China Mining Report Q2 2012
Business Monitor International, February 2012, Pages: 70
As 2012 ushers in the second year of China's 12th Five-Year Plan (2011-2015), we expect the changes and reforms enacted in 2011 to continue. Smaller and more inefficient mines will be closed, mid-sized miners will be merged, and the restructuring of the country's mining industry to fit the Five-Year Plan's environmental standards will continue.
The small production losses that will inevitably occur as smaller mines are closed will give way to production gains down the road due to the efficiency gains of bigger, more integrated mining companies. This comes as industry-wide energy efficiency and consolidation measures continue in 2012 as part of China's Five-Year Plan, further improving efficiency and boosting productivity across the industry.
Despite the efficiency gains, overall output growth in the mining sector is seen to be lower than previous years in line with the country's plan to halve metal consumption growth rates by 2015. China's Ministry of Industry and Information Technology plan to decrease annual average growth rates in metal consumption to 7.4% during the periods 2011-2015, as opposed to the 15.5% growth rate experienced between 2006 and 2010. We expect China's mining industry value to reach US$578bn by 2016, an annual average real growth rate of 5.6% from 2010 to 2016. Production growth in the sector will be led by iron ore, bauxite, and copper mining.
We also expect increasing tax burdens on the Chinese mining industry as part of the plan. Indeed, China's twice-delayed resource tax has already been implemented nationwide on November 1 2011. Significant progress has been made in the crackdown on illegal mining, with the government pledging to do more to improve safety. There is an increasing emphasis on the negative environmental impact of mining activities, with the imposition of an environmental tax on certain industries and the introduction of a 'green standard' for the rare earths sector to curb emissions. Cases of smelters, lead plants, or mines that are not up to environmental standards being closed are common place.
The government suspended new prospecting and mining licences for the coal and rare earths sectors to prevent over-mining. Additionally, the Institute of Geological Environmental Monitoring plans to build 10 state-level geological environment monitoring demonstration zones in the north east, north west, north and Yangtze River regions by the end of the 12th Five-Year Plan.
Key domestic players include Zijin Mining, Zhaojin Mining, Shandong Gold, Jiangxi Copper, Datong Coal and Jinchuan Nonferrous Metals, as well as the state-owned entities Aluminium Corporation of China (Chinalco) and China Shenhua Energy. Foreign companies with operations in China include Canadian junior gold explorers Eldorado Gold and Continental Minerals, Australian mining giants Rio Tinto and BHP Billiton and Brazilian diversified miner Vale.
Business Monitor International's China Mining Report provides industry professionals and strategists, corporate analysts, mining associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on China's mining industry.
Executive Summary
SWOT Analysis
China Political SWOT
China Economic SWOT
China Business Environment SWOT
Global Mining Outlook
Key Sector Views
Table: Recent Tax Increases
Table: Largest Coal Projects
Table: Frontier Mining Projects
Industry Trend Analysis
Table: China's Mining Sector - Value And Production, 2009-2016
Business Environment
Table: Asia Mining Business Environment Ratings
Political Outlook
Domestic Politics
Foreign Policy
Long-Term Political Outlook
Industry Forecasts
Tin
Table: Key Tin Projects
Table: China's Tin Production, 2009-2016
Gold
Table: Gold - Largest Expansion Plans
Table: China's Gold Production, 2009-2016
Bauxite
Table: Key Expansion Plans
Table: China's Bauxite Production, 2009-2016
Nickel
Table: Nickel - Key Projects
Table: China's Nickel Production, 2009-2016
Iron Ore
Table: Key Expansion Plans
Table: China's Iron Ore Production, 2009-2016
Copper
Table: Key Expansion Plans
Table: China's Copper Production, 2009-2016
Regulatory Development
Competitive Landscape
Table: Key Company Data, 2010 (US$mn)
Company Profiles
Jiangxi Copper
Shandong Gold
Shenhua Energy
Aluminum Corporation of China
Commodities Forecasts
Gold
Copper
Aluminium
Lead
Nickel
Tin
Zinc
Global Assumptions, Q212
Table: Global Assumptions, 2010-2016
Table: Global And Regional Real GDP Growth, 2010-2013 (% change y-o-y)
Table: Developed Market Exchange Rates, 2011-2013
Table: Emerging Market Exchange Rates, 2010-2013
Developed States
Table: Developed States – Real GDP Growth, 2010-2013
Emerging Markets
Table: Emerging Markets – Real GDP Growth 2010-2013
Consensus
Table: BMI And Bloomberg Consensus Real GDP Growth Forecasts, 2011 And 2012 (%)
Business Environment Ratings Methodology
Table: Mining Business Environment Indicators
Table: Weighting Of Components
- Jiangxi Copper
- Shandong Gold
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