. Wang Zhenning, a spokesman for ICBC in Beijing, declined to comment when contacted by Bloomberg News.
    
There are two types of gold leasing deals. In the first, a customer borrows the metal from the bank and simultaneously enters a forward agreement to hedge price risks, according to ICBC`s website. That allows the company to obtain cheaper credit because the lending fee is lower than the interest rate of a loan of the same tenure.
    
In physical leasing, the customer in a gold-related industry borrows the metal for business needs and repays it at the end of the lease period, according to the bank`s website.
    
China Construction Bank, the country`s second-largest lender, held 51 billion Yuan of precious metals as of June 30, the equivalent of about 194 tons of gold. That compares with 33 billion Yuan a year earlier, according to its second-quarter financial report, or 137 tons of gold. Nobody answered two calls to its press office in Beijing.
    
Agricultural Bank of China, the country`s third-largest lender, held 21 billion Yuan of precious metals as of June 30, the equivalent of about 81 tons of gold. That compares with 17 billion Yuan, or 70 tons of gold, a year earlier, according to its second-quarter financial report. A Beijing-based spokeswoman for the bank declined to comment.
    
Bank of China`s precious-metals holdings were 215 billion Yuan at the end of June, or the equivalent of about 823 tons of gold, compared with 570 tons a year ago, financial data show. Nobody answered two calls to the bank`s press office in Beijing.
    
Holdings may be capped as physical demand slows and the use of commodities to raise financing is scaled back, according to Na Liu, a China strategy adviser to Scotia bank. The nation`s gold consumption plunged 52% to 192.5 tons in the second quarter from a year earlier as buyers purchased fewer bars, coins and jewelry amid a clampdown on corruption, the World Gold Council said Aug. 14.
    
Investigations into the fraudulent use of raw materials as collateral in loans may also reduce demand for precious-metals leasing, according to Liu Xu, a Beijing-based analyst at Capital Futures Co., Banks are increasing scrutiny of commodities financing as public security officials probe whether copper and aluminum were pledged multiple times at the port of Qingdao.

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 2014 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2014. We invite you to join the event and to celebrate the 16^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2014, please visit: www.chinaminingtj.org.

Online expo and summit forum to highlight fifth Taiyuan Energy Industry Expo

Source: www.chinamining.org  Citation: chinadaily.com.cn  Date: September 1, 2014

Unlike its past sessions, the fifth China (Taiyuan) International Energy Industry Expo, which will be opened on Sept 16 in Shanxi`s China Taiyuan Coal Transaction Center, will move some of its exhibitions onto the internet. Through the use of mobile internet such as a website, WeChat and a mobile phone client, the fifth event will enable the customers` access to the latest products, technology and development concepts in the energy field.
    
This year`s expo will include the enterprises of Fortune 500 working in the domestic and overseas energy industry, leading energy industry players, investment organizations and research institutes, and about 200 energy enterprises from home and abroad will be exhibiting at the expo.
    
This show is designed not only to show off products and equipment but also for enterprise branding promotion, policy inquiries and technology promotions.
    
The 2014 Energy Industry Expo`s online version, by making use of the successful experience of other household exhibitions, has mapped out five columns, namely: introduction, news center, summit forum, online exhibition halls, and investment promotion. Three language versions are available: simplified Chinese, traditional Chinese and English. The Expo`s mobile phone client and official WeChat account will also be opened.
    
The online expo will not be closed after its opening. It will link up with the next session`s offline expo, so as to create an online expo that is always available. Even after the conclusion of the Expo, the online platform will still provide services for exhibitors.
    
The low-carbon development summit forum of the fifth energy industry expo is themed on "High-Carbon Resources and Low-Carbon Development, Black Coal and Green Development". Sub-forums focus on low-carbon technologies, low-carbon economy and a teenage low-carbon sub-forum will also be held. Speeches will be given by Li Xiaopeng, governor of Shanxi province. Eric S. Maskin, the winner of the 2007 Nobel Memorial Prize in Economics and Fei Weiyang, an academician of the Chinese Academy of Sciences are expected at the forums.
    
The China (Taiyuan) International Energy Industry Expo is the only national, international and professional exhibition of China in the energy industry, and was initiated in 2007.

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 2014 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2014. We invite you to join the event and to celebrate the 16^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2014, please visit: www.chinaminingtj.org.

China, Russia to start construction of joint gas pipeline 

Source: www.chinamining.org  Citation: Xinhua  Date: September 1, 2014

Chinese Vice Premier Zhang Gaoli (L) and Russian Deputy Prime Minister Arkady Dvorkovich sign a meeting protocol after the 11th meeting of the China-Russia Energy Cooperation Committee in Moscow, Russia, Aug. 30, 2014.

YAKUTSK - China and Russia are to start construction of a joint natural gas pipeline in Russia`s eastern Siberia this weekend, in implementation of a natural gas supply contract signed between the two countries.
    
Chinese Vice Premier Zhang Gaoli flew in from Moscow to Yakutsk, the capital city of Russia`s Sakha (Yakutia) Republic, Sunday evening to attend a start-of-construction ceremony for the Russian part of the East Route of the China-Russia natural gas pipeline.
    
Zhang`s attendance at the start-of-construction ceremony reflects the importance that the Chinese government attaches to the comprehensive strategic partnership with Russia and its will to expand bilateral cooperation to wider fields and higher levels.
    
Pipe-welding will begin on Monday in the Russian part of the East Route of the China-Russia natural gas pipeline, which the Russian side named "Siberia Power" pipeline.

According to a contract signed under the witness of Chinese President Xi Jinping and Russian President Vladimir Putin during their Shanghai meeting in May, the pipeline will transmit 38 billion cubic meters of natural gas every year to China over a period of 30 years starting from 2018.
    
The Russian stakeholder of the pipeline Gazprom estimates that total investment in the project could exceed $5 billion.
    
Gazprom Chairman Alexey Miller said Saturday that the gas supply contract was just a good beginning of bilateral cooperation in the field of natural gas.
    
He said the Russian side is working on implementing the consensus reached by President Putin and President Xi and will undoubtedly build the planned West Route of the natural gas pipeline and export gas to China through it.
    
The start of construction of the East Route of the China-Russia natural gas pipeline signifies a major step forward in implementing the consensus reached by Xi and Putin.
    
The Russian part of the pipeline will link the Kovyktin and Chayandin gas fields in Siberia with the eastern port city of Vladivostok, covering a total distance of nearly 4,000 km.
    
Vice Premier Zhang said the breakthrough on the natural gas project and other large-scale projects helped drive the China-Russia comprehensive strategic partnership into a new era of development.
    
Zhang visited Moscow to co-chair the 11th meeting of the China-Russia Energy Cooperation Committee with Russian Deputy Prime Minister Arkady Dvorkovich in Moscow on Saturday.

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 2014 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2014. We invite you to join the event and to celebrate the 16^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2014, please visit: www.chinaminingtj.org.

Peru to become world`s second-largest copper producer

Source: www.chinamining.org  Citation: The Financial Times  Date: August 26, 2014

Peru is set to become the world`s second-largest copper miner, behind neighbouring Chile, thanks to a $20bn pipeline of Chinese mining projects, according to senior officials in Lima.

Last month`s $7bn acquisition of Glencore`s Las Bambas copper project in Peru by China Minmetals` MMG subsidiary has reinforced the links between the two countries, as Beijing seeks to secure more resources to drive economic growth.

MMG`s Las Bambas deal means Chinese backers are now behind one-third of all Peru`s new mining investments by value, estimated by the country at $61bn.

While US companies ¨C including Newmont Mining and Freeport-McMoRan ¨C have been among the biggest investors in Peruvian mining, Chinese projects in the country are now worth more than those from the US and Canada combined.

Eleodoro Mayorga, Peru`s energy and mining minister, said: "We have excellent relations with the Chinese; China has evolved as a partner. There is more openness, not only at a financial level, [but] also at trade and social responsibility levels.

"It is not the closed, traditional, governmental China, but transnational companies playing the market game," he said in an interview with the Financial Times.

Peru expects to add 1.2m tonnes of copper to its production by 2016, according to Guillermo Shinno, deputy mining minister ¨C which will take its output past that of China, which was the world`s second-largest producer.

Las Bambas is one of Peru`s largest copper projects, with annual output of 450,000 tonnes expected when the mine goes into full production.

Glencore had said the mine could open in the second half of 2015, but MMG is analysing the project`s schedule and budget after taking over operations at the mine this month. The project was initiated by Xstrata before its takeover by Glencore last year.

Other Chinese mining investments in Peru include Chinalco`s $4.82bn Toromocho copper mine, which is currently undergoing an expansion; Minmetals and Jiangxi`s $2.5bn El Galeno, a copper, gold and silver project; a $1.5bn enlargement of an iron ore mine by Shougang Hierro Peru in Marcona; and Jinzhao Mining`s planned $3.28bn investment in Pampa de Pongo, another iron ore mine.

Peru`s mining sector has sometimes proved complex for foreign investment because of local conflicts, often over land and water rights. These conflicts are at risk of being reignited when regional elections take place in October ¨C with LatAm Confidential, a Financial Times research publication, reporting that certain prominent candidates likely to side with local communities against mining groups.

Three years ago, Minas Conga, a $5bn gold project involving Newmont and Minas Buenaventura of Peru, was halted by riots in Cajamarca, amid local concern over water resources. More recently, Zijin`s $1.5bn R¨ªo Blanco copper project has stalled owing to community conflicts.

Some mining analysts have flagged up access to water as a growing concern around the world for mining companies.

However, Mr Mayorga said foreign investors were becoming more sensitive to these potential flashpoints with communities in mining regions.

He argued that new investors had "more consciousness" of water as an issue. "There is no new investor arriving in Peru who could think it will take the water away from the river and from the community," Mr Mayorga claimed. "Today, each project arrives with a solution in hand."

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 2014 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2014. We invite you to join the event and to celebrate the 16^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2014, please visit: www.chinaminingtj.org.

China`s natural gas output up 7.6% in Jan-Jul to 73.3 bln cu m

Source: www.chinamining.org  Citation: China Knowledge  Date: August 26, 2014

China saw its output of natural gas increase 7.6% year on year to 73.3 billion cubic meters in the first seven months of this year, said the National Development and Reform Commission in a statement published on its website.
    
In the first seven months, China`s natural gas imports grew 11% year on year to 33.2 billion cu m.
    
From Jan to Jul 2014, the consumption of natural gas amounted to 102.4 billion cu m, 8% more than it realized in the same period of 2013.
    
In the month of Jul, China`s natural gas output grew 8.2% year on year to 10.1 billion cu m, while its import of natural gas amounted to 4.9 billion cu m, reflecting a year on year increase of 4.3%.

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 2014 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2014. We invite you to join the event and to celebrate the 16^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2014, please visit: www.chinaminingtj.org.

China`s crude oil output up 0.5% in Jan-Jul to 121 mln tons

Source: www.chinamining.org  Citation: China Knowledge  Date: August 26, 2014

China, the world`s second largest oil consumer, saw its crude oil output edge up 0.5% year on year to 121.15 million tons in the first seven months of this year, according to recent figures released by the National Development and Reform Commission.
    
From Jan to Jul, the country processed 263.74 million tons of crude oil, 3.2% more than in the same period of 2013.
    
The country saw its output of oil products grow 4.8% year on year to 164.55 million tons in the first seven months.
    
The country`s consumption of oil products rose 2.9% year on year to 154.35 million tons in the first seven months. There was 8.1% growth in the consumption of gasoline and a 1.4% decrease in the consumption of diesel.
    
In the month of Jul 2014, China`s crude oil output edged up 0.5% year on year to 17.38 million tons, while its output of oil products rose 1.1% to 23.55 million tons.

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 2014 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2014. We invite you to join the event and to celebrate the 16^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2014, please visit: www.chinaminingtj.org.

More lenders get green light to import gold

Source: www.chinamining.org  Citation: China Daily  Date: August 25, 2014

Gold bracelets on display in Lianyungang, Jiangsu province. China is set to gain more gold pricing power by setting up an international board at the Shanghai Gold Exchange.

China is moving to gain more pricing power in the global gold market, allowing more banks to import the metal and starting an international board at the Shanghai Gold Exchange.
    
Shanghai Pudong Development Bank Co Ltd and China Mer-chants Bank Co Ltd said that they received approval earlier this month to import gold. Reuters had reported that Standard Chartered Plc has also been cleared for imports, although the bank declined to comment.
    
With these three, China would have 15 banks that may import gold.
    
According to the Shanghai Gold Exchange, the platform for all physical trade in China, SPD is among the top 10 trading members so far this year and CMB is among the top 20.
    
Meanwhile, the international board of the gold exchange, located in the China (Shanghai) Pilot Free Trade Zone, will start trading as early as September, an exchange source said. Although no official announcement has been made, "all parties involved have started preparing. Of course we hope the more participants the better", said the source. More lenders get green light to import gold
    
The move will also help China establish a yuan-denominated gold pricing system, a note from CMB said.
    
"More participants mean more channels for gold trading, and international players may join in, deepening the China gold market`s integration into the global market," said Yang Fei, a gold investment analyst in Shanghai.
    
The exchange plans to launch three physically backed gold contracts on the FTZ international board, which aims at becoming a price-discovery center.
    
Analysts and market insiders said all these moves will help China`s gold importers gain more pricing power in the global market.
    
According to statistics from the World Gold Council, China became the world`s largest gold buyer in 2013.
    
"A market`s pricing power depends on its activity and accessibility. The more players it involves, the more say it has," said Albert Cheng, managing director for the Far East at the WGC.
    
At present, pricing power lies largely with the London Bullion Market Association.
    
Xu Luode, chairman of the exchange, said earlier this year that as the world`s biggest consumer and producer of gold, China should have its own pricing benchmark. The international board will support that goal.

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 2014 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2014. We invite you to join the event and to celebrate the 16^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2014, please visit: www.chinaminingtj.org.

China`s July bauxite imports plunge 52% on year to 3.1 mil mt

Source: www.chinamining.org  Citation: Platts   Date: August 25, 2014

China`s bauxite imports plunged 52.3% to 3.1 million mt in July from 6.5 million mt in July 2013, latest General Administration of Customs data showed Friday, August 22.
    
The July total was up 5.7% from the month before.
    
Bauxite imports over January-July totaled 22.8 million mt, down a sharp 42.3% year on year.
    
Imports have fallen since Indonesia imposed a ban on mineral ore exports on January 12. Many Chinese buyers had stockpiled ahead of the ban.
    
Indonesia was China`s top supplier of bauxite before the ban was imposed, accounting for about 70% of its total imports.
    
There was no record of bauxite being imported to China from Indonesia in July, compared with 4 million mt of imports in the same month of 2013.
    
Over January-July, China`s bauxite imports from Indonesia totaled 8.8 million mt, down 65.8% from 25.7 million mt in the same period a year earlier.
    
China`s importers have been increasing supply from other regular suppliers as well as actively seeking new supply sources since Indonesia`s export ban was imposed.
    
Imports from Malaysia totaled 226,692 mt in July, sharply higher than China`s total bauxite imports from Malaysia over full year 2013 at 156,140 mt and full year 2012 at 196,598 mt.
    
Over January-July 2014, China`s bauxite imports from Malaysia totaled 429,689 mt.

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 2014 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2014. We invite you to join the event and to celebrate the 16^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2014, please visit: www.chinaminingtj.org.