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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.
In terms of lead and zinc mines, raw materials are also inadequate. Moreover, most of the rich ores have already been developed, while the untapped ones are scare in resources. Therefore, with regards to the shortage of resources, the amount of newly built lead and zinc smelting companies, as well as the expansion of existing company production capacity should be under strict restraint.
In terms of other non-ferrous metals, China should maintain the current production level of nickel. As for the nationally preserved mineral resources and traditional exported metals, such as tungsten, tin, antimony and rare-earth, they should be rationally preserved and exploited according to the domestic consumption situation and proper export demands.
In terms of new non-ferrous metals, resources like rare earth, niobium, vanadium, titanium, tungsten and antimony will be further exploited, especially rich resources.
-Structural adjustment of the techniques:
Promote advanced and applicable techniques; establish a set of industrialization demonstration projects; spread techniques, such as trackless mining in pits, pre-selection and discarding of waste, smashing, not grinding (for the sake of energy conservation) and multi-section grinding in dressing plants, and intensified smelting; enhance scientific research, development and technical innovation; improve the potential and comprehensive utilization ratio of resources.
-Structural adjustment of regions:
Bring the comparative advantages of non-ferrous metal mineral resources and energy resources in the mid and western parts of China into full play; accelerate the exploitation of mineral resources in those regions. Encourage companies in Eastern China to invest in developing mines in the west. Utilize overseas resources as much as possible.
-Structural adjustment of Organizations:
Continue to carry out the reform of non-ferrous metal companies; implement the strategy of large groups organizing various big company groups; increase production centralization; extend the industrial chain of non-ferrous metal; cultivate a set of gigantic companies that are competitive on the global market.
4) Polices and measures
-Enhance the work of geological prospecting; focus on prospecting and discovering mineral resources, including copper, lead and zinc; venture into the deep and surrounding parts of existing mines; increase reserves and service time of the resources; explore new mines.
-Support the development of mines in the mid and western parts of China. At present, most of the large copper, lead and zinc mines that are applicable are located in these areas. To keep a reasonable proportion of domestic mines in the mineral raw materials, preferential policies are offered to support the development of mines in the mid and western parts of China.
-Make full use of overseas non-ferrous metal resources, mainly copper, aluminum, lead and zinc; encourage domestic companies to establish raw material-supply bases in countries rich in non-ferrous metal resources.; through various channels, such as venture prospecting, investing in mines, signing long-term supply contracts and contract construction, increase the supply volume of copper, lead, zinc concentrates and aluminum.
Non-metal mining and dressing industry
The non-metal mining and dressing industry is a large category in the nation's economy. It includes the mining of marble, granite, waste materials and other stone stock for building; mining and dressing of clay, scree, gravel, quartz, sand, ferrous sulphide, sulphur, phosphorite, guano, natural alkali, natural mirabilite, natural saltpeter, alunite and arsenic; and mining of lake salt, diamond, vermiculite, porcelain clay, bentonite, and pearlite.
1) Focus of development
The chemical mining industry has played an important role in the national economy. It is an industry that gives strong support to the infrastructure industry, pillar industries and national defense. Thus, it should be developed continuously during the Tenth Five-Year Plan period.
Mostly, there are 11 backbone chemical mining bases (i.e., six phosphorite bases, three ferrous sulphide bases, one kalium mine in Qinghai and a boron mine in Liaoning) to be managed to increase the resource utilization ratio and to improve product quality; encourage mines with favorable conditions to be transformed from single, raw material production to raw material production and downstream processing.
Expected output of major products: In 2005, phosphorite mine output will reach 28 to 30 million tons; ferrous sulphide output will reach 12 to 13.5 million tons.
2) Major policies and measures
During the Tenth Five-Year Plan period, China will formulate strategic exploitation and utilization plans for both strategic non-metal resources, and important internationally strategic resources, such as fluorite, barite, boron mines, strontium mines, barium mines, rare-earth and phosphorite ore; conduct protective exploitation of these resources; exhibit blind excessive exploitation and abusive digging.
Maintain State control on large, high-quality mines, internationally competitive mineral resources and strategic resources. In terms of these resources, while emphasizing the comprehensive utilization and downstream processing, China should strictly restrain their direct export and export of roughly processed products.
Encourage large non-metal companies and groups to compete actively in the global market; adjust the export structure; gradually control and reduce primary product exports, but expand exports of products with high additional value to produce more foreign exchanges.
Open further to the outside world and attract more foreign investment; amend the Catalog for the Guidance of Industries for Foreign Investment; restrain foreign investment on high-tech products less when appropriate if such products will not affect the overall national safety and are in bad demand.
Lose no time to explore overseas resources. This is very important in terms of some resources that are congenitally inadequate but in large demand, such as kalium mines and phosphorite mines; various preferential policies should be offered. Encourage companies to go overseas to invest, build mines and explore resources to offset domestic insufficiency.
Brief survey on China's mining industry
1. Ferrous metal mining and dressing industry
The ferrous metal mining and dressing industry is a large category in the national economy, which is further divided into medium and small subcategories. It mainly involves mining and dressing of iron ores, as well as the exploitation and washing of manganese and chromium ores.
Most of the iron ore resources are located in Anben District of Liaoning Province, Panxi District of western SichuanProvince and Jidong District of Hebei Province. Among the proved iron ore reserves, 97.5 percent are lean ores, with an average iron content of 32.7 percent. Most of the iron ore reserves have already been exploited and utilized.
Over the past decade, the output of domestic iron ores could not meet the demand of the expanding steel production. Therefore, import has been increasing every year. In 2000, the output of domestic crude iron ores totaled 240 million tons, while imported iron ores reached 69.97 million tons. In other words, pig iron produced by imported ore accounted for one-third of the national total.
According to the National Bureau of Statistics of China, total assets of the ferrous metal mining and dressing industry was 31.944 billion yuan in 2000, an increase of 0.80 percent compared to 1999. At the same time, the average balance of liquid assets also increased 1.99 percent on a year-on-year basis to 10.916 billion yuan in 2000. The average balance of net fixed assets was 10.208 billion yuan, a 3.68-percent increase over the previous year. The total amount of employees in the industry was 2,306,000.
With regards to product sales, in 2000, the sales income was 14.460 billion yuan, a 11.2-percent increase on a year-on-year basis, among which cost of sales was 11.093 billion yuan, an increase of 11.05 percent over 1999. In terms of tax payments and the additional value of sales, it reached 406 million yuan in 2000, up 4.01 percent on a year-on-year basis.
In 2000, total profits of the ferrous metal mining and dressing industry was 566 million yuan, and the debt totaled 14.626 billion yuan -- 2.25 percent lower than 1999. At the same time, the 170-million-yuan loss was also 17.08 percent lower on a year-on-year basis. This figure suggests that the industry was starting to make profits.
2. Non-ferrous metal mining and dressing industry
The non-ferrous metal mining and dressing industry mainly involves the mining and dressing of non-ferrous metal mineral resources. The mineral inter growth mining and dressing industry is divided into subcategories according to the major content of the ores. Generally, non-ferrous metals with a gravity higher than 4.5 is called heavy non-ferrous metal.
Since the reform and opening up, China's non-ferrous metal industry has developed by leaps and bounds. The total output of 10 common non-ferrous metals has ranked second in the world successively for six years. Non-ferrous metal is in large demand in China's economy. In 2000, the total output of 10 common non-ferrous metals was 7.75 million tons, among which 1.37 million tons were copper; aluminum, 2.89 million tons; lead, 1.05 million tons; zinc, 1.95 million tons; copper materials, 1.55 million tons; and aluminum materials, 2.18 million tons.
In 2000, the sales income of the non-ferrous metal mining and dressing industry products was 36.340 billion yuan -- up 15 percentage point to 1999 on a year-on-year basis. At the same time, the amount of employees in the industry was 484,700 -- 0.61 percent lower, or 3,100 people less than in 1999. The figures show that under the force of the market, the industry has undergone continuous technical innovations and downsizing for synergy.
According to the National Bureau of Statistics, in 2000, total assets in the industry numbered 54.084 billion yuan, an increase of 10.62 percent over 1999. At the same time, the average balance of liquid assets also jumped 16.2 percent on a year-on-year basis to 19.376 billion yuan in 2000. The average balance of net fixed assets was 24.751 billion -- a 9.9 percent increase over the previous year.
With regards to product sales, in 2000, the cost of sales was 27.589 billion yuan -- an increase of 15.17 percent compared to 1999. In terms of tax payments and additional value of sales, it was 388 million yuan in 2000 -- up 31.66 percent on a year-on-year basis. Total profits were 2.942 billion yuan -- an increase of 21.86 percent on a year-on-year basis.
In 2000, the debt totaled 34.643 billion yuan -- 8.50 percent higher than in 1999. At the same time, the 448-million-yuan loss was 37.07 percent lower on a year-on-year basis. This figure suggests that the industry was about to enter a vicious circle.
3. Non-metal mining and dressing industry
Non-metal mineral products are linked with various industries in the national economy. The industry is also developing rapidly. In 2000, its sales income was 31.443 billion yuan -- an increase of 12.87 percentage points on a year-on-year basis, where the cost of sales was 23.902 billion yuan -- up 12.96 percent on a year-on-year basis. The amount of employees in the industry totaled 551,400 -- 4.65 percent lower, or 264,000 fewer people than in 1999. The figures show the industry's developmental momentum in recent years.
According to the National Bureau of Statistics, in 2000, total assets in the industry were 62.589 billion yuan -- an increase of 4.85 percent compared to 1999. At the same time, the average balance of liquid assets also grew 6.33 percent on a year-on-year basis to 23.135 billion yuan in 2000. The average balance of net fixed assets was 29.023 billion yuan -- a 7.1-percent jump over the previous year. In terms of tax payments and the additional value of sales, it was 733 million yuan in 2000 -- up 8.23 percent on a year-on-year basis. Total profits were 1.014 billion yuan, an increase of 6.94 percent on a year-on-year basis.
In 2000 the debt reached 39.775 billion yuan -- 3.69 percent higher than in 1999. At the same time, the 497-million-yuan loss was 8.24 percent lower on a year-on-year basis. The additional value tax was 1.576 billion yuan -- an increase of 11.72 percentage points on a year-on-year basis. The figures show that the non-metal mining and dressing industry has been recovering and developing.
During January-May 2003, the assets of ferrous metal, non-ferrous metals and non-metal mining and dressing industries totaled 32.172 billion yuan, 57.059 billion and 66.017 billion yuan respectively, up 10.87, 5.26 and 6.93 percent respectively over the same period of the previous year. The sales revenue in each industry totaled 9.687, 19.507 and 15.828 billion yuan respectively -- up 33.47, 31.75 and 20.63 percent respectively over the same period of the previous year.
Total profits in each industry amounted to 0.423, 1.68 and 0.772 billion yuan respectively -- up 106.3, 176.5 and 170 percent over the same period of the previous year. Employees in each industry totaled 0.2403 million -- down 2.43 percent over the same period of the previous year; 0.4413 million and 0.4931 million -- up 0.54 and 0.14 percent over the same period of the previous year.
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