The Tenth Five-Year Plan of the Mining Industry and its Development

The mining industry is composed of ferrous metals, non-ferrous metals and non-metal mining and dressing industries.

The world's mining industry echoes the trend of trade globalization. Therefore, China's metallurgy industry will be developed on the basis of a stable supply of iron ore resources and an optimal allocation of mineral resources in the global context. Making the best of "the two kinds of resources (domestic and overseas)" will be a long-term strategy of China's metallurgy industry.

Specific measures include stable supply channels, multinational policies, diversified trading models, such as common trading and long-term contracts on buying mines, as well as encouraging companies to jointly operate mines with overseas companies. On one hand, China should pursue the maximum economic benefit; on the other hand, a competition pattern with comprehensive elements through various channels and by different means is also necessary.

China's coastal and middle and downstream Yangtze River areas enjoy convenient shipping conditions. However, these regions lack domestic iron ore resources. Companies in these areas may better import iron ore. While inland companies are mainly dependent on domestic iron ore, with imported iron mines as a supplement, inland companies should determine their scale and production level according to their resource conditions.

Technical innovation can be conducted in ideal domestic iron mines to boost production capacity and benefits. Mines with favorable resources and production conditions may be subjected to new construction models to support their continuing operation.

-- Major policies and measures:

To enhance macro control by economic, legal and administrative means; when appropriate to amend industrial polices to comply with the demand of development and trend of science and technology; to accelerate the formulation and amendment process of current standards, statutes and regulations; to establish a market-management system gradually guided by standards, statutes, regulations and other technical and economic means; to build an effective and standardized market admittance and withdrawal mechanism.

To reduce the mineral-resources tax of integrated mine complex to the level of independent mines; to reduce tariffs on imported iron ore; to lift taxes on exported metallurgical products; to study such problems as regulatory taxes of backward products and to find solutions in cooperation with the financial and taxation departments.

To support "dried-up" mines by offering preferential policies on production conversion funds, closedowns and bankruptcies. Since domestic iron ore, chromium ore and other resources are not adequate, steel companies are encouraged to invest overseas and run mines cooperatively with their foreign counterparts.

Non-ferrous metal mining and dressing industry

1) Guiding principles

To accelerate structural adjustment, with the market as its orientation, economic benefit as the focus and advanced technology as the driving force; major efforts go to developing mineral raw materials, properly adjusting and controlling gross output, exploring the two markets and making full use of the two kinds of resources and cultivating big company groups that are competitive in the world market.

2) Planned objectives

Adjustment and control of gross output: In 2005, the expected gross output of 10 kinds of non-ferrous metals under adjustment and control will be eight million tons (1.7 million tons in copper, 3.5 million tons in aluminum, 900,000 tons in lead, 1.7 million tons in zinc, 60,000 tons each in tin and antimony, 12,000 tons in tungsten and 60,000 tons in rare-earth oxide).

Product mix: Amount of copper in the copper ore concentrates: 550,000 tons; aluminum output: 6 million tons; lead and zinc ore concentrates should maintain the current output.

Company organizational structure: Cultivate one or two big company groups that are competitive in the global market after combination and restructuring. Set up eight to 10 regional groups with a comparative edge. Until 2005, the output of each top five companies in copper, aluminum, lead and zinc should account for 75, 60, 50 and 65 percent of the gross output respectively.

3) Major tasks

-Structural adjustment of the industry and products:

In terms of the copper industry, the development of mineral raw materials should be given top priority; take full advantage of domestic and overseas resources to increase raw-material supply; develop new domestic mines and opt for an additional production capacity of 100,000 tons of copper concentrates; overseas resources should be fully tapped by signing long-term supply contracts, or investing in overseas mines, and establishing stable raw-material supply bases in other countries and regions.

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