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An overview of shale gas exploration through CHINA MINING 2015

Source: www.mir.gov.cn    Citation: www.gtzyb.com   Date: November 4, 2015

As a new star in energy market, the shale gas is motivating an energy revolution in China.

The news came from the CHINA MINING Congress and Expo 2015 in Tianjin that exploration and development of shale gas in China has been carried out and breakthroughs have been made successively in marine facies of Sichuan Basin and continental facies of Ordos Basin. China comes into the third one achieving commercial development on shale gas after America and Canada.

As the America was succeeded in fracturing the first shale gas well in 1981 and made a breakthrough in exploration and development of shale gas, the global pattern in energy and resources has gradually been broken. Up to 21st century, shale gas has brought major changes in the energy industry in many countries. Compared with the United States, China is merely a “new recruit” in shale gas development.

China is rich in organic shale beds with an extensive distribution and possesses a great potential in shale gas resources. After nearly 10-year practice of exploration and development, technological progresses and theoretic explorations, China has made significant progresses in shale gas development including resources potential evaluation, core technology and equipment system and basic theory construction, which basically meets the requirement for large-scale commercial development. During this session, Mr. Zhai Gangyi, Deputy Director of Oil and Gas Survey under China Geological Survey, introduced current situation of exploration and development of shale gas in China, theory innovation and technology advancement and future outlook in shale gas development and utilization. This page focuses on the latest news from CHINA MINING 2015.

■Current Situation of Exploration and Development

Four Shale Gas Production Areas Initially Formed

According to Zhai Gangyi, the proved reserves of shale gas in China have experienced a rapid growth in recent years with over 500 billion cubic meters currently. Four shale gas production areas including Fuling, Changning, Weiyuan and Yanchang are formed with an annual output capacity of over 6 billion cubic meters.

Among which, the SINOPEC explored the proven reserve of shale gas field with 380.598 billion cubic meters in Fuling and the CNPC totally submit the proved reserve of 163.53 billion cubic meters with Ning201—YS 108 well area in Shangluo of Changning shale gas field and Wei 202 well area in Weiyuan shale gas field.

The distribution map of four shale gas production areas

Fuling shale gas field of SINOPEC：

By the end of August, 2015, there were 253 wells being drilling, 204 wells being drilled and 143 being fractured into production. Every single well has a daily average production of 327.2 thousand cubic meters with top production of 591 thousand cubic meters. A total daily production reaches more than 12 million cubic meters and a total of gas production adds up to 2.5 billion cubic meters. The annual production capacity has already achieved 5 billion cubic meters.

Changning and Weiyuan shale gas field of CNPC：

◆Changning201-YS108 well area: there are 67 wells being drilled, 61 wells being drilling with an average testing daily production of 143 thousand cubic meters.

◆Weiyuan202 well area: there are 25 wells being drilled, 14 wells being drilling with an average testing daily production of 167.3 thousand cubic meters.

Shale gas production area in Ordos Basin of Yanchang Petroleum Corporation：

Yanchang Petroleum Corporation made a breakthrough in shale gas exploration in Ordos Basin. A number of wells including Liuping177 and Yunye2 achieved shale gas flow, presenting a promising prospect of exploration and development. Up to now, there are 59 shale gas well being drilled with 50 vertical wells, 3 cluster wells and 6 horizontal wells.

Significant discoveries in new beds and new areas：

◆Important Discoveries in Cambrian Niutitang FormationShale in the South 

Shale gas was discovered in Weiyuan of Sichuan Province, Chengkou of Chongqing Municipality, Cengong of Guizhou Province and Yichang of Hubei Province.

JinyeHF-1 well: shale gas flow with high production was firstly achieved in lower Cambrian Qiongzhusi Formation in Weiyuan area in Southwest Sichuan, with a daily production of 80 thousand cubic meters after fracturing.

Yidi2 well: a well blowout occurred with combustible gas when drilling Tianheban Formation in Yichang of Hubei Province.

◆An important discovery in Sinian Doushantuo Formationshale in the South 

Zidi1 well: shale with a thickness of 100 meters was discovered in Zigui County of Hubei Province, and the Doushantuo Formation shale features with a thickness of 145 meters and the gas-bearing volume of 2-4 cubic meters per ton, which were succeeded in ignition.

◆Important discoveries in Carboniferous- Permian shale in the North 

Weican1 well is the first oil and gas parameter well inUpper Paleozoic Erathem deployed and conducted in western Taikang uplift area by Oil and Gas Research Center, with 69 layers through gas logging, 465 meters drilling thickness of shale and gas content of 4.5 m3/t.

Mouye1 well is the first shale gas exploration well in Zhongmou area, with 10 shale reservoirs, 277.6 meters thick and a daily testing gas production of 3000 m³/d after fracturing.

◆Important discoveries of Permian shale in the South 

Baye1 well: separated gas content averagely reaches 1-2 m³/t, capable of ignition.

Hedi1 well: pure separated gas content reaches the peak of 3.03 m³/t

Jingye1 well: total hydrocarbon in target layer reaches 0.0238%-13.7639%

◆Important achievement in shale gas resources survey in Southern areas of Yunnan, Guizhou and Guangxi

Steady progresses have been made in bidding-won area exploration：

The bidding-invited area has successively conducted shale gas well drilling in Longmaxi Formation, Niutitang Formation and Carboniferous- Permian system in North China and achieved good discovery of shale gas.

■ Exploration and Development Situation 

Breakthroughs only Made in Parts

Resources possess a great potential while the distribution regularities are not clear.

Ministry of Land and Resources organized and conducted shale resources potential evaluation in 41 basins in 2011, with 25 trillion cubic meters recoverable resources, and selected 180 shale gas favorable areas but the distribution regularities are still not clear.

Breakthroughs have been made in merely some areas and several layers, and scope has not yet been expanded.

At present, breakthroughs in shale gas exploration have been made merely in some areas and several layers. For example, Longmaxi Formation has only made breakthroughs in local part of Sichuan Basin and Niutitang Formation has only achieved the shale gas flow in a few exploratory well. In addition, it is still not clear currently in the development potential and prospect in continental facies and marine-continental transitional facies.

Fracturing site of Fuling shale gas field of Jiaoye9-1HF and 9-3HF

Optimal Longmaxi Formation in Sichuan Basin and its lower periphery

The high-quality shale in Sichuan Basin and its peripheral lower Silurian Longmaxi Formation features with extensive distribution, great thickness, well gas-bearing capacity, great resources potential with20% of national shale gas resources, promising exploration and development and key advantage of preservation condition.

Important Lower Cambrian Niutitang Formation (with Sinian Doushantuo formation) in the South

Niutitang Formation shale features with extensive distribution, great thickness, high maturity, a certain gas-bearing capacity but a high degree of thermal evolution, great tectonic destruction and relatively great difficulty in exploration. The working idea of “finding low in high and weak in strong” has taken initial shape.

Favorable conditions for forming shale gas in Upper Paleozoic marine facies in Yunnan, Guizhou and Guangxi

Another breakthrough is expected to be made in this area.

The localization is basically achieved in technology and equipment but the core technology requires continuous efforts to make a breakthrough.

China currently is capable of drilling the horizontal well with less 3500 meters and staged fracturing, explores and implements the industrialized-well operation model and independently innovates equipment including 3000HP fracturing truck. However, the complementary development technology for over 3500-meter wells, micro-seismic monitoring technology and dynamic production forecasting technology are failed to master and equipment including rotary geo-steering system, staged fracturing with sliding sleeve, nano-microstructure and composition analysis are still out of localization.

The development cost is gradually decreasing but the single well cost continues to stay in a high level.

The economic development of shale gas still facies challenges and its commercial development still require sequal attention to supportive policy and cost reduction through technology.

■Progress in Geological Theory Research

Main controlling factors in shale gas of marine facies in South were found out

The complexity and uniqueness in geological conditions of shale gas in China decide that our shale gas exploration cannot mechanically imitate the experience of shale gas exploration and development achieved in America. It is the key to resolve problems of shale gas exploration and development in China to strengthen theory researches on accumulation mechanism and distribution regularities and technological progresses in exploration and development.

According to Zhai Gangyi, China now has preliminarily concluded main controlling factors of enrichment and high-production of shale gas in marine facies in the South.

Deep shelf as favorable facies belt for developing high-quality shale

Deep shelf features with abundant planktonanda strongly reducing sedimentary environment, conducive to the accumulation and preservation of organic matters and the development of organic pore, high organic carbon content and thick high-quality shale with regular distribution.

Tectonic preservation condition as the key factor of shale gas accumulation

The high-quality shale in deep shelf of marine facies in the South generally experiences two stages including early continuous deep burial and late continuous uplift. Roof and floor conditions are main factors of shale gas retention and preservation in early continuous deep burial stage, and the tectonism is the main factor of shale gas preservation in late continuous uplift stage.

The relatively steady tectonic area and favorable roof and floor conditions play a vital role in shale gas with high production. Formation pressure coefficient serves as the direct evaluation index to preservation condition of shale gas.

Reservoir physical property as important condition for shale gas with high production

Shale gas reservoir with natural fractures development, high porosity, high gas content and low ground stress difference greatly contributes to shale gas with high production. The better micro-fracture developed, the larger proportion of free gas and higher initial production will be. And the less horizontal stress difference, the better fracturing will gain.

Process technology as guarantee for shale gas with high production

Horizontal well trajectory and staged fracturing technology are crucial factors effecting the production after fracturing.

Seven main controlling factors

◆High-quality shale sector in abyssal shelf facies features with great thickness and steady distribution.

◆ Relatively steady tectonism, favorable preservation condition and moderate burial.

◆ Formation overpressure (pressure coefficient＞1.2)

◆Reticular natural fractures development

◆High porosity and gas content

◆Less difference in ground stress

◆Horizontal well trajectory is perpendicular to maximum principal stress.

■Progress in Exploration and Development Technology

Independent Innovation to Step Up Development

Shale gas resources in China features with complicated types and various distribution formations, and relatively great differences in main controlling factors of shale gas accumulation with various sedimentary types and different tectonic units, which are great challenges faced by China in shale gas exploration and exploitation. However, independent innovation on exploration and development technology has speeded up the development of shale gas resources in China.

Shale reservoir well-logging evaluation technology

Compared with conventional reservoir, the well-logging evaluation of shale gas reservoir presents more complicated. The logging information plays an essential role in key evaluation parameters including the source rock evaluation, shale gas qualitative identification, the acquisition of total organic carbon, gas content and rock brittleness index. The comprehensive well-logging evaluation has come into the technological support to current shale gas exploration and development.

At present, China has built up the immediate recognition mode for well-logging information of shale gas reservoir in marine facies has been. The “four high and three low” well-logging response characteristic comprehensively reflects high TOC, fine reservoir property, high gas content and good potential in fracturing.

In addition, it also built up the TOC and gas content litho-density interpretation model and mineral content and porosity interpretation model based on elemental capture spectroscopy sonde and combined framing density.

Seismic prediction technology forshale gas “sweet point”

◆Wave-impedance inversion technology for shale thickness predication

◆ TOC pre-stack seismic quantitative predication technology

◆ Pre-stack inversion and gas recognition technology

◆ Seismic fracture prediction technology

Achieving the prediction of sweet point area through seismic and electrofacies characterization.

Shale gas horizontal well drilling and completion technology

◆ Horizontal well drilling and design optimization technology    

◆ Horizontal well optimized and fast drilling technology

◆ Remote transmission geo-steering drilling technology

◆ “Well factory” effective drilling mode for complex mountain surface

Staged fractured gas testing technology of shale gas horizontal well

◆ Parameter optimization technology of differentiation staged fracturing

◆ Pumping bridge plug and perforating combining operation technology, horizontal well coiled-tubing drilling plug technology

◆Effective fracturing fluid system for geological features in China through independent innovation

◆ Micro-seismic monitoring technology

◆ Fracturing flow back treatment technology

◆ Compound bridge plug and 3000HP fracturing truck through independent innovation

◆ Forming the “well factory” fracturing operation mode

Jiaoye42 platform: 17 days for 4 wells with 75 sectors fractured, the top of 8 sectors fractured in a single day, the highest fluid volume of 14 thousand cubic meters into the well and the highest fractured sand volume of 508 cubic meters in a single day, which achieved the construction record with top fractured sectors in single day, top added sand volume and fluid volume.

◆Attempt to “carbon dioxide” waterless fracturing

■ Development Outlook

Face Both Opportunities and Challenges

1. Breakthroughs in Sichuan Basin and its periphery

CNPC and SINOPEC made constant efforts to advance the exploration in peripheral Sichuan Basin and successively achieved progresses and breakthroughs in areas including Dingshan, Nantianhu, Wuzhishan of Meigu County, Micangshan, peripheral Changning and Xuanhan-Wuxi.

2. Increasing shale gas productivity construction

CNPC, SINOPEC and Yanchang Petroleum Corporation increasingly strengthen the shale gas productivity construction and it is expected that the already production capacity in 2017 can exceed 15 billion cubic meters.

3. Progresses expected in bidding won areas exploration

Progressive discovery of shale gas by means of exploration and drilling and fracturing transformation are gained in areas of Baojing, Qianjiang, Cengong, Laifeng, Chengkou and Zhongmou.

Next, horizontal well drilling and staged fracturing will be in practice and it is expected to achieve progresses in industrial gas flow.

4. Ministry of Land and Resource further strengthen efforts to survey on shale gas resources

5. Active initiation on national key science and technology special projects on unconventional oil and gas exploration and development

6. Green and environment-friendly development

◆Establishing green development complementary technology

◆Developing environmental protection measures

The shale gas development in China insists on placing safety and environmental protection, green and low-carbon as top priority, and paying equal attention to resource development and ecological protection, strictly follows safety and environment assessment procedures and strengthens HSE system construction and total HSE management to promote the shale gas field development with safety, effectiveness and cleanness.

◆Forming environmental regulation and contingency plan(Translated by TLRHVC)

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.

Spring of “Internet +” in mining winter

Source: www.mlr.gov.cn    Citation: www.gtzyb.com  Date: November 4, 2015

Mining industry is in a poor state while internet industry is developing strongly. In CHINA MINING 2015, Internet plus gained the most popularity. In the afternoon of October 20, the site of strategic sub-forum cohosted by Qinglan Mining Circle was fully occupied.

"Internet + Mining" first will drive resource growth, then bring the change of the industry development, and then promote the transformation of mining companies, and at last lead to the rise of new markets. Mr. Jiang Jianjun, director of Science and Technology and Cooperation of Land and Resources believed that "Internet + Mining" is promising and even bring a turning point of mining development.

This forum was hosted by Dr. Mr. Zhang Yan, founder of Ming Circle. Guests present at the conference analyzed difficulties faced by resource industry, discussed the innovative mode of "Internet + Mining" and analyzed the changes that Internet plus has brought to mining industry from the perspectives of industry, finance and service.　　

Guests pointed out three issues faced by the current mining industry. The first one is that the industry efficiency is not high, supply and demand information is asymmetry and  division of Industries and local authorities is serious. The second one is that financial service is not enough nearly without mining capital trading platform and minings of heavy assets are seriously lack of capital. The third one is extensive enterprise management, low enterprise internal management level and huge enterprise external industry space that can be optimized.

These issues mean challenges as well as opportunities.

Mr. Feng Rui, chairman and CEO of Silvercorp Metals Inc, recognise the convenience that Internet plus has brought to the internal management. He  said that his company has developed a web-based software, to which engineers can upload the recorded details and photos after getting into the mine. Then managers at all levels can check the safety inspection at any time. This not only solved the problem of the performance assessment, but also formed management platform of the problem, improving the efficiency and saving the cost.

Mr. Yi Tingbin, CEO of Beijing Headmen Group，who has many years of experience in mining right evaluation,is interested in “Internet + Mining + Finance”. He said that because mineral resources on the underground is protean, financial institutions loans more cautious of mineral rights, especially the right of exploration. However, the mode of “Internet + Mining + Finance” can solve this kind of problems to some degree.

Zhang Yan introduced that through the mode of “Internet + Mining + Finance”, Mining Circle has developed mining loans(P2P), mining trade(Crowd funding), and has innovatively offered mining internet financing service.

During the forum, mining circle held a conference of global mining “One Mine, One Code”. Enterprises just spend three minutes filling the relevant information on the mining circle platform to generate the only 2D barcode and its enterprise’s related introduction page. Moreover, enterprises can position their own map according to minerals and industries, release product supply and purchasing information, open up the three level of industry chains, information flow, logistics and capital flow, in order to forming the big data of the global mining Internet plus.

Mr. Yao Chuanlie, general manager of Shenzhen Qianhai Supply Chain Management Co., LTD, thumbed up for this action. He said, the resource is a big industry with hundreds kinds of minerals and each mineral has more than 10 industries, which will make hundreds of matrix. Through “One mine, One code”, we can register and release our product demand in three minutes, and find our upstream and downstream, as well as our own position.

At the scene of the forum, Chinese mining “Internet+” strategic alliance organized by mining circle held its signing ceremony. The alliance take the advantages of the features of fast, equality and coordination of internet information technology, with the help of the alliance enterprises’ technology, capital and service, break the barrier of the traditional industry structure and interface of cooperation, provide high efficient products and services, establish organic relationship between industries and build good resources ecological system in China.

Guests have spoken highly of this kind of collaboration. Madam Xia Yucai, general manager of Hebei Hanxing Mining and Metallurgy Design Institute Co., Ltd said, his company is establishing a service alliance with two companies respectively responsible for exploration and mine production management. He added, “mining industry is in its winter period with difficulties in asking for money and finding mines. However, we think that if winter comes, can spring be far behind. We are confident for our future.” 

Mr. Zhang Jinghe, chairman of China Coal Group Co., Ltd, said, “The winter of mining industry has a great impact on all of the mining service industry. We need to discuss the service mode of powerful combination and invest overseas with mutual support. And “Internet +”can save our cost and improve our efficiency.”

As an innovation of mining industry in China, “Internet +” has gained popularity from the industry. According to Zhang Yan, through the wechat platform built by mining circle, 3,000 insiders participated this forum. A total of 180 representatives released their 2D barcode on the spot and 100 enterprises have applied to join the alliance. Now mining circle has 5000 enterprise users and 5000 individual users. (Cheng Xiujuan and He Zhiqiang)  

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.

Liu Yikang: To stay or to Act when mining winter is coming?

Source: www.mlr.gov.cn   Citation: www.gtzyb.com  Date: November 3, 2015

"Nowadays, the global mineral exploration market appears to hit bottom. China’s mining industry’s strategy of "going global" is still going on, although it has many setbacks. The abundant experience from last round of "going global" has become the precious wealth for next time of overseas expedition. If winter comes, can spring be far behind? At this moment, it should be taken action when time is right."

CHINA MINING Congress and Expo 2015 had a hot topic: On the occasion of the winter of mining industry, has the market already hit the bottom? In the China’s Enterprises Outbound Investment forum, the insiders from mining industry almost unanimously believed that mining market had hit the bottom. A new round of "going global" should be carried out immediately.

First of all, let’s began with a mining investment case, which just missed the perfect opportunity. Oyu Tolgoi Copper Mine belonged to Mongolia, approximately 80 kilometers away from the border with Mongolia, with copper reserves of 31.19 million tons. In 2013, it had been completed and put into operation. Copper production was expected to reach 500,000 short tons annually. In September 2002, with great discovery of a rich concealed ore body in the 270th hole, it achieved a major breakthrough. At that time, Ivanhoe Mines (Ivanhoe Mines Ltd., a Canadian mineral exploration and development company, was listed on the Toronto, New York and NASDAQ Stock Exchange.) wanted to invite Chinese companies to invest in Oyu Tolgoi mine, so they invited the author to pay a visit to this full of prospect land. The end of 2002, like now, was a winter of mining industry. When the author went back with this blockbuster information, few person made inquires. Instead of interesting, all of the Chinese companies held a view that “We have already in trouble now, please give up the idea of talking about overseas investment and long-term development strategy with us". As everyone known, 3 years later, with the recovery of mining industry, Chinese companies poured out to invest overseas, but it was too late. Because of improper disposal, we lost the wonderful chance.

The same was about to happen again in 2008, with global mining climax, Chinese investors flocked to invest in overseas mining market at a staggering price. However, due to the lack of serious investigation of investment environment and specific response plans for different countries’ different risks, Chinese investors directly moved the domestic operation ideas and methods to a completely different cultural background, and ultimately caused massive failures of foreign investment in mining industry.

The current situation of China’s mining industry was similar to the situation in 2002. From 2012 to 2015, the shares of mining kept going down. At the Conference, many spokesmen predicted that mineral products prices slide had room to run, and probably would continue to fall. And mining companies had to go through a period of rough time in the cold winter of mining industry. At this moment, the market values of some large mining companies had shrunk dramatically, and the market values of the junior exploration company had shrunk by more than 90%. With high quality and low price, there were many good projects on the market, which provides enough space for investors to make choices.

However, the domestic mining industry investors had a tradition to chase high. A domestic iron and steel enterprises bought 25% stake of Sierra Leonean Tonkolili Iron Ore at the total price of $1.5billion in July 2011, and purchased the rest 75% stake in in 2015 April with $1.7 billion. The purchase price at low tide was only 3.7% of the purchase price of the crazy period. Because of this tradition, a lot of enterprises were holding back to see what would happen next. As if it was a repeat of the same mistake of Oyu Tolgoi mine in 2002.

From author’s view, mineral investors should have a strategic vision to search for the global potential project with low price and high quality instead of maintaining those exanimate exploration projects with the result that miss so many wonderful opportunities. Many of the world`s junior exploration companies’ share price had fallen to three or five cents. It had hit the bottom. Could it be worse?

Look at those excellent Chinese investors, like WISCO, Sinotech and so on, with considerable strategic vision, they precisely spotted the mining market trends, seized the window of mining recession period, and grasped the opportunity to get the good performance of overseas mining investment.

Nowadays, the global mineral exploration market appears to hit bottom.Of course, some mineral projects had no opportunity to develop during the mining downturn. But when the springtime of mining industry is coming, it will become a popular asset.

China’s mining industry’s strategy of "going global" was still going on, although it had many setbacks. The abundant experience from last round of "going global" had become the precious wealth for next time of overseas expedition. If winter comes, can spring be far behind? At this moment, it should be taken action when time is right.  Liu Yikang)

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.

Capital gives wings of mining development

—A record of the mining investment & finance and capital Market session

Source: www.mir.gov.cn      Citation: www.gtzyb.com   Date: November 2, 2015

With current sever situation, global mining giants experience the loss of 50% in their market value, and the preliminary exploration enterprises even face the value loss of more than 70% and only about 20% of previous value left. Main tasks faced by all enterprises are cost control, optimization on capital expenditure and the most pressing demand for financing. And Chengtun Mining Group Corporation has succeeded in transforming from a traditional mining enterprise into a compound one with mining financing, which has not only achieved more growth benefits but also provided the financial products and packages for other enterprises. Its financial business resolves the problem on self-development as well as comes into a new service increasing point.

Increasing Capital Pressure

“Looked from the financial statement in recent two years, it is found that a number of large mining enterprises are in high debt level and it is required to control the debt index of new high-tech enterprises and carry on a major reform on fund management. Currently, these enterprises are facing the major tasks of controlling capital and optimizing capital expenditure.” Mr. Wang Minghui, Head of Mining and Metals of Standard Bank, said so.

If performance of large mining enterprises is like so, then how about the preliminary exploration enterprises?

Mr. Wang Dongsheng, General Manager of Chinalco Resources Corporation, indicated that the mining industry has stepped into a tough time of “cold winter” with main performances in following aspects. First, there is a sever lack of confidence in current market, which leads to the sharp decline in commodity prices of metallic and mineral products. Second, mining enterprises experience an extensively loss in their market values including the large mining enterprises and the world-class mining giant such as Glencore. The preliminary exploration enterprises lost over 70% of value and about 20% of previous value left. And enterprises are extremely difficulty in financing.

Mr. Fan Zhaokang, CEO of BOCI Global Commodities (UK) Limited also considered that the greatest important need faced by all current enterprises was financing.

“The essence of mining industry is resource and capital.” Mr. Wang Jionghui, Assistant President of China Minmetals Corporation hit the point of essential connotation of mining industry with one comment. With current situation, what is the top priority for all mining enterprises? He considered that the first one is cash flow. The enterprises should own a cash flow and positive one is better during the downturn mining industry, which will enable them get through this “winter” in mining industry. Second is debt ratio. Remove the non-performing assets as far as possible, especially in the terrible situation of mining industry, and the shareholders and others have to clear their most assets. Third is cost. The core of the enterprise is to own the controllable cost. If the enterprise is greatly endowed with resource, it can continue to produce but also with a control on production and take this opportunity to focus on its internal strengths and cost control for benefits to make the cost reasonable. Although there is a narrow gap between our country and the overseas in resources evaluation, a still gap in production organization and management and a large gap in cost management and control.

“The price of mineral products continues to fall and changes also have taken place in demand structure with surplus productivity in iron ores and molybdenum minerals, which are actually the indication of mining industry under the New Normal.” Mr. Gao Xiang, President of China Beijing International Mining Exchange, indicated that investment and financing activities in mining industry under the New Normal is decreasing and the difficulty in financing is expanding. Taking two financing indexes of total amount and programs amount of Toronto Stock Exchange in Canada as an example, the total financing amount is decreased while the financing programs are increased in the corresponding period, which can be simply interpreted that each single financing amount is decreased with the reduction of total financing amount. The financing comes to greater segmentation, which actually shows that the enterprises in preliminary exploration has made a lot of small-scale financing in order to continued running and even the management layer of some enterprises in Toronto Growth Enterprise Market takes out money to make their enterprise continuously survived.

Moreover, “there are a number of great changes took place in our country. First, the state finance is mainly invested on non-profit basic constructions rather than common projects, which tightens commercial investment. Second, many enterprises suffered a great loss with their investment in the previous climax period of mining industry, quite a number of enterprises suddenly wanes their enthusiasm for mining investment, and various other factors lead to the sharp drop in domestic investment amount.” Mr. Wang Dongsheng said so.

Financial Products Bring New Hope

Mr. Wang Wei, Head of Fixed Income Research of BOC International Holdings Limited, considered that “financing is not only the problem involving the enterprises’ self-development but also a new service increasing point for themselves. In the view of both national policy and the development of global capital market, the past 10 years, especially the past 5 years, has witnessed that the enterprises in China has greatly expand their financing room in capital market at home and abroad.”

Although the mining financing face great difficulties, “the support from financial industry is indispensable to the mining enterprises.” Mr. Cheng Manjiang, Chief Economist and General Manager of Research of BOC International Holdings Limited, considered that according to the future situation, mining industry may be not a commodity any more, nor a concept of a large commodity any longer. The majority of income of most enterprises probably comes from the trade and design of financial products. Without engaging in trade and design of financial products, running the mining industry will merely stay in substantial level and hard to rise from the current valley bottom. With the accelerating process of globalization, the mining industry, different from any other industry, is truly a global industry integrated with uniform price, products, trade rules and others, which all require the mining enterprises to rapidly improve their own management ability and financialization level.

In this aspect, Chengtun Mining Group Corporation Limited has taken a firm step with successful transformation, which not only resolves their own problems but also provides the financial products and packages for other enterprises. Mr. Zhang Jiangfegn, the Vice President, introduced that their enterprise achieved different results since choosing the way of designing and trading metallic and financial products. After the gradual implementation of designing and trading the financial products, Chengtun Mining Corporation has achieved the growth against the market with the stagnation in the mining industry. Based on original mining foundation, seven mines of Chengtun Mining Corporation still gain a growth of 50% in benefits with exploiting their potential in the situation of falling prices and market demand shortage. However, after introducing their financial products into the market, they actually bring the company a growth benefits of 200%. The high-level of Chengtun Mining Corporation realized that although there is a development room for a traditional enterprise running the mines, there is a larger development space when it turns to the design and trade of financial products and more infinite space for development, so to speak. In 2013, Chengtun Mining Corporation has further adjusted the design and trade of metallic and financial products.

“This enlightenment has its origins in our merger negation.” Zhang Jiangfeng explained. During the past merger and acquisition for various mines, Shengtun Mining Corporation often confronted the same problem that mutual parties held a large difference in prices. For example, the opposite party charged for 1 billion yuan while Chengtun Mining Corporation only offered 500 million. 99 negotiations ended up in failure with such 100 negotiations on merger and acquisition for mines. Unless there is regardless of cost, but many things cannot be done. Every mine expected to be merged wants to access to finances in various ways, and Chengtun Mining Corporation own a 20-year history in capital market with a strong power of financing which is also its strength. As a result, Chengtun Mining Corporation was inspired to take their capital advantage to work together with mines.

The large commodity trade currently faces the downturn, the price of mineral products experiences a sharp fall, and the state-own banks and commercial banks withdraw loans from the enterprises, which cause a tight financial budget for the enterprise. Zhang Jiangfeng said that facing such situation, Chengtun Mining Corporation upgraded and transformed the traditional mining enterprises and innovated the current seven financial products and services ranging from factoring business to finance lease, small-amount loan, P2P, gold lease and even auction. Chengtun Mining Corporation has expanded much more development space during the whole industry chain, and all enterprises on the industry chain started from mines excavation to smelting and then metal processing become the client of Chengtun Mining Corporation, which is unimaginable in the past.

He introduced that Chengtun Mining Corporation currently takes advantage of its capital strength to serve for the mines with finance lease in various ways including direct lease and leaseback. If some mines require the technological transformation, Chengtun Mining Corporation will directly invest them with equipment and the mining enterprises can use the equipment provided by Chengtun in the way of lease. Some mines are rich in mineral resources and good in production equipment but lack of funds, Chengtun Mining Corporation will firstly purchase the equipment of mines and then conduct the leaseback to the mines. In the way, the mines access to fund and both two methods stimulate the capital circulation for mines, which is a very effective way for the enterprise to go through the tough time and truly achieves a win-win result. A number of mining enterprises has experienced a very hard period after the banks withdrawing loans and the decline price of mineral products. However, with the equipment or capital investment of Chengtun Mining Corporation, they immediately motivate their business activities. Zhang Jiangfeng believed that there would be a long-term cooperation between Chengtun Mining Corporation and these mining enterprises in the future to shape a beneficial cycle.

The large commodity trade faces a bad situation on the whole during the economic downturn. If more efforts are taken into the design and trade of financial products, the mining enterprise will embrace a better future, which also conforms to the topic of CHINA MINING Congress and Expo in this year—New Normal, New Opportunities and New Development. On this point, Wang Wei considered that the enterprises can choose financial products for themselves according to their own needs.

Seize the Opportunity of Low Financing Cost

The recent price of mineral products is relatively steady, and the industry widely considered that the price in the future will rise up but merely not sure when it would happen, and the future of mining industry is still promising. Although the mining industry stays in an extremely difficult stage, there also contains opportunities. Mr. Wang Jiahua, Vice Standing President of China Mining Association, took Zijin Mining Group Corporation as an example and said that “although some enterprises which has previously gone abroad are ‘once bitten, twice shy’, it is not for all. Zijin Mining Group Corporation shot attempts twice in this year and merged two important projects in the international market.”

He regarded that the 18^th National Congress of the Communist Party of China has defined the direction to establish a multi-level financial market. Risk exploration capital market actually exists in the global and it is very necessary. China will surely establish our own risk exploration capital market. Although Canada, Australia and the UK own a mature risk exploration capital market, China cannot blindly copy or mechanically imitate them. We should, based on our state facts, learn from the advanced foreign competitors including Australian JORC Standard and Canadian 43101 Standard to build up our own risk exploration capital market focusing on the core of risk control and the construction of credit system to enable the fraud behavior in system construction detested everywhere like rats crossing the street.

Meanwhile, he indicated that risk exploration market would bring three major changes into China, firstly the achievement of global resource allocation, secondly the improvement of internationalization level and thirdly the formation of social diversified investment. In the past, the investments mainly happened within the mining industry, which led to investment shortage in some way. And now the introduction of “Internet+”, especially with the establishment of risk exploration capital market, will exploit a new market for new modes including internet crowd-funding. A powerful mining industry requires diversified investments in the society rather than the merely investment within the industry.

With regard to capital and finance, Wang Wei said that the mining industry was actually linked with capital market. Just as the mining industry was at a valley bottom, the financing cost is low in the view of current situation and the enterprises should seize the opportunity of low financing cost to further expand their own share in the global market with the very low asset price. Currently, purchase some assets with low price, fewer competitors and relatively low cost, and this moment is a good chance to enter into the market, especially for the resource-based industry.

Mr. Wang Dongsheng, General Manager of Chinalco Resources Corporation, proposed an advice of seizing the investment opportunity in the current market. In his opinion, the short-term depression and the middle-term optimism offered a great chance for the enterprises in China, which is an opportunity to enlarge and strengthen China mining industry in the world. The period is more depressed, the more important to transform and develop. Just as the developed countries invested on China in the early period of reform and opening up, they attached great importance to the emerging markets and countries as well as the investment development of potential countries and markets.

At the same time, he reminded that investment require to learn the regular rules and pay attention to relevant issues. The mining industry features with long period, large investment, high risk and high return, which has been shared in common. After many years of practice, a large amount investment generally is short in period and often lies on the middle and late exploration project. Generally speaking, the middle and late exploration project and the early development project feature with high likelihood of success, low risk and high return. The investment on commercial exploration has to select the type of ore, area, investment phase and cooperative enterprise, and the popular ore with good liquidity is the best.

He specially pointed out that controlling risk must focus on the investment opportunities of two kinds of projects. One is the high-quality project with middle and late exploration periods and the other is merging the project of converting the exploration right into mining right to construct mines with low-cost investment. If the investors want to make benefits in the way of investment, these two kinds of projects are most possible to produce values. Thus, great concentration should be taken on these two kinds of projects. The key point among them is to lower the prospecting risk and select the high-quality enterprises with good projects as the premise. (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.

Opportunities and difficulties coexist in Sino-Mongolian mining cooperation

Source: www.chinamining.org         Citation: chinadaily.com.cn        Date: October 28, 2015

China and Mongolia reached eight cooperation agreements on mineral exploration ,worth over 30 million yuan ($4.73 million), at the first China-Mongolia Expo in Hohhot, Inner Mongolia autonomous region.

The meeting on mineral resources exploration is held at the first China-Mongolia Expo on Oct 24 in Hohhot, Inner Mongolia autonomous region. [Photo/nmg.gov.cn]

For instance, Inner Mongolia Mining Group signed an overall plan on joint exploration of non-ferrous metal and unconventional gas with a Mongolian mining company.

The two groups will increase cooperation in mineral prospecting, mining, and infrastructure construction, according to Hao Shen, deputy director-general of Inner Mongolia Mining Group.

Chinese and Mongolian mining industries stepped up cooperation in recent years thanks to support from top authorities on both sides.

The joint declaration on establishing a comprehensive strategic partnership signed by Chinese and Mongolian heads in August 2014 mapped out cooperation in mineral exploration, infrastructure construction and financial cooperation. The cooperation mechanisms of both countries are being improved. A mineral resources and energy cooperation committee was established, said Peng Qiming, chief-engineer of the Ministry of Land and Resources.

Peng Qiming, chief-engineer of the Ministry of Land and Resources speaks at the meetingon Oct 24. [Photo/nmg.gov.cn]

In 2014, Sino-Mongolian trade volume totaled $7.3 billion, with mineral and livestock products the main exports from Mongolia.

However, mining cooperation is held back by the current international economic environment, infrastructure conditions and business costs.

Wang Bo, vice-chairman of Inner Mongolia addresses to the meeting. [Photo/nmg.gov.cn]

China and Mongolia set high value on mining as a driver for economic development. Pushing reforms, innovation, sustainable development and cooperation is a concern shared by both countries, said chief-engineer Peng.

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 2016 will be held at Meijiang Convention and Exhibition Center in Tianjin on September 24^th-27^th, 2016. We invite you to join the event and to celebrate the 18^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2016, please visit: www.chinaminingtj.org.

Mining rights policies and regulations under New Normal

—Q&A seminar by relevant departments from MLR

Source: www.mir.gov.cn    Citation: www.agkyb.com   Date: October 28, 2015

The CHINA MINING Congress and Expo 2015 held the session on special topic of “Interpretation of Mining Right Policies”. The relevant heads of Department of Mineral Development and Management, Department of Mineral Resources Reserves, Strategic Research Center of Oil and Gas Resources and Department of Cultivated Land Protection (all the above department are under Ministry of Land Resources, PRC)focused on the interpretation of new policies and new requirements of mining right management issued by Ministry of Land and Resources,PRC and promoted newly-issued measures of mining right management for the public convenience. The session also conducted interactive activities with mining right people and investors, and the heads of related departments on the spot gave answers to inquiries of the policies problems.

Q: Fluorite mine previously was the mineral with total production control. Are there any latest regulations or development trend on current fluorite mine?

Mr. Yao Huajun, Director-General of Department of Mineral Development and Management under MLR: MRL issued the “Notice on Control Index of Total Production of Highly-alumina Clay Minerals Fluorite Mine” in 2010 and firstly implemented the control management on total production of fluorite mine. The control at that year targeted at a total production of fluorite mine with 11 million tons (ore production), and now there is no longer for the implementation of total production control on fluorite mine. With regard to protective mining policy, it will be taken into consideration with our industry policy for establishment of a dynamic adjustment mechanism on a pilot basis in the future to gradually improve the examination and approval proceedings of protective mining minerals. The State Council also retained the examination and approval of protective mining minerals as an internal item in government during this approval system reform, and it is surely a hot issue. There actually are some relevant regulations on fluorite mine in other industry, but it is not the protective mining mineral any more. With the accelerating social process of post-industrialization, non-metallic minerals play an increasingly important role and Ministry of Land and Resources will also organize experts to have discussions on establishment of a dynamic adjustment involving more mineral types than fluorite mine.

Q: We faced relatively great confusion in running fluorite mine in the past and it was difficult to exactly grasp the establishment of mining right and exploration right and the regulations relevant to production quota. Please give a detail on the establishment of mining right and exploration right, and whether the relevant quota policies are similar to other minerals? Is there any special?

Mr. Bo Zhiping, Deputy Director-General of Department of Mineral Development and Management under MLR: The control management on total production of fluorite mine has been released currently. This control management has its origins at the year of 2009. Then, the economies including EU, the United State and Japan launched the proceedings against 13 raw materials in China under the framework of WTO. We chose two minerals including the fluorite mine in response to this lawsuit and started to manage total production control since 2010. China lost this lawsuit and lifted total production control.

Q: My question pertains to the policy of shale gas. If there is a requirement for drilling only a parameter well of shale gas, does it need to approved by Ministry of Land and Resources? Since there is a clear permission restriction to shale gas exploration and exploitation, what qualifications are required to the unit for application of drilling a parameter well of shale gas?

Mr. Zhao Xianliang, Director of Strategic Research Center of Oil and Gas Resources under MLR: We firstly have to be clear on a concept. Only the corresponding qualifications are required for a unit to obtain the exploration right or mining right. At present, Ministry of Land and Resources is considering setting free to the qualifications for exploration right of shale gas. The first round of bidding for exploration right of shale gas merely faced four corporations including CNPC, SINOPEC, CNOOC and Shaanxi Yanchang Petroleum Corporation. And the qualifications for application were adjusted during the second round of bidding for exploration right of shale gas. All units with qualifications of gas exploration (including coalbed methane and natural gas) are qualified. Thus, the second round of bidding for exploration right of shale gas witnessed a large amount of enterprises with coalbed methane exploration qualifications registering or participating the competitive bidding as operating representatives.

With regard to conventional oil and gas, its initial bidding pilot in Xinjiang has currently been conducted but cannot be totally cancelled since the prospecting license and mining license still require corresponding qualifications.

At present, Ministry of Land and Resources has adjusted relevant policies based on the consideration of laws and regulations and the need of reform. The open bidding for oil and gas exploration regions in Xinjiang did not make requirements on exploration qualifications, but the bid winner ought to select an exploration institution before exploration registration for a temporary qualification in Ministry of Land and Resources.

What qualifications are required for drilling the parameter well of shale gas depends on the specific behavior of drilling the parameter well. If it is merely a geological survey project, there is no need to apply the exploration right but a corresponding filing or application in local government department is required. If drilling the parameter well is purely a personal behavior, it may not be approved without any exploration qualifications.

Mr. Yu Haifeng, Director-General of Department of Mineral Resources Reserves under MLR: If the project of survey work is funded by finance, after being officially approved and replied, it can be drilled with permission of provincial departments of Ministry of Land and Resources. If the enterprise wants to drill the parameter well of shale gas with previously obtained oil and gas exploration right, it can be achieved through altering additional minerals. Except above two cases, it is the key for other enterprises to obtain the approval of provincial departments of Ministry of Land and Resources. Considering the complicated facts and different conditions, it is hard to simply decide whether it can be drilled or not.

Q: According to relevant state regulations, only the proved orefield financed by our country is allowed to charge for the mining right. In the past several years, the mining industry was in better situation and the mining enterprise did not particularly care about the assessment amount of the money paid for the mining right. However, in fact, there are many cases that the current documents or relevant materials are not very standard to fully evidence that the proved orefield is state-financed, which may cause the partial loss of state assets. Particularly, the enterprise who has obtained but not disposed the mining right has to pay for the charge with a large amount of money during alteration of mining mode. And the policies in all provinces (areas and municipalities) are different, what is the opinion of Ministry of Land and Resources on such issue?

Yu Haifeng: I have three points on this issue. First, according to our understanding in charge, the national finance investment on the geological survey project enables a valuable orefield formed or a valuable mine explored, which must reflect the right of national finance as an investor in the way of charge. However, in the practical work, all valuable orefields formed with national finance investment or vacant land without national investment in some provinces (areas and municipalities) are required payment and also called charge as long as they are remised. Therefore, a clear comprehension in the term of charge is required.

Second, we actually experienced such issues many times during the current audit and inspection tour in the field of mineral resources. Many officials in the system of Ministry of Land and Resources are arrested for involving the loss of state assets. With regard to the identification of criminal liability, both the auditing department and discipline inspection department ask for opinions of Ministry of Land and Resources. We insist on that if there is the investment based on national finance (including the central and local governments) and ore field or valuable ores are actually found, corresponding charge is surely required after the charge assessment of mining right. This system has never changed. However, the difficulty of this issue lies on whether the valuable ore field or minerals are found. It depends on the real historical materials at that time to prove whether they are drilled or conducted with heavy engineering and other works. Some surveys might happen in the 1950s and the workers in those previous projects cannot be found, which is hard to check and verify in this case and it merely depended on the current materials and numbered evidences. Charge is required if it is true, and charge is not required in the contrary situation. Of course this issue is hard to handle and it involves various interests from all parties.

Third, concerning charge assessment and its repayment, Ministry of Land and Resources is considering a number of new reform measures to relieve the pressure on enterprises for paying a large amount of charge, including installment payment or staged payment, or adjustment to payment with the varied mines income. The ultimate goal targets at resolving the issue in a way combined the consideration of actual difficulties faced by the enterprises with the protection on the authority of charge revenue. The system is under our study and has not shaped at present.

Q: There are still three questions to inquire. First, how to define the standard of “state-financed”? Second, with regard to the “state-financed”, the burden of proof should lie on the government. If the government fails to evidence the national finance investment amount and the already conducted survey on the involved valuable ore field, is it possible to consider that it is the government rather than the mining right people who cause the potential adverse effect? Third, at present, the installment payment on mining right charge is allowed within our policy. However, if the current charge is too high, a certain proportion of fund possession cost is surely charged in accordance with relevant regulations and the cost equals to the loan interest rate at the corresponding period. This is an extremely high financial cost, being the greatest financial pressure for every mine. Is there a better way to help the enterprises to resolve this problem and relieve the pressure?

Yu Haifeng: I want to talk the last question firstly. We are informed on the issue of financial cost that there is truly heavy burden on some domestic major enterprises of iron mine in this aspect and at least heavier than those in other countries around the world. The recent price of iron ore is lower and taxes and dues account for 37% of the whole income, which leads to great difficulty in continued running of the middle and small mines. Thus, it should be brought to the attention. Our preliminary idea is to work out a reasonable mechanism and adjust it with the market. In addition, a supportive policy for the enterprises is introduced in a special period, instead of blindly strict taxes or charges, to help the enterprise through this tough times.

The second question pertains to the fund possession cost. At the end of this year or so, Ministry of Land and Resources may shape an opinion on this issue and also on the previous mentioned issues—how to define the standard of “state-financed”? who will provide proof? What should do if there is a mass in explanation? —and on other issues.

Q: The latest document from Ministry of Land and Resources has mentioned the support to public entrepreneur and innovation and “land for new energy” are defined and explained in its content, with a special mention of the permission of leasing the photovoltaic land and the necessary formalities of construction land for farmland. Then, does the program of mutual supplement between agriculture and cultivation, fishery and cultivation require to go through the farmland formalities?

Mr. Yan Gang, Deputy Director-General of Department of Cultivated Land Protection under MLR: As regards photovoltaic land, our country has introduced a number of policies including growing rice and keeping fishes under the photovoltaic panel. Two groups are classified at present, the waste land which is directly access to and the cultivated land which is used in accordance with policies. In case of other new situations and new problems, it will be gradually worked out in the future.

Yao Huajun: This issues contribute great help to our work advancement, system improvement, reform deepening, services optimization and efficiency enhancement. At present, the mining industry has entered into a new development with new normal, new challenges and new opportunities, which also demands for higher way to develop and utilize the mineral resources. The transformation in development and utilization inevitably forces the birth of corresponding system and policies, even the adjustment, adaptation, supplement and improvement on higher laws and provisions. (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.

Let the geological relics "live"
--- focusing on the construction of geological parks in China

Source: www.mir.gov.cn      Citation: www.agkyb.com   Date: October 28, 2015

The lecture on special topic of Geopark and Geological Tourism Development during CHINA MINING 2015 was held at Meijiang Convention and Exhibition Center in Tianjin on October 23^rd. This was the first time to incorporate the session on “Geological Relic’s Protection and Geopark Construction” into the CHINA MINING Congress and Expo. The attendees shared experiences and achievements of geological park and geological tourism development in China.

Open a New Chapter in China Geological Park Construction

“The concept of geopark is put forward in the mid-1990s and the geopark construction aims at preserving geological relics and environment, popularizing science education and reasonably developing resources of geological relics to promote sustainable development in local society and economy, and making use of geosciences theories and methods and absorbing essence of other disciplines to serve for tourism resources survey, evaluation, planning, development, management and protection so as to advance tourism development.” Mr. Wu Zhenhan, Director of Scientific & Foreign Affairs Department under China Geological Survey and Vice-president of Chinese Academy of Geological Science, gave an introduction to the origin of geopark.

China is rich in geological relics with full range of types, as a rare country in the world. China firstly proposed that government departments led the organization and construction of national geological park and also became one of the early country with geoparks in the world. Ministry of Land and Resources held the forum on National Geological and Geomorphic Landscape Protection in Weihai of Shandong Province in 1999, with the proposal of initiating the program of national geological park. And two institutions, national geological relic and geopark leading group and its review committee, were established based on the program with a series of documents and standards.

The geological park construction in China is booming. According to the introduction from Madam Chen Xiaoning, Deputy Director-General of Geological Environment Department under Ministry of Land and Resources, there were 11 national geological parks approved in 2001 with 33 national geological parks in 2002 and 41 national geological parks in 2004… Up to now, a total of 185 national geological parks have been approved in China. In the view of distribution, our national geological parks generally spread across 31 provinces and municipals around the country. Among which, the geological parks in the western regions are well developed.

It is reported that China has started the application for world-class national geopark since the year of 2013 in order to respond to the proposal of world-class national geopark by the UNESCO. To date, there are 120 world-class geological parks across 33 countries and regions in the world, and 33 of them are in China with roughly a quarter accounted for all. A remarkable achievement has been made in our geological park construction with a unique management model, which has been praised by the UNESCO for our geological park construction playing a pioneering and motivated role.

Madam Chen Xiaoning indicated “Geological Environment Department of Ministry of Land and Resources, as the functional department for geological relic’s protection, has made continuous efforts to explore the way to preserve geological relics for many years. From constructing the simple conservation area to the geopark combined development with protection, the geological park construction is the best and effective way to protect the geological relics.

“China has taken the lead in the national geological park construction around the world and owns unique features, which has made a significant influence and played an important role in our social and economic development.” This is the evaluation from Wu Zhenhan about the role of geological park in China.

Active Exploration for New Model Across China

It is informed that Qinglan Geopark in Guangdong Province is initially slow to develop and covers a small scale of 17.16 square kilometers, mainly featuring with geomorphic water erosion. There are abundant and various geological relics and landscapes including hot spring, waterfall and green pound, and the Green Island of them is the AAAA scenic area in China.

Speaking of this geopark construction, Mr.Lin Wenfeng, county magistrate of People’s Government of Raoping County of Chaozhou City in Guangdong Province, indicated that Qinglan Geopark has consistently adhered to the principle of developing with protection and protecting with development and explored and formed a whole of feasible ideas and measures through practice.

First, innovating“protection and development”mode. A large amount of funds is required for the protection and development of a geological park. The Raoping County, the location area of Qinlan Geopark, merely owned the public financial budget of 400 million yuan in 2012, which was difficulty in covering the investment for protection and development of geological park. Facing this challenge, the government, based on the full investigation and survey, took the initiative to mobilize the leading enterprises in local tourism to be a part of the development and construction of geological park. With a cooperative model of separating the ownership and management, the ownership belongs to the local government, while the management depended on the autonomous investment of enterprises according to the principle of developing with protection and protecting with development. The enterprises were entitled to develop and utilize the geological park and assumed sole responsibility for their own management decisions, profits and losses; in addition, they were also responsible for the investment and construction of geothermal museum and other facilities for science education.

Second, strengthening government leadership and improving working mechanism. Qinglan Geopark has consistently placed protection as top priority and development as second to improve the mechanism for planning and management during the process of promoting the protection management and development utilization.

Third, promoting “protection and development” in high standards and quality. The county established the idea of building excellent a geopark during its construction, and merely spent three years, with the leadership of government and funds from enterprises, to bring the Qinglan Geopark into a large scenic area integrated the geological tourism, science popularization and research, leisure and vacation with ecotourism.

Qianglan Geopark innovated the running model of protection and development, adopted the cooperative model of separating the ownership and management, strengthened government leadership and gave a full play to the role of companies, which ultimately achieved remarkable benefits in society, ecology and economy.

Another geopark with significant progresses is exemplified by Alxa Desert Global Geopark of China. When mention of the geopark future, Madam Naren Tuya, Director of Alxa Desert Global Geopark of China,  gave full confidence on it. And she said, “Alxa Desert Global Geopark has currently entered into a new development stage and will continue to focus on the resources conservation and ecological environment construction of desert geological relics, promote the desert geoscience popularization and education and research, innovate working methods and strictly follow the standards for global geopark construction and management to explore a feasible and new management model of desert geoscience tourism conformed to the local sustainable development in society and economy so as to bring the desert geoscience tourism from Alxa into the world.”

Tianzhushan Global Geopark took advantage of its own strength to take an active part in the international cooperation and exchange to introduce its landscape and achievements in all aspects into the world. In addition, its unique features in working and achievement, which exemplify the very best in the construction, running and management of China global geological parks.

Yanqing Global Geopark, one of the geoparks in the Capital circle, is now working out a 3-year administrative outline. Mr. You Baojun, Director of Administration for Yanqing Global Geopark of China indicated that this geopark followed the construction principle of “establishment on science research, sustainable development, communication and mutual benefits”. Meanwhile, he also introduced the overall conditions of geoparks in the Capital circle. At present, Beijing totally owns 8 geoparks with 2 global geoparks including the Fangshan Global Geopark and Yanqing Global Geopark. Both of them in the mountainous area around Beijing are the ecological conservation area and also serve as the green protective screen for Beijing.

Geoscience Tourism Seizes Opportunity to Booming

The geological relic’s protection and geological park construction has aroused increasing attentions and concerns from China and the world and the geoscience tourism has also been developed and expanded in the geological park constructions.

Geoscience tourism was firstly proposed by a number of scholar in China and has shaped a science and talent-cultivation system after nearly 30-year development. Mr. Tian Mingzhong, Professor in China University of Geoscience (Beijing), considered that geoscience tourism mainly worked on the research on issues in tourism involving geography and basic disciplines and focused on promoting tourism developing to scientific tourism. In his opinion, geoscience tourism experienced four development stages.

First, the embryonic stage. The great decision of reforming and opening up in 1979 has motivated the initial development of tourism. At that time, the geoscience academy took active efforts to serve for the tourism with earth and scientific knowledge, but merely in the exploration stage. After 1985, the national geoscience tourism workshops were successively held across our country and the organizing committee of China Geoscience Tourism Research Society was founded.

Second, the initial stage. A series of academic conferences were held with the establishment of provincial organizations of geoscience tourism and the development and compiling of introduction to geoscience tourism, which played a vital role in cultivating the talents in Chinese tourism.

Third, the growing stage. The China Geoscience Tourism Research Society was established in 1992, and the 30^th International Geological Congress was held in Beijing in 1996 and introduced the geoscience tourism to more than 6000 attending geologists from over 120 countries. During this stage, China cultivated the first group of students with master and doctoral degree in geoscience tourism and accumulated theoretical knowledge and talents in geoscience tourism, which laid a foundation for our geological park system and gave the birth of the national geological parks in China.

Fourth, the pioneering stage. China started to apply and construct national geological parks, and the world-class geological parks began to born and grow in China. The China Geoscience Tourism Research Society officially renamed as the Geoscience Tourism and Geopark Research Branch of Geological Society of China in 2005, which served for the tourism in all-around way and paid more attention to serve for sound geopark development. This stage was considered as the milestone for the development of national geological parks in China.

With regard to the route design for geoscience tourism in geological park, Prof. Tian Mingzhong indicated, “it has to reflect the unique features and value of geoscience tourism in this geopark relic and guarantee the security, accessibility, science, distinctiveness, systematicness and sustainability.”

The Development Achievements and Future Direction

According to the introduction to the national geopark construction system from Madam Chen Xiaoning, above all, it is the application and review system. The national geological park carries out the review system of separating the qualification application and granting from designation approval. The application for national geological park requires that firstly the scientific significance of geological relic, secondly the value of science popularization and aesthetics of the geological relic with corresponding publicity, and thirdly a certain scale of geological relic. The procedure mainly experiences three stages including first qualification review, second planning construction and third designation approval. The application unit is reported by the local government of county, municipality and province where the geological park locates every two years, and incorporated into the national geological park planning after access to the qualification with 3-year construction period.

It is known that our geopark construction has gone on a development path for 10 years with rich experience and strengths. China worked together with the UNESCO in 2013 to conduct the training course of national geological park and geological relic’s protection in the African countries.

Madam Chen Xiaoning considered that the main progresses have been achieved in our geopark construction in four aspects. Firstly, the geological relic resources have been effectively preserved. Secondly, the geoscience popularization and research have been promoted. Thirdly, the local economic development has been greatly boosted. Fourthly, the cooperation and exchange at home and abroad have been advanced.

To be specific, geological park construction has effectively improved the preservation of geological relics, economically and intensively utilized the natural resources and provided important place for science research and science knowledge popularization so as to raise the preservation awareness of public ecological environment, develop the tourism with new connotation, build new model of geological work serving for economic society and support local economic and social development.

In the aspect of geological relic’s protection, the geological relics survey and evaluation established the geological relics database, set up the monitoring station in the conservation area, identified the class of conservation areas, strengthened the publicity and education to tourist and surrounding residents to decrease human damages, repaired and restored the landscapes of geological relics to decrease the natural weathering destruction and stipulated a number of local regulations and standards for geological relic’s protection.

It is informed that over 300 geological parks across the country has currently carried out the educational activities of geological science. The geological parks now have become the science research bases of universities and colleges and other research institutions, with over 200 science research and education bases established, over 8000 volunteers recruited, and the industry insiders publish their papers and conduct communication activities, which advances the geoscience popularization and research. All geological parks own their websites with Chinese and English versions, which has strengthened international communication and established friendly relations and cooperation. Sisterhood relations has been established among the geological parks, and up to now, there are 48 pairs of sister geoparks.

Every geological park is obliged to preserve the relic and share experience and achievements together to advance science research and improve the influence and reputation of geological park and geological relics. Build the best model for the regional sustainable development through experiences shared with each other and bring benefits to the local place to achieve common development and all-win situation. (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.

NDRC Supports international cooperation of China’s mining

Source: www.mlr.gov.cn  Citation: www.agkyb.com  Date: October 27, 2015

The National Development and Reform Commission (NDRC), Canadian Embassy in China and the Natural Resources Canada (NRCan) jointly held the tenth session of the Recommendation and Introduction to China-Canada Mining- Cooperation Promotions (China-Canada Mining Investment Forum).

During the meeting, the relevant officials from Department of Industries, Department of Foreign Capital and Overseas Investment and Department of International Cooperation under NDRC with officials from Canadian five provincial governments had in-depth exchanges of views on the current situation of international mining industry, international capacity cooperation, associate requirements of new energy in mining industry and related issues. The two sides also exchanged views on the improvement of Chinese enterprises’ power supply and infrastructure, lower taxes, labor permits and other issues.

In another related development, on the eve of conference, Mr. Li Zhongjuan, vice inspector of NDRC also had an in-depth exchange with Mr. Heidi Brock，President of Aluminum Association, focusing on the opportunities and challenges of global aluminum industry, the excess capacity of domestic electrolytic aluminum industry, tax policy of aluminum international trade, aluminium industry carbon emissions and other issues.

The relevant officials from NDRC’s Department of Industries, Department of Foreign Capital and Overseas Investment, Department of International Cooperation, the Canadian Embassy in China, NRCan, British Columbia, Newfoundland and Labrador, Saskatchewan, Quebec, and Yukon, and nearly 200 business representatives attended the meeting. (Liu Xiaohui)

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.