Business / Industries

Chinese mining seeks investors

By Wang Qian in Kunming (China Daily) Updated: 2012-07-18 11:36

Chinese mining seeks investors

Villagers search for ore on a slag heap in Beiya village, Heqing county, Southwest China's Yunnan province, in February 2011. [Photo/China Daily] 

Increasing numbers of private and foreign investors with money and technology will come to Yunnan province to unlock the area's rich reserves of minerals and energy sources, a senior official said.

"From 2010 to 2020, another 500 tons of gold and 200 billion cubic meters of shale gas are expected to be found," said Li Lianju, deputy director of the department of land resources of Yunnan province.

To accommodate the booming market for mine exploration, the department allocated nearly 100 mining experts to provide free technical support to qualified private investors who have good reputations and mining experience.

"Whoever invests in the mine exploration will get the profits," Li said.

If qualified private investors do not have enough money, they can apply for a mine-exploration fund from the department, and the profits will be divided according to the initial outlay of the private investor and the government.

Yunnan is just one part of a national strategic campaign started this year to encourage mine exploration and attract private investment.

Peng Qiming, director of the department of geological exploration of the Ministry of Land and Resources, told China Central Television in April the campaign will be conducted in 19 metallogenic regions, and aims to provide resources for China's sustainable economic development.

Beiya mine, where gold and other minerals are dug up in Heqing county in Yunnan, is just one of the main areas operated by the Yunnan Gold and Mineral Group and Asia Now Resources Corp, a Canadian mine exploration company.

Fu Degui, vice-president of the Yunnan Gold and Mineral Group, said the attractive conditions provided by authorities help distribute the risks of mineral exploration.

With the help of experienced experts, Beiya mine has detected more than 151 tons of gold and is expected to detect another 70 tons within 2012, Fu said.

He Zhonghua, deputy chief geologist of the Yunnan Gold and Mineral Group, said the provincial government provides technical support and has a mine exploration fund that can provide nearly 3 million yuan ($476,000) to the group, about 1 percent of the group's total investment in mine exploration.

"We are also a private investor in mine exploration," Fu said, adding authorities offer good opportunities for private investors across the country.

About 56 percent of China's mine exploration investments came from private investors in 2011, according to the Ministry of Land and Resources.

China's private investors are also going abroad to explore mines.

Li said after the economic crisis in 2008, more mining companies in Yunnan are taking part in mining projects in Australia, Canada, Indonesia and Vietnam.

Wang Min, vice-minister of land and resources, told the Economy and Nation Weekly magazine in June that China must find a multi-investment way to encourage mine exploration to reduce its dependence on foreign resources.

According to a national report released by the Ministry of Land and Resources, nearly 57 percent of the country's oil for consumption came from abroad last year and at least 70 percent of its copper was purchased from other countries.

According to an analysis of the existing recoverable and usable reserves of 45 minerals, the ministry forecast that 25 minerals will be in short supply by 2020. Of those, 11 are considered pillar minerals of the national economy.

Xu Shaoshi, minister of land and resources, has previously been quoted as saying that the supply of mineral resources will fall steadily behind China's demand for those materials in the coming 10 to 20 years, greatly taxing the country's mine exploration capacity.

In 2011, the State Council issued a national program of resource exploration, asking local governments to make great breakthroughs in mineral exploration within five years and establish the country's strategic resources reserve bases before 2020.

Besides attracting private capital, exploring deeper will bring potential energy and mineral resources reserves, said Lin Zong, researcher of the Development and Research Center of China Geological Survey.

"Generally we detect resources at a depth of about 500 meters. But in foreign countries, depths of 1,000 to 2,000 meters are very common," Lin said.

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