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Mr. Song Xin: China becomes the leader of the world’s gold market

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

Despite the impact on the gold industry exerted by the continued downturn in the global economy had exceeded expectation, the reporter got the latest information from the Mining Development Summit Forum of CHINA MINING 2015 that the performance of China`s gold industry in the economic winter did not show any weaknesses.

Mr. Song Xin, general manager of China National Gold Group Corp and the president of China Gold Association expressed his opinion in his speech on Oct 22^nd. He said, in recent years, with the fact that the global economic slowdown, gold prices downturn, resource constraints and increasingly fierce situation of market competition, China`s gold industry has achieved leap development of a whole industrial chain including exploration, mining, smelting, trading, design, processing, consumption and investment.

"In 2014, China`s gold output reached 451.80 tons and became the world`s largest gold producing country for 8 consecutive years. With annual gold consumption of 886.09 tons, China once again became the world`s largest gold consumer. " Song Xin said. At the end of 2014, the country had found gold reserves of 9816.03 tons, ranking second in the world.

At the same time, the integrated technique of complex ploy metallic refractory gold concentrate developed by China independently had reached the top level in the world. In the field of geological exploration, deep mining, gold purification, Jewel crafting we also made new breakthroughs. With the improvement of market function, a variety of trade category, expansion of the trade scale and increase of participants，the international influence of China’s gold industry continued to expand.

Song Xin was proud to say that, instead of a follower, China had grown into a leader in the world`s gold industry. We had already possessed the basis and conditions to move to a higher level. However, he also expressed his own concern on the future development of China`s gold industry. And to the current situation of China`s gold industry and gold companies, he put forward his own views on how to adapt to the new normal, seize new opportunities and promote new development.

Challenges and opportunities

"To figure out the challenges and opportunities in the development of the gold industry is the foundation of better formulating measures to promote scientific development." Song Xin said the current situation of the development of gold industry was still grim.

First, the world economic environment was still relatively complicated. The world economy was still in a deep adjustment period, with low growth, low inflation, low demand and high unemployment, high debt, high foam and other risk intertwined, the main economic trends and policy orientation continued to differentiated. And the uncertainty of economic environment was still significant. With prominent geopolitical factors, the global economic environment was still relatively complex. Under this kind of international circumstances, opportunities and challenges were intertwined.

Second, with downward pressure on China’s economy building and deep-seated problems in development surfacing, the health foundation of our economy was still same as usual. On the other hand, China was still in an important period of strategic opportunity during which great progress could be made in development. Our country’s development had enormous potential and huge resiliency, and we had ample room for growth. In the face of mounting downward economic pressure, we exercised targeted regulation to keep the economy growing steadily. In the past three quarters, the economic growth had met the expectations of the target, the main economic indicators had been picked up and structural adjustment had continually advanced. With the improvement of agricultural situation, the development of energy had increased. At the same time, the economic downward pressure on China’s economy had continued to mount, andsome enterprises faced a lot of difficulties in their business operation, such as the structural contradictions of the shortage of new power in economic growth and the pullback of old power.

Third, the road to gold industry growth was full of difficulties. With the dollar strength, a new normal of gold prices running low would be very common in the next few years. Since the beginning of this year, the price of gold had fallen 4.23% year-on-year; copper products prices had fell 15.31% year-on-year. Some newly built projects faced double squeeze of rising costs and declining benefits. With increasing financial, cost and benefit pressure in the gold industry was huge. Some leading gold companies had to face the difficulties, such as tight cash flow and rising debt rate.

"In the face of difficulty, we should be clearly aware of the opportunity for the development of the gold industry at the same time." Song Xin said, especially for the current economic downward pressure, the state introduced a series of new strategies and policies, so that China`s economic development presented a new trend and features.

Firstly, the development strategy of the “Belt and Road” Initiativehad built an important stage for the development of gold industry. Most countries along the“Belt and Road” Initiative were mostly emerging economies and developing countries, with a total population of about 4.4 billion people and about 21 trillion dollars of the total economy, accounting for about 63% and 29% of the world’s population and economy respectively. With the total gold reserves of 21000 tons, accounting for 41.5% of the world`s total reserves, these countries possessed abundant gold mineral resources and consumer demands. In 2014, the total national gold production of these countries was about 1116 tons, accounting for 35.6% of the world`s total output. There were six of the world`s 20 largest gold mine in this region. In the same year, the jewelry consumption amounted to 2025 tons, accounting for 82.4% of the world’s total number; the physical gold investment demand about 778 tons, accounting for 77% of the world’s total amount.

Our country owned advantages of gold exploration and mining metallurgical technology and talents that make highly complementary with the countries along the “The Belt and Road Initiative”. At the same time, the requirements of infrastructure for the development of gold resources were not high, especially in the initial period of implementation of the "Belt and Road” Initiative strategy. Under the circumstance of no electricity and transport, relying on diesel generator and a simple mining road, we had already achieved infrastructure construction and production to show a leading role. The implementation of the "Belt and Road”Initiative strategy would bring new historical opportunities for China’s gold industry.

Secondly, a series of national policies such as transformation of the mode and the adjustment of the structure had brought a broad space for the development of gold industry. Our country is still in an important period of strategic opportunity, which has a brilliant future. The implementation of effective national policies such as Internet Plus strategy, "Made in China 2025" plan, urbanization and promotion of equipment going global and international production cooperation etc. will release a huge dividends of reform. In particular, the Internet Plus strategy and Intelligent Manufacturing strategy for the gold industry would break the traditional technology and innovative marketing model to promote the industry transformation and upgrading, and create a new space.

Thirdly, the national policy supported for the gold industry continues to increase the national policy support for the gold industry continues to increase, which had created favorable conditions for the rapid development of the gold industry. The State Council continued to implement the policy of streamlining administration and delegating more powers to lower-level governments. The relevant departments and local governments had accelerated the approval rate of gold mining project, simplified the relevant procedures, and provided convenience for the construction and development of gold mines. The implementation of " Measures for the administration of the import and export of gold and gold products " had explicit declared and relaxed the eligibility restrictions of the import and export qualification of gold and gold products. All of these provided a good external environment and favorable conditions for the development of gold enterprises.

Seven measures to overcome the difficulties

"Gold is a special product with double attributes of both commodity function and currency function. Gold is not only material wealth, but also the means to store wealth. It is the material basis of modern credit money and the most faithful assets." Song Xin said that in a special state, the gold even equaled to strategic resources to resolve the crisis and keep the security.

"In the new era, with a more important mission, gold is responsible for enhancing credibility for internationalization of the RMB." Song Xin revealed that China recently released the latest data of national gold reserves for four times. Figures showed that, with an increase of 654.4 tons, China`s gold reserves reached 1708.5 tons at the end of September this year, compared with the total amount of 1054.1 tons released at the end of April 2009.

" All of these strategic layout and major initiatives are our country’s proactive steps to strengthen the credit basis of the RMB internationalization, which can be seen, the state attaches great importance to the gold reserves." Song Xin said that under the new circumstance, we should take effective measures and actively respond to international and domestic changes in the macroeconomic environment. For the purpose of promoting the sustained and healthy development of China`s gold industry, we should take the whole picture into consideration but do the job bit by bit.

Firstly, we had to take the early advantage of gold industry in the strategy of the “Belt and Road” Initiative to strengthen the joint with other countries and accelerate the pace of industry’s “going global”. Under the strategic framework of “the Belt and Road”Initiative, gold industry as the leading industry was given priority for in-depth bilateral cooperation in the field of gold exploration, mining, processing, consumption and investment. All of measures and policies had important significance to promote the healthy development of China`s gold industry, enhanced national gold control and built bulwark for national financial security. In the process of gold industry’s “going global”, gold enterprises, especially large group, should learn from each other and work together , summarize and derive the previous experience of “going global” for further development of China’s gold industry. To increase cooperation with the gold resources rich countries, we should promote the project of joint exploration and development of offshore gold resources to build a new pattern of global allocation, development and utilization of gold resources. Meanwhile, we also had to expand the development space of the gold industry from inside China to outside, the national gold control force from the domestic to the world.

Secondly, we had to continue to increase investment in scientific and technological innovation, and further expand the industrial space, focusing on further strengthening the main role of enterprise technology innovation and key role of large-scale enterprises’ innovation. Through the gold industry technology innovation strategic alliance, we would strengthen development and research on common problems encountered in the gold industry, such as new technology application for resource exploration, deep exploration technology and equipment, technology of ultra deep mining’s cooling, ventilation and rock burst, low grade refractory metallurgical resources utilization, containing cyanide tailings filling, tail slag in the comprehensive recovery of valuable elements, for the transformation of gold enterprises from single business mode to multi metal type and multiplicity operation pattern. At the same time, we also should provide technical support to extended field, including gold deep processing and jewelry processing.

Thirdly, we needed to increase the intensity of high-quality resources reservation, scientific and rational development and utilization of resources. Resources were the lifeblood of the mining enterprises, the basic prerequisite and guarantee for the development of mining enterprises. Under the circumstance of gold prices low consolidation, lower appraisals on gold resources and mining, new opportunities would be brought to transformation and upgrading of gold industry and to low cost expansion of resource and capacity integration. All of this might lead to a new round of integration and waves of mergers and acquisitions of gold industry. At the same time, we should make use of our advantages to make intra-industry development more sustainable.

Fourthly, we focused on strengthening the safety and environmental protection work to improve the performance of social responsibility. To fulfill corporate social responsibility and develop green economy was a strategic issue to gold enterprise`s own future and destiny. In the future development, the gold industry must strictly implement the New Safety and Environmental Protection Act and further improve the safety and environmental protection work to achieve the healthy and sustainable development of gold industry. We must firmly implement the instruction made by President Xi Jinping "development must not be at the expense of human life" and always insist on putting workers’ safety in the first place. We had to take strong steps to ensure the implementation of “Three Basic Principles of Safety and Environmental Protection”, increase the major risk management efforts, improve the management system of special rectification education, training, environmental protection, occupational health, emergency rescue and accountability system etc. and build long-term mechanism of safety production and environmental protection.

Fifthly, we took measures on optimizing “five rates”, cost cut and efficiency promotion and cost control, reducing the "five charges" and enhancing the core competitiveness of enterprises in mines. Faced with the challenge of the current and future period of market, the gold industry should make solid progress in self-construction, strengthen management and increase efficiency. We should take into consideration the promotion of organizational management and core competitiveness, firmly grasp the key node in the production process, dig down the efficiency index, establish and improve the system and technical standard of optimizing “five rates” and reducing the "five charges". We would ensure the implementation of fine management to each step of the mining process to constantly improve the cost control of whole industry chain and cost competitiveness of enterprise life cycle. Work had done to implement the investment philosophy of “Never give up optimizing until the last moment.” According to work thinking of “The most effective way to cut the cost to increase the profit is the saving from design” and “The biggest waste is the waste of design.” We channeled great energy into making adjustment in the structure of industry. Our goal is that “Win at the starting line with the smallest input to maximize the output and efficiency.”

Sixthly, we gave attention to talents reserve building to cultivate capable teams of managers and technicians and provide key support for the development of the industry. Enterprise competitiveness not only depended on the objective conditions, such as capital, resources, but also mainly depended on the human factor. Therefore, the training work and the mine geological prospecting had the same significance to enterprises. Gold industry should follow the principles by improving the quality of workers as the core, take various forms to strengthen the staffs’ professional ethics education, business skills, and servicequality toenhance competitiveness. We should also strengthen the training of international talents, in order to meet the needs of the “going global” strategy.

Seventhly, we took timely action to accelerate the integration of gold jewelry industry and high-tech, the transformation and upgrading of gold industry. We seized the opportunity of smart manufacturing, “Internet Plus” action, actively explored the practice of gold e-commerce to drive the innovation in product, marketing, and service mode. We also needed to associate with the companies, which possessed advanced result of technical research and application to build effective mechanism of unifying research and sharing result. We would deepen industrial reform and strengthen the integration of technology to achieve smart manufacturing of gold jewelry, promote industrial and consumption upgrading and enhance the international competitiveness of China`s gold jewelry industry. (Li Ping)

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.

Silk Road Fund leverages mining enterprises “going global”

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

The world economy was undergoing profound adjustment and its recovery lacked drive, which caused a downturn in mining investment. In the CHINA MINING Congress and Expo 2015, some professionals said that the global mining investment field had entered in a wait-and-see state. The downturn of price, rise of mining costs and slow growth of economy had affected the enterprises’ investment decisions in the field of mining.

Despite the fact that the pessimistic mood gained the upper hand during the conference, the different views from some owners of mining enterprises expressed that the next two or three years should be the best opportunity for mining investment. With the downturn of ore price, many overseas mining enterprises market value had shrunk dramatically. Due to the cash flow difficulties, they had to sell their assets at a discount. According to this situation, some nationals and local governments dominated by mining resources would launch more tax preferential policies in the trough.

From a logical angle, this view made sense. Of course, it would naturally recognize by many people in this industry. But the key question was, in the low tide of mining industry, the great scale restriction on mining enterprises financing. We all known that the present stage was a good time to overseas mining investment, but unfortunately, without enough money, perfect opportunities only equaled to helpless encounter. When ore prices strengthened again, pity for the loss of best chance was the only thing we can do.

Fortunately, it was given a new solution to the current dilemma at this conference. Mr. Si Xinbo, deputy general manager of the Silk Road Fund, said that they could provide better choices for Chinese enterprises’ overseas mining cooperation. This seemed to add a warm current to this winter of mining industry. There was no doubt that these words showed a promised future for the present Chinese enterprises.

Domestic and international influence factors for the rise and fall of the mining industry

"At present, the world economy is undergoing profound adjustment, the mining industry is facing many difficulties and challenges. Historical experience shows that the distribution, development and utilization of mining industry are closely related to the world economic pattern." Si Xinbo, deputy general manager of Silk Road Fund said. The development and changes in the international economic situation had an important impact on the rise and fall of the mining industry.

After the financial crisis in 2008, the global economic recovery had been slower than expected, and presented obvious regional differences. The first two quarters of this year, the United States, as the main driving force of global economic growth, its GDP growth rate reached over 3.7%, China had maintained a high growth rate of 7% in the first half. With the implementation of the European Central Bank bond-buying plan, investment plan and other factors, the euro zone gained more support from many countries besides Germany, France. Japan, India and Southeast Asian countries benefit from the decline of oil prices and capital costs, the growth of their economy was dramatic. The African region also attracted more foreign investment，the growth rate remained at more than 80%.

At the same time, some countries were still digesting the high debt, high unemployment and other follow-up impact of the crisis. Some countries also had to face a series of difficulties such as aging population, labor productivity growth slowed down and so on. The euro zone economy was still fragile. The economic growth of emerging markets including Asia, Latin America and the CIS countries fell significantly.

At present, the world economy was undergoing profound adjustment, its recovery lacked drive force, the influence of geopolitics and natural disaster was increasing, the there were a greater number of uncertainties at play. The potential growth factor and market risk were intertwined. This situation would make the global economy to maintain a deep adjustment of the slow growth for a period of time. The development of the global mining industry was also faced with the challenges of insufficient demand, financing obstacles and other challenges.

By the end of the first half of this year, China`s industrial added value continuously rebounded for 3 months. The whole society electricity consumption continued to rise in April, total retail sales of social consumer goods and new consumption maintained rapid growth, real estate sales improved significantly, the overall stability of employment and the income of urban and rural residents growth higher than the GDP growth rate.

"But at the same time, the domestic infrastructure construction is playing a weaker role on the steady growth of economy. Due to insufficient demand from international market, the performance of export is below expectations. The deflationary pressure can not be ignored." Si Xinbo said that downward pressure on China’s economy continued to mount, and we faced an array of interwoven difficulties and challenges.

Over the past ten years, the rapid growth of China and other emerging market economies injected a strong driving force into world economy, resulting the huge demand which had became the most important driving force for global mining boom. Si Xinbo said, under the current circumstance, China`s economy was in a critical period of changing its growth mode. The structure of its economy had been optimized, but the growth rate slowed down. The influence of China and other emerging market economies on global mining industry had been weakened.

He believed that new changes and challenges faced by global mining industry were due to the global and economic growth in the experience of the depth adjustment that the traditional momentum weakened and the new power had not been generated.

Mining investment should pay attention to “Four Major Trends"

"Although the global mining industry will continue in a period of downturn, some prospective trends have been shown in the depth of the adjustment." Si Xinbo said.

Firstly, the downturn in the global mining industry would last, yet there was no sign of improvement. The slowdown in global economic growth, coupled with oil prices dropping to 5-year low, and triggered the commodity prices decline in a row. All of these reasons pushed global mining industry fell to the most severe situation since financial crisis. It was considered that it would continue to fall in the next two years.

According to SNL data monitoring, metal price index fell to 103 points in June from 107 points in March this year. The number of global exploration projects fell to 380 in the first quarter of this year from 418 in the fourth quarter in 2014, and continuously fell to 363 in the second quarter of this year. The global mining activity index PAI reached 44.3 in June this year, near the lowest point of 40.2 during the past 3 years.     

"The growth of global mineral resource consumption has slowed significantly." Si Xinbo believed that the supply of mineral raw materials and processed products transformed from insufficient to excess. There was a common price crisis faced by mineral products, mining assets and mining companies. In the short term, without a clear turning point, the downturn would last for a period of time in the whole global mining industry.

Secondly, the expansion of the mineral geological exploration transformed from the traditional mining countries to the developing countries and regions, which possessed abundant mining resources. Mineral exploration was a process of continuous exploration and discovery. Combined with the overall downturn in the development of mining industry and cost pressures, the attraction of Canada, Australia and other traditional mining countries had significantly reduced in the proportion of global mining investment. The hot spots of mineral exploration and mining investment gradually transformed to the Latin America, Africa and other places.

For instance, in 2014, Canada became the first choice for world`s ten largest mineral exploration enterprises. At the same time, the exploration of deep sea, high altitude and polar mineral was becoming more and more popular. Under this circumstance, higher requirements were put forward to the better cooperation of the capital, technology, equipment and the whole industry chain.

"Expanding the scope of mineral exploration provides the basis and confidence for the recovery of the global mining industry." Si Xinbo said, with the global economic situation gradually improved and the integration and upgrading of the mining industry, the overall performance of the global mining industry should be improved in the next two to three years,

Thirdly, the mining area of social responsibility and environmental protection standards were increasingly stringent which heightened the technical threshold and cost pressures of mining investment cooperation. Traditional mining operations often accompanied by environmental problems. While with the change and adjustment of the global economic growth mode, the demand of changing the quality and efficiency of mineral resources development and utilization was continuously increasing.

"This means that the threshold of investment in the mining industry will be higher and the cost will increase at the same time. This situation will promote the global mining industry to develop to a new stage, which based on the mechanism for selecting the superior and eliminating the inferior. Return on investment and efficiency will be the first criterion." Si Xinbo said that in the field of investment, large multinational banks and investment institutions gradually focused on their social responsibility and environmental protection. Necessary attention should be paid on the future development of international mining development. The relevant investment cooperation also should attach importance to fulfill their social responsibility and take action on environmental protection in the framework of income and risk analysis.

Fourthly, the industrial downturn accompanied by the loose regulation, which prompted the mergence and reorganization more active in international mining areas.

"Severe market situation brings more pressure on the mining industry, but also provides more demands and opportunities for integrated restructuring." Si Xinbo said the large international mining companies preferred to use asset acquisition and restructuring to optimize the capital structure, improve the quality of operations and reduce operational risks.

SNL statistics showed that in the first quarter of this year, there were 23 deals of the global mining mergers and acquisitions and the number of second quarter is 35. The total sum of first quarter of the global mining mergers and acquisitions related to metal resources is $2.93 billion and in second quarter increased 2 times, the total sum over 6.5 billion dollars.

"In order to contain the economic downturn and improve their mining industry’s competitiveness, some mining countries take measures to amend the law, adjust taxes, speed up approval and other measures to improve their investment environment, showing a new trend of loose regulation in the mining industry." Si Xinbo believed that the change of market environment and policy background created new opportunities and space for optimizing the allocation of mining resources and investment cooperation.

Experts explain the "Silk Road Fund" functions

China`s Silk Road Fund was the adaptation of global and China`s economic growth mode transformation trend. It was dedicated to the common development, mutual benefit and win-win of all countries along the “Belt and Road initiative”.

"The situation of global economy is still not optimistic; the pressure of recession is still existing in many industries including mining. Countries need to strengthen coordination and cooperation in the fields of trade, investment and finance to be able to ride out the storm and seek common development. As an important part of economic globalization, there is no exception for China. " Si Xinbo said.

Silk Road Fund was established under the background of China’s the “Belt and Road” initiative, and the trend of global and China`s economic growth mode transformation and cooperation pattern upgrade. Si Xinbo said that the Silk Road Fund was willing to provide many better selections for Chinese enterprises overseas mining cooperation.

First, positioning of the Silk Road Fund

On November 8, 2014, President Xi Jinping delivered a key speech at a dialogue meeting on strengthening connectivity partnership and announced that China will commit 40 billion U.S. dollars to establish a Silk Road Fund, which was to finance connectivity programs in countries along the "Belt and Road". The new Silk Road Fund would be used to provide investment and financing support to carry out infrastructure, resources, industrial cooperation, financial cooperation and other projects related to connectivity for countries along the "Belt and Road". According to Xi, the goal of the new Silk Road Fund was to "break the bottleneck in Asian connectivity by building a financing platform."

Therefore, the Silk Road Fund had the following features:

Firstly, Silk Road Fund, which was to finance connectivity programs in countries along the “Belt and Road” initiative. It was aiming at promoting a more equitable and balanced model of partnership, achieving mutual benefit and win-win with other countries, providing financial support and financing platform for cooperation in a wide range of related areas and laying a solid foundation for long-term and stable development of world economy. Secondly, instead of pursuing short-term profit, it was a long-term development and investment funds. In particular, it was willing to provide financial support to the long investment cycle projects, which based on the facility, energy resources, industry and financial cooperation. Thirdly, it was mainly based on the equity investment, supporting enterprises to transform from the EPC based project contract to the identity of the shareholders to conduct the depth participation of the project, through strengthening the control of the project and improving business management to achieve real international business. Fourthly, it could be flexible to provide credit for the formation of financial support, which was conductive to the enterprise in accordance with the characteristics of the project and the transaction structure to properly arrange the optimal financing institution. Fifthly, instead of being an aid or policy funds, it was commercialized management based on market operation. Following the market rules and requirements and maintaining sustainable, it could bear its historical mission preferably.

Second, investment philosophy of Silk Road Fund

a). The Silk Road Fund’s investment operation was based on cooperative principle of developing dialogue and planning with other countries at the same time. The “Belt and Road” initiative followed the concept of peaceful cooperation, openness and tolerance, mutual learning and mutual construction. Silk Road Fund would be used to provide investment and financing support to carry out infrastructure, resources, industrial cooperation, financial cooperation and other projects related to connectivity for countries along the "Belt and Road", through cooperation to achieve common prosperity.

b). Silk Road Fund’s investment operation also insisted on the efficiency principle of pursuing long-term reasonable investment return. Built as a joint-stock company, Silk Road Fund’s related operation must be in the pursuit of long-term and reasonable return on investment, which was responsible for the investor and the foundation of equal cooperation and win-win basis with other market subjects.

c). At the same time, Silk Road Fund’s operation also adhered to the principle ofcomplementary advantages and win-win cooperation to other financial institutions at home and abroad. Silk Road Fund followedboth of Chinaand receiving country’s law and regulation, complying with the international rules of the market and the international financial order, paying attention to the green environmental protection and sustainable development, respecting other domestic and foreign financial institutions business to offer more richer choices for enterprises and projects in diversified investment and financing ways. In the blueprint for jointly promoting the healthy and stable development of the global economy, the Silk Road Fund and other domestic and foreign financial institutions had built a partnership based on complementary advantages, cooperation and win-win basis.

d). Silk Road Fund’s investment operation also insisted on the principle of providing equal opportunities to every investor. Silk Road Fund was an open and inclusive institution, welcoming both of domestic and foreign investors to participate in the project. After operating for a period of time, it also considered to open more opportunities to investor, or cooperate on a sub fund level with whether multilateral institutions or various types of industrial investment and investment institutions. Silk Road Fund would open the mind to find suitable opportunities for cooperation, and with these institutions work together for contributing to the development and prosperity of the region and to the world.

Thirdly, the investment direction of Silk Road Fund

With the purpose of jointly building business and share ideas, Silk Road Fund mainly provided support to carry out infrastructure, resources, industrial cooperation, financial cooperation and other projects related to connectivity for countries along the "Belt and Road". Si Xinbo said that except above countries, other countries and regions as long as suitable for Silk Road Fund investment projects could also be considered to provide investment and financing support. Geographic location was not considered as strict restrictions.

Si Xinbo said, the Silk Road Fund would continue to support enterprises with strength to cooperate with each other, focusing on sharing the experience, high technology and advanced production capacity of China`s industrialization and modernization, promoting the common development and prosperity of the relevant countries.

At the present stage, Silk Road Fund focused on the investment in infrastructure industries including transportation infrastructure and public facilities; energy and resources industry including oil and gas, new energy and mining development; production capacity and technical cooperation industry including large complete sets of equipment, industrial base and introduction of high technology, and financial industry cooperation for overseas mergers and acquisitions of financial and services to Chinese enterprises to go global.

Silk Road Fund escorts mining overseas expansion

“Silk Road Fund is a ship, which has set sail in the sea of “the Belt and Road” initiative; Silk Road Fund is a bond which is committed to promote the organic combination of industry and capital. Under the premise of mutual benefit and win-win, Silk Road Fund also is a good partner to jointly promote international investment and cooperation in mining industry. ”Si Xinbo said.

Firstly, the fund could play a unique role in focusing on investment of “the Belt and Road” initiative. Silk Road Fund was a special investment and financing mechanism established by China to support “the Belt and Road initiative”, focusing on providing investment and other projects related to connectivity for countries along the "Belt and Road initiative". With short decision-making chain and effective decision-making, it would conform to the trend of the global mining industry’s development; promote Chinese enterprises and countries along the route to carry out more in-depth and diversified investment and cooperation.

Secondly, the Silk Road Fund could play a role in enhancing mutual trust and investment leverage. Mining industry was typical capital-intensive industry. With high investment in geological prospecting, mining, production, processing and other aspects of the mining industry, transaction amount of mining trade and investment ranked on the top of the international trade statistics.

“Silk Road Fund as a state-backed professional investors, with a high level of credit and financial strength, was able to provide necessary capital support to mining development, mergers and acquisitions for the enterprises or projects, increase credit, promote the maturity of project, achieve financing conditions and promote the project to implement as soon as possible." Si Xinbo said, for the capital operation of mining enterprises’ mergers and acquisitions, the Silk Road Fund could play a role of the professional financial investors and become a reliable business partner.

Thirdly, Silk Road Fund could make effort to dampen economic cyclical changes and stabilize the market. The supply chain and investment environment of international mining had a very strong correlation with the economic situation of every country. With its own characteristics, investment in mining needed large amount of money, long investment cycle. And it was difficult to steer and benefit. The cyclical fluctuation in the industry was the main problem faced by investors.

“Compared to the general investment institutions, Silk Road Fund as a mid-to-long-term investment fund, its investment period attaches great importance to the long-term reasonable return and longer than usual mode. Therefore, the Silk Road Fund can across the development of the industry cycle, have higher tolerance on short-term financial volatility. It can help enterprises to deal with periodic pulse of the market ups and downs and achieve long-term and stable development. " Si Xinbo said this was the rarest financial investors to the mining industry.

Fourthly, the Silk Road Fund could play a synergistic role in a variety of investment tools for flexible combination. "Mining production and investment is usually accompanied by a more complex transaction structure. The design of investment and financing model are the two issues of crucial importance of the project`s success or failure." Si Xinbo introduced that Silk Road Fund’s main pattern of investment was equity investment. Meanwhile, it also provided all types of investment loans, debt, mezzanine capital, sub-funds and other patterns of investment. It was one of those rare investment institutions could take all types of investment tool to carry out capital investment. It would try its best to meet demands from every party to better cooperation between mining enterprises and projects investment and financing. For the purpose of achieving maximum benefits, Silk Road Fund designed plans in targeted ways and build the most reasonable structure of cooperation.

Fifthly, the Silk Road Fund also had an effect on improving the efficiency and adding value. In practice, some countries or international organizations would promote the development and utilization of mineral resources in the way of capital investment. But most of this investment was policy oriented, with the essence of assistance, it often difficult to achieve long-term sustainable.

Si Xinbo said, on the basis of complying and cooperating with every country’s development planning, Silk Road Fund adhered to market-oriented operation. The professional investment team established by Silk Road Fund had the ability to participate in mining cooperation, both as investors with high credit and financial advisor with professional quality. It helped enterprises to accurately grasp the direction of development, effectively reflect to the market signal, improve corporate governance, optimize the investment and financing plan, promote enterprises’ combination of macro development strategy and micro market efficiency, and increase the long-term value.

Sixthly, the Silk Road Fund could play a leading role in capital and industry. Mining economic development as the basic resources of economic development, with numerous upstream and downstream industries, it had long industrial chain. Silk Road Fund could play an exemplary role by virtue of its many advantages, including mid-to-long-term equity investment mode severed as main invest mode, vast areas and more flexible forms of investment.

Si Xinbo said Silk Road Fund would continuously make effort to lead and catalyze social capital and international capital to invest in mining areas under the background of the “Belt and Road”initiative. It also could help relevant enterprises to develop from the mining areas further to the upstream and downstream of the whole industry chain. Silk Road Fund would commit to find more potential and valuable investment opportunities to achieve accumulation effect of “1 plus 1 greater than 2”. (Li Ping)

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.

Belt and Road Initiative opens opportunities for Chinese gold miners

Source: www.chinamining.org         Citation: Xinhua        Date: October 26, 2015

The China`s Belt and Road Initiative will bring a historic opportunity for the country`s gold miners as low gold prices are expected in the coming years, said Song Xin, general manager of China National Gold Group Corporation.

Addressing at Mining Development Summit Forum of CHINA MINING Congress and Expo 2015 held in north China`s Tianjin Friday, Song said the next few years will see global gold prices remain low while costs for the gold mining industry rise.

But the "Belt and Road" will provide an alternative platform for growth, as countries along the route have a combined natural gold reserve of 21,000 tons, accounting for 41.5 percent of the global gold reserve, said Song. The world`s six largest gold mines are located in countries along the "Belt and Road."

Chinese gold miners have an edge in exploitation, which is complementary with the "Belt and Road" countries that are rich in gold reserves, he said.

"This is a new historic opportunity for Chinese gold industry," said Song.

The Belt and Road Initiative refers to the Silk Road Economic Belt and the 21st Century Maritime Silk Road, which were proposed by Chinese President Xi Jinping in 2013 with the aim of reviving the ancient trade routes.

The network passes through more than 60 countries and regions with a total population of 4.4 billion. 

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 22^th-25^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.

Interpretation of resource management policy by officers of Ministry of Land and Resource

Source: www.zgkyb.com   Citation: www.agkyb.com  Date: October 26, 2015

Reportedly, CHINA MINING Congress and Expo 2015 held several forums for the introduced policies in aspect of promoting mining right reform and related supporting system construction, mining right supervision service, dealing with the relationship between ecological civilization construction and resources development and protection by the Ministry of Land and Resource, and unscrambled as well as answered the relevant questions.

Mr. Yao Huajun, Director of Dept of Mine Development and Management under MLR, introduced relevant policies on non-oil management and service. Yao showed that the total amount of mining right in China has declined in recent three years. The total number of mineral exploration right was 33,000 in Jun, 2013, while with a 2.9% decline, this number was less than 30,000 by this June. Mining right number had decreased from 280,000 in 1990s to 77,000 this year. Sorted by mine type, Gold, Copper, Plumber, Iron and Coal ranked as the top five referring to its amounts.

Yao also indicated that, aiming at the reform and improvement performance of the future resource management system, mining right system of examination and approval will be deepened and that with high gold content will continuously be adjusted according to its mine type, 2+1core system model should be formed on mining right, mining right unified supporting system should be upgraded and optimized, service and regulatory function of regulatory system should be strengthened .

Mr. Yu Haifeng, Director of Dept of Mineral Resources Reserves under MLR, showed some policies about mining right supervision and performance management and highlighted on Mining right prospecting and exploitation information publicity system. Yu indicated that the disclosed content in this new system includes the supervision information grasped by government. Administrative department will take some disciplinary punishment according to the abnormal business listings and serious illegal list management information in the new system. This system will be implemented as a pilot project on Jul1,2016, at the provincial level and will be launched comprehensively in cities and counties across the country in 2017.

Mr. Zhao Xianliang, Director of Strategic Research Center of Oil and Gas Resources under MLR, explained some relevant policies about China’s oil and gas resource management. Zhao expressed that the top-level design of oil and gas resource management and reform has not been introduced yet, it’s still in exploring, but the reform focused on oil and gas resource management has been explored in aspects of open tendering of conventional oil and gas, exploration qualification reform of oil and gas and reform of taxation expenses.

Mr. Yan Gang, Deputy Director of Dept of Cultivated Land Protection under MLR, gave an introduction of provisions related to the mining land cover project management.

The related department head of the ministry of land and resource answered questions put up by participants. ( 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.

Chen Jinghe: the current situation and future of China’s mining industry under the new normal economy

Source: www.zgkyb.com   Citation: www.agkyb.com  Date: October 26, 2015

Editor’s Note:

Where you are in is determined by your location, where you’ll go by your angle, what you’ll see by your level, and what your future is by your attitude.

The “new normal” of China’s economy and the “winter” of China’s mining industry gave a dual influence on these mining industry leaders who suffered. How will they regard the current situation and think of the future?

Mr. Chen Jinghe, president of Zijin Mining Group Co., Ltd., believed that though “winter” brings challenges, the new normal can give birth to big opportunities.

Four years ago, Chen had warned the coming of mining industry’s winter, which had already become a truth. He predicted that the minerals price would continue float on the current price, the price of certain kinds may have a further glide and rebound later. However, this rebound phenomenon still couldn’t bring the “Golden Ten Years” glory back again.

As a member of the mining industry, Chen jinghe admitted that a sober understanding of the current economic and mining situation and a more fully estimation of the difficulties would be a safer performance. In his view, slack demand and low price of the minerals is the new normal of the mining industry. What mining companies should do is to have a solid skill and control the costs rather than complain the market as nobody can drive the market. Besides, in this clod winter of mining industry, it’s necessary to reform and adjust the management system and many other measures that formed in the peak time. Survival is the first, development comes later.

Chen had confidence in the future economic development and the mining prospect. He said that in the new historical period, mergers and reorganization between mining companies will become increasingly active. Under the guidance of One Belt And One Road strategy, width and the strength of China`s mining enterprises’ participating in the global mining market will be further increased. China`s mining enterprises will become one of the most active powers in global mining market and thus will lead to a certain degree of change of the global mining pattern.

Perhaps Chen’s opinion couldn’t be accepted by all the insiders, however, we must admit that in this mining winter period Chen Jinghe, as one of the leaders of our major mining enterprises, leaded enterprises starting from themselves to face the challenges and seek for breakthrough in the crisis. His thinking and practice for development should be affirmed.

So did this happened in reality as what he said. There is no big change in the development strategy of Zijin Mining Group under the new normal. “Reform, economic growth and development” is still the main guideline in Zijin Mining Group’s future development, internationalization is the main direction of the group in it’s new round of development and capital spending and operating cost control is the main work.

In order to get a wider range of transmission of this positive voice across the whole industry, we published Chen’s full speech at the 2015 CHINA MINING Congress and Expo as a reference.

It’s my honor to stand here in the CHINA MINING Congress and Expo 2015 to talk about China’s mining industry with you all. What we’ll discuss today is a really heavy topic as we are in a “winter” of the mining industry now, in which whoever related to mining industry can feel the chill and would suffer from. The common concern is, how long will this winter last? Is it the coldest time now? What’s the current situation and future of China’s mining industry? I’ll show my personal views as follows.

1.mining industry’s winter in the new normal

1.1   Weak demand greatly affects the mining industry in the new normal

“The new normal” is one of the often-used phrases in the Internet related to economy and in different medias. That China has stepped into the “economic new normal” has become a common sense in the market, which is the stage feature of China’s economic development. During this phase, the economic growth has decreased from a high speed to a high-middle speed, and the tertiary industry has become the main force taking place of the secondary industry. Growth pattern has changed as well, from a growth of amount that consumes vast resources to the growth of quality that driven by innovation, from investment pulling to consumption pulling.

The high speed economic growth has met its ceiling in the past 30 years. The generation in which amount produces growth and money has gone, leaving surplus a common economic phenomenon in this new normal. Among them, the real estate market had a significant influence on Chinese economy, especially on the metal materials industry.

In terms of the bulk commodity as the metal, it’s production and consumption amount in mainland China has accounted for 40%~50% of the whole world. China has created many of the world’s first, this huge consumption formed a super cycle for bulk commodity that lasts for more than ten years. People were crazy about mining in the past and lots of investors made their fortune overnight. Such high profit attracts heavy investment which gradually result in over capacity. The minerals price began to fall, or even slump three years ago and lead to an extremely difficult situation for mining industry now, in which investor are trapped. Coincidentally, there’s a real lesson that the once flourishing coal industry decayed from a fat profit to a total loss.

The population of mainland China consists of 20% of the world population and the minerals produced and consumed surpassed double of the global average share, which means it’s far from possible to pull a larger global demand growth only by Chinese market. Though China still has a certain demand growth for the bulk commodity. The growth rate and amount are significantly slowed down. This status of demand growth will remain exist in a relatively long period of time.

1.2   price swings in three to five years and a continuous glide

Four years ago, I warned the coming of mining industry’s cold winter at the China Prospectors Annual Meeting, on which many peers don’t agree. However, it has become true unfortunately with some minerals’ price keeping declining since 2012 and thus lead to a overall collapse.

National bureau of statistics shows that the mining industry profits has presented a yearly decline and the decline range has expanded year bu year since 2012, with a 17.34% decline rate in 2013, 23% in 2015 and 57.3% in the first eight months this year. At present, mining enterprises are experiencing a very serious management condition. Predictably, the “four mines” problem repeatedly called on by he ex-minister Zhu Xun will reappear.

Many peers have been looking forward that the minerals prices could return to the orbit of rapidly rising as what happened before, a quick realizing of a ‘V’ type inversion in 2009 after the financial crisis in 2008, which seems unrealistic now. I though that the minerals price would continue floating on the current price, the price of certain kinds may have a further glide and may rebound later. However, the “Golden Ten Years” glory could never come back again.

As a matter of fact, many mining enterprises has further expanded their production to control unit cost when there’s a price collapse and a continuous losses. For example, in the iron industry, though the price has slumped about 70%, some international iron giants that possess resource and cost advantages continued to increase their production. Hence, even if the price slump has leaded to many high-cost mines’ shutting down, it’s still not easy to reduce the market supply, as its an obvious case of the current iron ore concentrate and coal production. It needs a much longer time than we expected to achieve a reasonable price return through sharply reducing the capacity and output.

1.3   With the deficiency of China’s mining industry, survival is the primary target.

Compared with other peers in the world, China’s mining industry faced more difficulties and problems.

First, the mineral resources in China is small and medium-sized in general with low quality. What’s more, it’s hard to exploit those resources, to acquire the mineral right and to coordinate the relationships among land, woodland, environmental protection approval and the local government. Besides, mining industry marketization degree is not high, the overall system is relatively rigid, enterprise are in small size and large amount, the large ones are not so strong as it should be. Most of the burden is heavy, the debt ratio is high, the cost is high, in the face of mining the cold winter, the lack of response and effective measures. With heavy burden, high debt ratio and high cost, most enterprises had nothing to do when facing this cold winter in mining industry.

Second, China`s mining economy is a vassal economy, state-owned mining still accounts for absolute advantage. It is a major characteristic to control mineral resources by regionalism. Even in very difficult current mining circumstances, mergers and reorganization is rare. That to sell all the apples when they are bad is not a good idea.It’s a better choice to solve the problem of mining under the market laws.

Third, China’s bulk minerals resources enjoyed a poor endowment condition and a high external dependency. 56% iron ore, 83% copper, 83% bauxite and 57% crude oil need to be imported. At present, it’s a truth that many small and medium-sized mining enterprises with high cost in China has closed down, even though the dominant mineral, the coal, whose production ranks first in the world, is trapped under the impact of the low-cost mines overseas.

As a member of the mining industry, it would be safer if we have a sober understanding of the current economic and mining situation and a more fully estimation of the difficulties. Slack demand and low price of the minerals is the new normal of the mining industry. What mining companies should do is to have a solid skill and control the costs rather than complain the market as nobody can drive the market. Besides, in this clod winter of mining industry, it’s necessary to reform and adjust the management system and many other measures that formed in the peak time. Survival is the first, development comes later.

2. The new normal gives birth to big opportunities

2.1    Active factors in the crisis

There’s no doubt that China’s economy will keep growing at a high speed in the next decade.Even a 5% growth is pretty good under the background with a big economic base. According to some relevant calculations,the main minerals demand will continue to maintain a certain growth, but the growth rate and growth amount will significantly slow down to 2025.

As we can see, with the economic growth and especially the speeding up of industrialization, emerging markets economics, such as south east countries, India and countries along the “One Belt And One Road”,will become the major regions in which there’s an increased demand of the new minerals. With the gradual recovery of economy, the western developed economies’ demand for mineral raw materials will have a certain growth.

Quite a number of the current commodity prices are near the cash costs. In recent years, a majority of comprehensive cost of the new or upcoming new capacity is much higher than the product price and those capacities fell into a state of the mine production losses or even a collapse because of its huge capital expenditure and construction investment. With the disappearance of the costs red line and the high cost capacity, minerals price has a limited space for downside.

In the new historical period, mergers and reorganization between mining companies will become increasingly active. Under the guidance of One Belt And One Road strategy, width and the strength of China`s mining enterprises’ participating in the global mining market will be further increased. China`s mining enterprises will become one of the most active powers in global mining market and thus will lead to a certain degree of change of the global mining pattern.

2.2   Some excellent enterprises are qualified for the global mining industry competition.

Chinese market and it’s minerals production and consumption has made an important contribution to the global economy and the development of mining industry. China`s mining industry has made great progress as well. With the "going out" of China`s mining enterprises, China has become one of the important members in the big family of global mining industry.

Many Chinese enterprises failed and got some lessons when they took the policy of “going out” at the high time of market bubble. However, we shouldn`t blame these pioneers as it’s never been so easy to succeed. And international mining giants would also make the same mistake, many international mining companies mining suffered a huge financial and Provisions losses.  For example, an international mining giant bought an ore deposit with $4 billion in 2011 and sold it with just $50 million three years later, this is the market!

We should see that China`s mining enterprises have already had a considerable scale and level, some enterprises have had the basic capability for competing in the market of global mining. In the aspect of innovation and application of advanced mining development technology and the cost control, in the aspect of the development and utilization of low grade and difficult mineral intergrowth resources and in the aspect of exploiting small complex ore deposit mining, Chinese mining enterprises have been in the international leading position in some areas and have created a lot of myths in mining exploitation. What the China`s mining industry currently lack of is the international operations personnel and experience, which could only be solved through practice.

2.3   “Going out” is the hope of China’s mining enterprises future development

China has an overall excessive exploitation of mineral resources, a low maintain reserves and a low per capita ownership level. most of the mining company just developed domestically with a very limited space and a bigger difficulty.

At present, the global mining market is in its downturn, quite a number of the mineral resources and mining companies’ value is severely undervalued. Mining companies with strength and ability should take this opportunity to boldly take the policy of "going out” and to participate in the cooperation and competition of global mining market. this is the hope of the future development of China`s mining enterprises. China is the world`s second largest economy and the world`s largest minerals market. During this period, if we haven’t cultivated transnational mining groups that have important international influence, this will be a great failure in mining industry!

Over the past decade, Chinese commodity has gone global. With the speeding up of the process of RMB internationalization in the future, China`s capitals’ fully entering the global capital market is just around the corner. China`s mining companies and investment funds will take this great opportunity to comprehensively and deeply cooperate with international mining enterprises to promote global economic growth and the revitalization of the mining market.

3. New action under the new normal

3.1   Government should know their responsibilities and obligations

Currently, many of the regulations related to mining are promulgated at the peak time of mining industry, which work well on disciplining the market order and following the relevant laws at that time. However, these regulations have an excessive strictly examination and approval process, which limits the access of mining right and market circulation. Cumbersome procedures and a considerable time in completing a full mining licenses will put bigger constraints on the marketization of mining industry. In addition, in the mining industry profitable period, state and some relevant provinces introduced many harsh tax policies. Some local government regarded the mining right the same as the land, even the basic conditions acquired by the application for the exploration right were also replaced by bidding procedures. All these has gone against to the healthy and benign development of the mining market.

In recent years, the State Council has taken a major reform of examination and approval matters, for example, the National Development and Reform Commission and the administration of industry and commerce decentralized many rights and introduced many convenient provisions on project examination and approval, the enterprise registration management and mergers & reorganization in the hope of activating the market that through decentralization. We expected that the mining related management department and the finance and tax departments could complete the related reform as soon as possible to warm the mining companies and help them ride out the storm.

3.2 Focus on the difference between the background anomaly and the environmental pollution and regulate mine environmental well

Ensuring environmental security is the bottom line that mining enterprises must stick to. Zijin Mining Group had made a mistake in this regard at the price of a huge losses and had learned a lesson. We should see that, in the past 20 years, China`s mining enterprises’ progress in mine environmental protection is huge, the government`s regulation of environmental protection is extremely harsh and the regulatory supervision is more severe than that in overseas in some aspects.

Here I want to say that the discovery of mineral deposits is mainly by the anomaly of water, stream sediment, soil and rock elements, which is now called "heavy metal pollution” in terms of metal. While actually, we should strictly distinguish the difference between the “heavy metal anomaly” in the natural background and “heavy metal pollution” caused by human exploitation, especially in the phase of reconnaissance, in which the geological work is very important. As far as I know, the so-called “heavy metal pollution of soil” that often appears in the media should be the one that formed in the nature, which is also called as background anomaly. We hope our geological and mining industry peers and regulatory departments can attach great importance and pay attention to the difference between the background anomaly and environmental pollution caused by development, otherwise the whole mining industry will suffer from "an accident", in which everyone should be blamed. Furthermore, we also hope that the relevant departments could learn the advanced environmental management experience of overseas to improve the scientific supervision level.

3.3   Strongly support the mining enterprises to “go out”

The proposing of “One Belt and One Road” pointed out the direction of "going out" of mining enterprises and created a good policy environment for the internationalization of China`s mining enterprises. I wish that the government can provide more policy and financial support to enterprises that went out. For example, provide convenience capital market financing channel to these "going out" enterprises, use plenty of foreign exchange reserves to provide cheap funding for overseas mergers and acquisitions and project construction for the enterprise, at the same time provide more convenience in terms of project examination and approval.

We should learn from advanced international counterparts humbly and combine our own advantage with the objective conditions in the project location in strict accordance with international advanced standards and attaches great importance to the harmony development of community coordinated. Enterprises participating in the overseas investment should make full use of all the advantages and strength in all aspects, uniting to compete in the market to avoid vicious competition.

3.4    Industry association should become a shelter for enterprises to keep warm

As an Industry Association in mining industry, China Mining Industry Association and other relevant associations play a positive role under the mining industry cold winter. In terms of policies and regulations and related taxes and dues, seriously listening to the views of enterprises, actively and systematically reflecting the current situation and demands of the mining industry to the relevant government departments, building a good mining development environment to provide mining enterprises in this cold winter with a shelter to keep warm.

3.5    Zijin Mining Group is willing to develop hand in hand with all the peers.

My dear leaders, colleagues and collaborators, thanks for your full supports to the development of Zijin Mining Group!

Under the new normal, there’s no big development strategy changes in Zijin Mining Group,  internationalization is the important even the main direction inthe new round of development. We focus on some large mature metal mining projects such as gold and copper etc.We are very willing and attaches great importance to the cooperate with large mining companies in home and abroad.

Zijin Mining Group carried huge pressure of business when facing the slump of metal prices.  “Reform, economic growth and development” is still the main guideline in Zijin Mining Group’s future development, internationalization is the main direction of the group in its new round of development and capital spending and operating cost control is the main work. minerals gross profit margin in Zijin Mining Group is higher than most mining companies, which means a strong ability to resist risks. We are still full of confidence when facing the future!

The domestic development of Zijin Mining Group is successful in the past 20 years. Overseas development is the key to the future. The company will continue to be in accordance with the thought and model of innovation and be fully in combination with the practical situation to solve the difficulties and problems existing in the company`s internationalization process. We are very willing to work with counterparts and investors hand in hand resisting mining winter and welcoming the mining spring! (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.

Significant improvement achieved in China’s utilization of mineral resources

Source: www.zgkyb.com  Citation: www.agkyb.com  Date: October 26, 2015

The Comprehensive Utilization of Mineral Resources Forum had been annually held for 5 years. It aimed to create communications for advanced mining technologies, facilitate information sharing, strengthen technological innovation and application and improve resource utilization. The Comprehensive Utilization of Mineral Resources Forum 2015 was pluralistic, at which guests had made speeches and different views and experiences had been shared and exchanged.

Basic Situation of Mineral Comprehensive Utilization in China

Mr. He Bingqing, Vice President of Chinese Academy of Land and Resources Economics introduced the comprehensive utilization and progress of mineral resources in China from utilization efficiency, development potential and policies.

Thanks to 10 years of development and progress, the utilization efficiency of mineral resources in China had improved significantly, especially in energy consumption for unit GDP according to statistics. On one side, it reflected the progress of China’s utilization efficiency of mineral resources and its great success of economic restructuring. On the other side, it showed that despite current increasing depth and difficulties of mining, the comprehensive mining recovery rate in China had steadily increased 4.8% and its land mining recovery rate remained over 96%. In addition, the utilization efficiency of tailing had also increased gradually. 

It was said that the Chinese Academy of Land and Resources Economics has set a goal to improve the comprehensive utilization efficiency of national metal tailing to 20%and it was expected to be able to accomplish this goal.

In terms of development potential, China had great potential in the comprehensive utilization of mineral resources due to its rich reserves of low-grade mineral resources and mineral tailings. It can be seen that China has ushered in a new era of secondary resources recycling.

In terms of policies, comprehensive utilization of mineral resources had been listed as one of the top priorities in the Strategic Action Plan for 2011-2015 by Ministry of Land and Resources. Since the 18^th CPC National Congress had put forward the ecological civilization construction, resource conservation and comprehensive utilization of resources had been highlighted in policies including Suggestions for Strengthening Ecological Civilization Construction and the Ecological Civilization Master Plan, to promote a fundamental change in resource utilization. In addition, comprehensive utilization of mineral resources had been included by each department in policies and programs including energy conservation and emission reduction, recycling economy and promotion programs. In recent years, the ministry has made a comprehensive selection and promotion of advanced technology, and summed up and promoted over 210 advanced technology. As of the end of last year, the ministry has amended and improved some important measures to promote the efficiency of comprehensive utilization of resources. 

Thus, China’s focus on mining industry had shifted from mineral exploitation to resource conservation and intensive utilization.

Difficulties in Rational Evaluation on Mineral Reserves

With the iron ore price dropped 60% than early 2014, the net profit of four global mining giants including Rio Tinto, BHP Billiton, Vale, FMG in 2014 decreased over 85% according to their 2014 Earnings. Mr. Wang Huili, director of Technical Services Department of Deloitte commented that mining industry belongs to manufacturing sector whose PM2 hovered around 50 in recent 2- 3 years due to slowdown economy. It indicated that investors lacked of interest in mining industry. To some extent, it also indicated that it would be pragmatic to improve the comprehensive utilization of mineral resources.

According to Mr.Yu Haifeng, director of Dept of Mineral Resources Reserves of MLR, Ministry of Land and Resources had introduced comprehensive utilization project of mineral resources, initiated comprehensive utilization demonstration sites and made survey on mining recovery rate,ore dressing recovery rate and comprehensive utilization rate of 22 major mineral resources mining project. The minimum target for rational exploitation of 22 mines had been issued and 210 advanced technologies for mineral exploration and comprehensive utilization had been selected. All these effort had propelled China’s comprehensive utilization of mineral resources to a new era.“At present, the fourth selection of advanced technologies for comprehensive utilization of mineral resources has just been completed, which aims to promote and guide mining enterprises to adopt advanced technologies to improve the efficiency of mineral resources and to improve ecological civilization construction”, said Yu.

Currently, low technology transfer and penetration, poor access to information, small investment in R$D and small application scale as well as insufficient commitment of companies hindered the application and dissemination of advanced technologies. It also indicated that China is in urgent need to accelerate the promotion and application of advanced technologies,Yu noted.

Mr. Feng Ansheng, director of Zhengzhou Institute of mineral comprehensive utilization at CGS, said that China’s s coal resources exploitation are mainly based on underground mining. It held high energy consumption despite its high recovery rate  beyond 80% which is far beyond many developed countries, due to its focus on low value-added products, such as L2,L3 and L4 products.

Though a great progress in utilization of associated minerals has been made, China still faced challenges including improving the utilization efficiency of waste rock and mineral tailings and the quality of gold mine.

Information technology was efficient for resources conservation and intensive utilization, but some mining companies in China encountered many problems in the application of the technology in recent years, including how to apply the technology to achieve financial integration, centralized procurement, and reduce procurement costs. Thus an integrated model was in need to help these companies to break  development bottlenecks.

Mr. Wang Huili proposed that it is important for mining groups to clearly define duties of the whole group and each business department as most mining companies in China are big groups with various businesses covering mines exploitation, smelting, processing and mechanics. In the process of information technology application, some groups and its business departments weren’t clear about each others’ duties and responsibilities thus caused messes. So groups and other business departments should be clearly defined and separated with duties and roles.

Madam Ma Ailing, chief engineer of Beijing SD Science & Technology Development Co., Ltd. pointed out while some factors could be easily learned and managed in the mining process,, some factors couldn’t not, such as the evaluation of invisible and intangible mineral reserves. “It is difficult to make a evaluation on reserves and comprehensive utilization of mineral resources because it concerns both the amount and the division of resources reserves and it is very difficult to define the division.”, said Ma.

Mineral resources was the core of the whole mining chain, and a rational evaluation on mineral reserves was of vital importance to the exploitation and utilization of mineral resources. Only with a rational evaluation, was it possible to get aware of mineral resources comprehensively and objectively thus to carry out more effective macro-management regulation. It was in contradiction with exploration requirements that most mining companies expected to gain maximum return with minimal investment. To solve the problem, advanced techniques and methods should be adopted for scientific exploration and for comprehensive and reasonable mineral reserves evaluation.

“Reserves calculation and industrial index are inseparable but industrial index are based on market and mining companies.” said Ma Ailing, “It is in need to further verify the reasonableness of current industrial index. In additional, a comprehensive evaluation on associated minerals should also be taken account of in the reserves calculation, as associated minerals are scarce minerals and inadequate exploration may directly adversely affect the following comprehensive utilization of mineral resources.”

Solutions: Advanced Technologies

Yu Haifeng noted that widespread application of advanced technology is a fundamental way to realize rational and efficient exploitation and utilization of resources. It was also an importance measure to carry out innovation-driven development strategies thus to accelerate the transformation of mining industry. Thanks to mining workers and researchers, China had developed a batch of advanced technologies in the exploitation and comprehensive utilization of oil, gas, coal, metals and other important mineral resources in recent years and emerged a number of enterprises excel at advanced technology research and development. These achievements had contributed to the utilization and efficiency of mineral resources.

“The essence of revitalizing resources through technology mainly refers to the reuse of low-grade minerals and there are a number of demonstration sites and companies, such as the Zijin Mining Group ”said He Bingqing. He further explained that China is rich in various and rich mineral tailings and it has great potential to make comprehensive utilization of them. Recently, it had seen a growing momentum for comprehensive utilization of mineral tailings. There were two reasons: firstly,   materials for recycling were expanded due to advanced technologies; secondly, growing land imposition cost urged companies to reduce tailings emission as tailings dams covers a large amount of land.

In additional, with the fast upgrading of products, the life cycle of a product had been shorten just to a decade, which provided great opportunity for secondary metal recycling. The scrap metal recycling would help to reduce the consumption of new mineral resources. And with the recycling of “urban mines”, China had ushered in a new era of resources recycling.

It is also the national strategy to develop advanced mining technologies, said He Fayu, deputy general manager of Science & Technology Management Dept of China Minmetals Corporation.“Ways for the separation of lead and zinc in China can be divided into selective flotation, bulk flotation and combined process and bulk flotation are generally adopted. The comprehensive utilization of lead and zinc tailings and safe disposal are similar to other most metal tailings in China. “He said, “The recent 30 years has witnessed the great progress of our lead-zinc separation technologies, mining recovery and resources comprehensive utilization. Though Chinese enterprises who begin develop overseas lead and zinc minerals are left with low-grade lead and zinc resources as global mining giants have taken up high-grade ones, our advanced lead and zinc mining technologies can fully support their overseas business.”

Most of China`s mineral resources were underground minerals. With the development of large-scale blasting mining technology, new advanced technologies had taken place of outdated technologies and great progress had been made in large-diameter hole and ground pressure monitoring. New technologies would focus on the combination of mining and separation.

At the same time, technical standards for comprehensive utilization of mineral resources had been improved and further strengthened mineral evaluation. The 22 regulations covering energy, non-ferrous metal, ferrous metal and nonmetallic ores issued by Ministry of Land and Resources marked the initial development of China’s major mineral resources system and laid technical basis for further supervision of national mineral resources.  

Technical Indicators and Methods for comprehensive utilization of Mineral Resources issued by Ministry of Land and Resources in March,2015 provided technical manual and guidance for comprehensive evaluation on energy conservation and comprehensive utilization in China. Demonstration sites had also been established. In 2011, the Ministry had initiated the construction of 40 mineral resources sites of mineral resources comprehensive utilization. By the end of 2014, investment from central government had reached RMB15 billion and investment from enterprises reached nearly RMB1 trillion. Nowadays, the demonstration sites has achieved great breakthrough in comprehensive utilization technologies and developed a series new energy conservation models. As estimated by the Ministry of Land and Resources, these demonstration sites had achieved great breakthrough in 8 major technologies and developed 9 new energy exploration and industry development models, successfully advanced the upgrading and transformation of mining industry in China.

He Bingqing proposed that government should also take measures to accelerate and advance the mineral resources conservation and intensive utilization. Measures to promote advanced technology application, standard construction, supervision and management as well as other incentive measures should be taken to lead and encourage enterprises to participate in and play their roles in the market and to strengthen international cooperation, so as to improve our mineral resources conservation and intensive utilization to a new level. ( 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.

Over 1000 1: 50000 regional geological maps firstly available on CGS website

Source: www.zgkyb.com   Citation: www.agkyb.com  Date: October 26, 2015

In CHINA MINING 2015, delegates were cheered by China Geological Survey’s announcement that it would release more than 1000 1: 50000 regional geological maps in batches on its official website to provide online service for public. It was China’s first release of such a scale geological maps. 

As one part of China’s nationwide basic geological works, the 1: 50000 regional geological survey works aimed to investigate basic information of mineral,stratum, structure, magmatic rocks in the region and paved way for geological prospecting.

A batch of geological survey results and geological service information was published by China Geological Survey at the conference. 110,000 geological data service catalogs about mineral resource potential evaluation and basic geological information of each province and 93 latest marine basic geological maps were firstly published. Geological drilling database published online was expanded to 400,000 on the basis of 50,000 released last year.

Officers of China Geological Survey indicated that the 1: 50000 regional geological online map and 40,0000 important geological drilling data released online was a combination of Internet and geology. It made a big breakthrough in proving medium and large scale maps online. They wereChina Geological Survey’s major measures to share and make efficient use of geological information as well as to improve its public service capacity.

It is China Geological Survey’ responsibility to arrange and carry out unified, basic, strategic geological and mineral explorations for the public and provide geological information services. Amid the new normal state of China’s economy, China Geological Survey Laid more emphasis on geological information service and would continue to enlarge its service content, expand the scope of information service, extend service level and provide a coordinated online and offline service.

During the conference, attendance could obtain and store geological data catalogs about minerals potential evaluation and basic geological information of each province and latest marine basic geological maps via CD-ROM or U disk and may apply to National Geological Archives for more detailed data. The official website (www.cgs.gov.cn)of  China Geological Survey provided online searching, browsing and downloading services.( Written by Zhangli / Liu Ya)

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.

Four overseas mining acquisition funds jointly established

Source: www.zgkyb.com  Citation:www.agkyb.com  Date: October 26, 2015

CHINA MINING 2015 witnessed the establishment of three mining funds and signing of a series strategic cooperation agreements by mining giants including Beijing International Mining City, Beijing International Mining Exchange, Sprott Group and Shandong Zhaojin Group. Mr. Zhong Ziran, Director of China Geological Survey, attended the signing ceremony.

The International Mining Value Discovery Fund was jointly initiated by Shandong Zhaojin Group, Sprott Group and Beijing International Mining City to mainly invest in precious metals in countries including Canada, the United States and Australia and securities of listed company relating with non-ferrous metal minerals.

BMZJ (Beijing Mining City and Zhaojin Group) Short-term Mining Financing Fund was jointly initiated by Zhaojin Resources, a subsidy of Zhaojin Group, Beijing International Mining Exchange and Beijing International Mining City Capital Management, a unit of Beijing International Mining City. With a total fund of RMB 5billion, the Fund focused on providing short-term financing backed by mining right, equity or asset, to domestic mining companies that own high quality asset and are in need of financing but are not capable for bank loan.

ZJSH(Zhaojin-Shenghua) Overseas Resources Acquisitions Fund was jointly initiated by Zhaojin Resources and Shenghua Capital Management, one of Beijing International Mining City’s capital operating platforms. With a planned scale of $5billion, the fund had raised its first asset of $500million. The fund would focus on overseas non-ferrous metal and precious metal mineral projects and companies. Coordinating with other funds of the two companies, it would take advantage of the sluggish mining industry and make mergers and acquisitions of overseas high-quality mining projects as well as provide asset for domestic mining companies to make overseas mergers and acquisitions.

Zhong Ziran indicated that China is not only a big source of demand for mineral resources but also a big investor now. He affirmed the cooperation model between Sprott Group and Beijing International Mining City and welcomed foreign mining-oriented capital management companies like Sprott Group to establish long-term strategic partnership of mutual trust with China’s mining companies and to boost China`s economic growth and help China’s mining companies to expand business overseas. 

Mr. Peter Grosskopf, CEO of Canadian Sprott Group, proposed that Sprott Group would be happy to make open cooperation and establish long-term strategic partnership of mutual trust with China’s mining industries.(Liu Aiying / Pei Lei)

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.