CHINA MINING News

Premier Li springs a surprise on coal mine visit

Source: www.chinamining.org         Citation: China Daily        Date: January 06, 2016

Premier Li Keqiang talks to miners before entering the 300-meter-deep Guandi Coal Mine in Taiyuan, Shanxi province. He praised their hard work, saying the miners are "not only the backbone of Shanxi, but also the backbone of China". Li had an inspection tour in Taiyuan, capital of North China`s Shanxi province on Jan 4-5. [Photo/Chinanews Service]

When 33-year-old Shi Haiqing answered the phone in the safety center at a coal mine in Taiyuan early on Tuesday, he thought the call might be from one of his colleagues reporting on work safety.

But the caller asked: "Can you tell me about the gas density at the position where I am standing now? Can you tell where I am at the moment?"

Shi felt the voice sounded familiar, but lost no time in replying. Taking a glance at the control panel, he said, "The gas density is 0.05 (percent per cubic meter)."

His heart then pounded with excitement after the caller told him, "This is Li Keqiang."

Premier Li Keqiang (3rd R) talks with groud duty staff on phone in the Guandi mine of Xishan Coal Electricity Group Co. Ltd, in North China`s Shanxi province, Jan 5, 2016.  [Photo/Chinanews Service]

The call took place during the premier`s visit to the Guandi Coal Mine in Taiyuan, Shanxi province. After hanging up the phone, Li told the workers that safety is paramount in mining jobs. He also extended New Year`s greetings to everyone at the scene.

Li spent two hours inside the mine, which was founded in 1960 and now has about 5,900 workers. He inspected mine production safety and talked with the workers, learning about their living and working conditions.

The two-day visit to Shanxi is Li`s first trip of the year. Most of his agenda comprises visits to traditional industries such as coal mines and iron and steel works.

The province has relied for decades on developing its rich mining resources. In 2012, about 56.6 percent of its GDP came from the coal mining industry. But an industry slump both domestically and globally has hit Shanxi hard, especially last year.

During his visit to the Guandi mine, the premier asked several times about workers` salaries.

He arrived at the mine, which lies inside a mountain, at 9 am and boarded a small train used to transport the miners. They work 300 meters underground but their work area is 7 kilometers from where Li boarded the train, and the journey took 40 minutes.

Premier Li Keqiang (1st R) rides in a tramcar as he inspects the Guandi mine of Xishan Coal Electricity Group Co.Ltd, in North China`s Shanxi province, Jan 5, 2016.  [Photo/Chinanews Service]

Before getting on the train, Li greeted scores of miners who had just finished the night shift and were about to change out of their dusty uniforms. After a 12-hour shift, the workers, whose faces were nearly half-black with coal dust, stood around the premier.

Li encouraged them to have confidence in the coal market, although current prospects are not looking so good.

"Coal mining still serves as Shanxi`s pillar industry. About 60 to 70 percent of the energy that the country requires for its development comes from coal mines," Li said.

Li Keqiang (1st front) inspects the Guandi mine of Xishan Coal Electricity Group Co. Ltd, in North China`s Shanxi province, Jan 5, 2016. Li had an inspection tour in Taiyuan, capital of North China`s Shanxi province on Jan 4 and Jan 5. [Photo/Chinanews Service]

The coal mining industry is suffering from "certain difficulties" as the global market does not look too good, he said.

"But we need to have confidence that coal will still be the country`s major industry. The difficulties will eventually be conquered," Li added.

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^nd -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: m.balanzskin.com.

China, Pakistan sign financing agreement on coal power project

Source: www.chinamining.org         Citation: Xinhua        Date: December 22, 2015

China and Pakistan on Monday signed a financing agreement on a coal power project located in the Thar Coalfield in Pakistan`s Sindh province. 

The project will cost in excess of 2 billion U.S. dollars, including the exploitation of a 3.8-million-tonne coal mine and the construction of a 660,000-kilowatt power station near the mine.  

China will contribute 800 million U.S. dollars to the financing, while the Pakistani partners will provide 500 million U.S. dollars, mainly through China Development Bank and Habib Bank.  

The project is expected to be completed by the end of 2017, and it will be the first such project in the China-Pakistan Economic Corridor.  

The corridor will be a 3,000-km network of roads, railways and energy infrastructure, between the ports of Gwadar in Pakistan and Kashgar in Xinjiang. It was established to help lift Pakistan out of its economic slumber and boost growth for the Chinese border economy.

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^nd -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: m.balanzskin.com.

Chinese oil trader sees economy benefiting as import rules ease

Source: www.chinamining.org         Citation: chinadaily        Date: November 27, 2015

China is opening up its crude-import market to private companies quicker than expected as the government looks to ease an economic slowdown, according to the general manager of oil trader China Zhenhua Oil Co.

Allowing more private companies to import crude will help independent refiners increase output and boost revenue, China Zhenhua`s Yuan Jun said in an interview. The government`s next move will be to allow more exports of oil products, he said.

"The crude oil market is opening up faster than we anticipated," Yuan said. "By allowing more crude imports, we will see smaller refiners increase operating rates, thus contributing to more fiscal revenue."

Zhenhua, a unit of weapons manufacturer China North Industries Group Corp, has benefited from government reforms over the past decade that allowed smaller companies to import crude directly-loosening the grip of State oil giants such as China Petroleum & Chemical Corp.

As part of a broader plan to revamp State-owned enterprises, the government is also encouraging more private investment in the energy sector.

Smaller refiners, known as teapots, account for almost a third of the nation`s processing capacity and 13 of them have been granted import quotas totaling a combined 55 million tons, or 18 percent of the country`s annual imports. These smaller processors will need help from bigger players like Zhenhua to import crude, Yuan said.

"A sudden flood of dozens of rookie traders into the international oil market could cause huge volatility," said Yuan, whose company will trade an estimated 40 million metric tons of crude and related products this year. Some teapots lack experience buying crude in the international market and may need trading teams to help, he said.

The government may next allow more oil products to be exported, Yuan said. That may help refiners manage swelling stockpiles that follow the move to open the import market, he said.

Zhenhua may apply for an oil product export license by the end of year and is considering taking minority stakes in some local refining and chemical companies.

"After the policy breakthrough, no matter whether you are State-owned or not, we all compete in the same market environment," Yuan said.

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: m.balanzskin.com.

China signals curbs on aluminum output in accord with Russia

Source: www.chinamining.org    Citation: www.bloomberg.com     Date: November 23, 2015

China signaled it`s prepared to curb aluminum production to try to stem oversupply as part of an agreement with Russia.

The Sino-Russian protocol on energy cooperation, signed Nov. 16 by Russian Deputy Prime Minister Arkady Dvorkovich and Chinese Vice Premier Zhang Gaoli, includes a section on bringing aluminum output into line with demand, according to a copy of the document obtained by Bloomberg News. It also supports tie-ups between Russia`s United Co. Rusal and Aluminum Corp. of China Ltd., or Chalco, on developing mining and new alloys, the document shows.

"China is finally ready to review its policy in aluminum and help to stabilize the market after the price declined to the level where all of its aluminum producers are working below break-even," Rusal`s Deputy Chief Executive Officer Oleg Mukhamedshin said in a phone interview from Moscow. It`s "mega news for the industry," he said.

A flood of aluminum exports from China has depressed international markets this year, sending prices to the lowest since 2009 and forcing smelters around the world to reduce production. Rusal may move forward in December with plans to cut its output by 200,000 metric tons while its Kubal smelter in Sweden may be idled, the company said this week.

Exports Peak

The protocol between the two governments includes a "recommendation for optimization of aluminum production in line with demand by Chinese and Russian aluminum industries in order to avoid inefficient use of energy resources," Mukhamedshin said.

The Chinese State Council Information Office didn`t immediately reply to requests for comment. Aliya Samigullina, a spokeswoman for Dvorkovich, confirmed the signing of the protocol and referred to a Nov. 16 government statement on the meeting with China that said the parties welcomed talks to develop aluminum projects.

Russia may offer to build new domestic smelting capacity to supply China as its production is cleaner and more commercially viable than that of the Asian country, Mukhamedshin said.

"That won`t happen now, only in at least three years, when the market will be stabilized and the oversupply issue solved," he said. Rusal and Chalco are working on developing new alloys, which may be sold to China, and they may consider joint projects in bauxite and alumina, Mukhamedshin said.

Chinese exports of semi-finished aluminum totaled about 300,000 tons in October, similar to levels at the start of 2014, according to Rusal. That compares with exports that peaked at almost 500,000 tons in December, a Rusal presentation published this month shows.

Exports of so-called fake semis, or primary aluminum lightly processed to qualify for a 13 percent tax rebate, fell significantly after the issue "had obtained serious attention from the Chinese authorities," Mukhamedshin said.

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: m.balanzskin.com.

China and Russia cooperate on liquefied natural gas project

Source: www.chinamining.org         Citation: chinadaily.com.cn        Date: November 18, 2015

China and Russia are pressing ahead with the Yamal liquefied natural gas (LNG) project in Russia`s offshore Arctic area, according to senior officials.

China`s Vice-Premier Zhang Gaoli said that the strategic partnership between the two countries has continued at a high-level of development and he also pledged both parties to take an active part in the build-up of more flagship projects in energy cooperation.

Zhang made the remarks during the 12th Meeting of the China-Russia Energy Cooperation Committee in Beijing in preparation for the upcoming 20th Regular China-Russia Prime Ministers` Meeting.

During the meeting, both countries agreed to deepen energy cooperation over the construction of an eastern natural gas pipeline as well as projects for western natural gas and Yamal liquefied natural gas (LNG), according to a report by Xinhua News Agency.

In addition, both parties will make sure that the construction of a China-Russia crude oil pipeline goes smoothly and at the same time expand cooperation in the sector of energy equipment.

Earlier reports said that China and Russia are expected to sign contracts for the Yamal LNG project in December.

In September, the $40 billion Chinese Silk Road Fund acquired a 9.9 percent stake in Yamal LNG without disclosing detailed information about the price.

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: m.balanzskin.com.

China, Mideast Gas Use to Overtake Europe by 2035, IEA Says

Source: www.chinamining.org    Citation: www.bloomberg.com     Date: November 11, 2015

China and the Middle East, spurred by lower prices and ample supply, will drive global natural gas demand growth in the next 25 years as consumption in Europe fails to recover to peak levels seen in 2010, according to the International Energy Agency.

Both regions will become larger gas users than Europe by 2035, the Paris-based IEA said in its World Energy Outlook 2015. Global demand for gas, a cleaner-burning fuel for power generation than coal, will rise 1.4 percent a year to 5.16 trillion cubic meters (182 trillion cubic feet) in 2040, making it the fastest-growing fossil fuel. The agency forecast 1.6 percent annual growth to 5.38 trillion cubic meters in last year`s World Energy Outlook.

"With gas prices already low in North America, and dragged lower elsewhere by ample supply and contractual linkages to oil prices, there is plenty of competitively priced gas seeking buyers in the early part of the Outlook," the IEA said.

Gas will account for 24 percent of power generation by 2040, up from 21 percent in 2013, as the share of dirtier coal falls to 30 percent from 41 percent. The fuel is also being used to spare use of oil and back up renewable energy generation.
Price Slump

U.S. futures, used to price contracts for the first liquefied natural gas exports from the shale boom, declined 46 percent over the past year. Exports from the Sabine Pass terminal are scheduled to start early next year, adding to expanding output of the super-chilled fuel from Australia. Brent oil declined 43 percent in the past year, dragging down oil-linked gas contracts.

"These price developments seem set to boost natural gas demand in major importing regions, reinforcing our view that natural gas is a fuel well placed to expand its role in the global energy mix," the IEA said.

Gas demand in the European members of the Organization for Economic Cooperation and Development will remain little changed at 528 billion cubic meters in 2040, rising 0.1 percent a year from a forecast for 0.7 percent annual growth in last year`s report. China`s consumption is expected to rise 4.7 percent annually, the fastest growth among all regions, to 592 billion cubic meters, the report shows. The Middle East will expand gas use by 2.1 percent a year to 738 billion cubic meters.

Coal Demand

Within the OECD, North America is the only region with significant demand growth, the IEA said. In the U.S., the largest consuming country, gas will displace coal as the largest source of power generation by the mid-2020s. By the early 2030s, it will overtake oil as the most used fuel in the U.S. primary energy mix, the report says.

Global coal demand growth is set to slow to 0.4 percent annually, the report shows. Energy efficiency, competition from renewables, and coal in power generation in some countries may constrain long-term expansion of gas, the IEA said.

Gas use could also be curbed if delayed investments amid lower commodity prices tightens the markets in the 2020s, the report said.

"Emissions of methane, a powerful greenhouse gas, along the supply chain will dent the environmental credentials of gas if there is no concerted policy action to tackle these leaks," the IEA said.

Unconventional Gas

While unconventional gas will make up about 60 percent of supply growth, the spread of projects such as shale-gas plays outside North America will be "more gradual and uneven," the report said. Global production of shale gas, coalbed methane and tight gas is set to rise to about 1.7 trillion cubic meters in 2040 from 630 billion cubic meters in 2013.

China aims to boost unconventional gas production to more than 250 billion cubic meters by 2040, the report said. Such growth is less certain amid challenges such as geology, limited water availability, population density in some areas, and regulatory issues related to pricing, the IEA said.

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: m.balanzskin.com.

Focusing on mining development opportunities with “The Belt and Road Initiative”

Source: www.mir.gov.cn      Citation: www.gtzyb.com   Date: November 6, 2015

Photo by Li Zhentao

Geosciences Cooperation Seminar of Countries along “The Belt and Road Initiatives” held on October 20th, 2015 at Tianjin Meijiang Convention and Exhibition Centre During CHINA MINING 2015.

China speeds up “the Belt and Road Initiatives” in 2015, which gives great incentive to global mining industry in depression. During CHINA MINING 2015, it came into one of hot issues as expected that what development opportunities “the Belt and Road Initiatives” will bring to global mining industry.

Many experts analyzed and considered that deeper advancement of “the Belt and Road Initiatives” will surely expand the cooperation space of countries along the belt and road and fully motivate their complementary advantages in resources, market, capital, industry, technology and talents.

With current trend of mining globalization, the strategic prospect of “the Belt and Road Initiatives” indicates sincere cooperation among countries along the belt and road, which will surely convert their advantages in resources into new power to economic growth so as to bring unprecedented new development opportunities to global mining industry.

Abundant and Highly Complementary Resources

According to “the Belt and Road Initiatives”, energy resources will be one of key field where countries along the belt and road conduct their cooperation. There is no doubt that the implementation of “the Belt and Road Initiatives” will provide a new platform for mining cooperation among these countries.

As indicated by Mr. Kerim Tuncer Salikavak, Deputy Director of Administration of Mineral Survey and Exploration of Turkey in CHINA MINING 2015, “‘The Belt and Road Initiatives’ provides new platform for us. Countries along the belt and road are close to each other in history and mutual cooperation is very important.”

Countries along “the Belt and Road Initiatives” boast abundant mineral resource, serving as the main supply base of mineral raw materials, and the position they stood in global economic and social development can be described with the word of “prominent”. The public data show that the mineral resources deposited in this area are nearly 200 types with a value of over 250 trillion dollars, accounting for 61% of the world. Among which, China and Russia own the areas with highest coal reserves in the world; Uzbekistan won the reputation of “the home to gold”; countries in Southeast Asia boast tin-ore belt with a length of 2500 kilometers and also serve as the most famous diamond production area in the world; countries in West Asia possess the largest amount of proven petroleum reserve at present; India and Russia are important diamond production area and the Kursk of Russia is distributed with the largest iron-production basin in the world.

Why do the areas along “the Belt and Road Initiatives” boast so abundant mineral resources? In the afternoon of October 20^th, Mr. Pei Rongfu, Academician of Chinese Academy of Engineering, introduced in public the macroscopic geological background of areas along “the Belt and Road Initiatives” during Geosciences Cooperation Seminar of Countries along “The Belt and Road Initiatives”. “In the four metallogenic zones among global metallogenic units, there are 12 metallogenic areas and belts in the areas along ‘The Belt and Road Initiative’ and a total of 326 large and extra large deposits in all metallogenic areas and belts.”

And more importantly, there is greatly complementary in the cooperation among countries on mineral resources. For example, the minerals and strategic emerging minerals including copper, cadmium and nickel which run short in China exactly are the advantageous resources in other countries along the belt and road. The Central Asian countries with abundant oil and gas resources are relatively weak in exploration development and exploitation ability, which can cooperate with China to a promising prospect and great potential.

Mr. Kyaw Kyaw Ohn, Assistant Director from of Geological Survey and Mineral Exploration Bureau of Myanmar, indicated during CHINA MINING 2015 that Myanmar is rich in mineral resources but relatively backward in traditional development means. “At present, further mineral prospecting and development will be conducted in East Myanmar. We are amending relevant laws and provisions to attract foreign investors and expect to import advanced technologies and methods to help Myanmar to resolve difficulties encountered in mining development.”

This situation is very common. China is geologically adjacent to the Southeast Asia and mutually connects in geological structure. The Southeast Asia locates at the southern extend belt of “three jiang” metallogenic belt in southwestern China and metallogenic belt of South China, featuring with favorable metallogenic conditions, abundant mineral resources, but low level in mineral prospecting and development. Therefore, “Developing geoscience cooperation between China and countries in Southeast Asia is conducive to deepening the understanding in metallogenic rules of areas and better advancing the sustainable development in regional mining economy.” Dr. Mr. Lin Fangcheng from Chengdu Geological Center of China Geological Survey said.

An Extensive Prospect with Growing Enthusiasm on Cooperation

With the market economic condition of reciprocity and mutual benefit, taking full advantage of and integrating all strengths in resources, capital, talents, technology and equipment are attractive to global mining industry remaining in deep adjustment. Before the opening of CHINA MINING Congress and Expo 2015, relevant news came in a row that countries along “the Belt and Road Initiatives” take active efforts into the advancement of mining cooperation.

The first non-governmental think-tank on mining cooperation of “the Belt and Road Initiatives” was established in China and the enterprises and institutions can access to reserves, output and development situation of over 50 kinds of mineral resources in 65 countries along the belt and road. The first Cambodia state geological laboratory will be built in the Guangxi Zhuang Autonomous Region, and the first Private Entity Fund on “the Belt and Road Initiatives” mineral resources and related industry officially launched in Beijing, aiming to raise 10 billion yuan before the end of this year…

Currently, many countries along the belt and road have realized or personally experienced that the construction of “the Belt and Road Initiatives” in post-financial crisis will able to share dividend of reform and development in China and convert their strengths in local resources, technology and capital into the market and cooperation advantages. For this purpose, countries carry out cooperation in mining of “the Belt and Road Initiatives” along the extremely high enthusiasm

During the recent Northeast Asia Mining Cooperation Conference under China-Russia Expo 2015, delegates from countries including Russia and Mongolia got together in Harbin to share their achievements in mining exploration with each other and express their desire to active cooperation. Russia specially prepared a thick brochure to recommend their mining projects. 22 mining projects cooperation between China and Russia were established with just half a day.  

During the Chin-ASEAN Mining Cooperation Forum in September, delegates from China, ASEAN and other countries focused on the mining opportunities with “the Belt and Road Initiatives” and had in-depth discussions on topics of mining situation, geoscience research and cooperation, mining policy research and geological environment protection.

After the decision of constructing state geological laboratory with Guangxi Zhuang Autonomous Region in China, Mr. Di Ti, State Secretary of Cambodia Ministry of Minerals and Energy, indicated that “we expect to rewards our both countries and also bring more benefits to countries along the belt and road. And more exchanges with China Ministry of Land and Resources are welcome.”

The areas along “the Belt and Road Initiatives” are most vigorous in global economic development and the largest consumer of global energy resources. During Geosciences Cooperation Seminar of Countries along “the Belt and Road Initiatives”, delegates from departments of mineral resources of Myanmar, Vietnam, Thailand, Tajikistan, Pakistan and Turkey introduced their resources possession and geological exploration and meanwhile expressed their strong desire to conduct cooperation.

“This fully indicates that countries along the belt and road share the common vision on strengthening efforts to mineral resources exploration and development to achieve the transformation from resource advantages to economic advantages.” An expert told the correspondent that, “Cooperation is the essential way.”

The expert told the correspondent that surplus productivity is one of the largest challenges faced by China in the mining industry. “if it is possible for us to transfer our technology and capital, it will not only bring benefits to countries along the belt and road, but also provides opportunity for us to optimize the mining industry structure.”

Taking steel industry as an example, large investment on infrastructures construction of “the Belt and Road Initiatives” will push up the demand for steel and most countries along the belt and road are important targeted market of our steel export. With such cooperation in production capacity, it will surely step up our steel plant going out and be beneficial to not only relieve surplus productivity in China, but also further reduce cost through foreign superior mineral resources.

Geology Leading the Way with a Promising Future

Experts consider that “the Belt and Road Initiatives” is a major innovation for all-around opening in China, the engine of global economic growth. In the view of mining development and sustainable development in developing countries, Pei Rongfu held the opinion that “the Belt and Road Initiatives” can be regarded as the pioneering work in current era.

Either innovation or initiative, the construction of “the Belt and Road Initiatives” greatly promote mining development in areas along the belt and road and bring opportunities to geological works. Many experts considered that the construction of “the Belt and Road Initiatives” will provide a stage for geological works and international geoscience cooperation to show themselves well.

Pei Rongfu pointed out during Geosciences Cooperation Seminar of Countries along “the Belt and Road Initiatives” that developing mining industry is a non-profit work in geology system with the purpose of resolving the “resource” problem in minerals, and mining development gives priority to commercial geological work in market with the purpose of resolving the “asset” problem in minerals. With “resource” and “asset”, business running with going public is also required to form “capital”.

He therefore put forward that the position of geological work stood in the mining development of countries along the belt and road. “‘Resource’ among the ‘three points’ in mining development should focus on ore-deposit geology and prospecting geology, ‘asset’ should be responsible by the mining entrepreneur and ‘capital’ should mainly follow the economics and commercial science.”

In addition, he also proposed the establishment of “the Belt and Road Initiatives” mineral exploration risks fund to instruct the enterprises to package exploration in ore-concentrated area to immediately make breakthroughs in prospecting mines.

The correspondent was informed from CHINA MINING 2015 that some achievements have been made in geoscience cooperation between China and countries along the belt and road. “China Geological Survey is strengthening efforts to jointly conduct regional geological survey, geophysical exploration and geochemical mapping with countries along the belt and road.” Mr. Wu Zhenhan, Director of Department of Sci-Tech and foreign Affairs under China Geological Survey, introduced that, “For example, the 1:5000000 International Geological Map of Asia jointly accomplished by more than a hundred geologists for different Asian countries under the organization of Geological Research Center of Chinese Academy of Geological Sciences is evaluated as the best geological map in 2014 by Commission for the Geological Map of the World.”

In many experts’ view, these solid works surely provided essential macro-geological information for mining development of “the Belt and Road Initiatives”. During CHINA MINING 2015, many officials and scholars from state geological survey institutions in other countries expressed their strong desire to conduct geoscience cooperation. Mr. Syed Ishtiaq Khan from Pakistan Geological Survey indicated that Pakistan was urgent to maximize energy utilization rate and develop prosperous mining industry due to the need of economic development. “It is expected that geological institutions from other countries jointly participate in the geological survey in Pakistan.”

“There is a mutual integration among different civilizations and an enhancement on mutual understanding and friendship. We sincerely hope that this conference, especially this seminar, will further promote the integration and cooperation in energy and resources among countries along the belt and road to achieve mutual advantages complementary to each other, share risks and results in common and ultimately realize a development with mutual benefits.” The host sent such good wishes to the ending of Geosciences Cooperation Seminar of Countries along “the Belt and Road Initiatives”, may presenting heartfelt voices of all attendees. (Li Xiang)

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: m.balanzskin.com.

An overview of shale gas exploration through CHINA MINING 2015

Source: www.mir.gov.cn    Citation: www.gtzyb.com   Date: November 4, 2015

As a new star in energy market, the shale gas is motivating an energy revolution in China.

The news came from the CHINA MINING Congress and Expo 2015 in Tianjin that exploration and development of shale gas in China has been carried out and breakthroughs have been made successively in marine facies of Sichuan Basin and continental facies of Ordos Basin. China comes into the third one achieving commercial development on shale gas after America and Canada.

As the America was succeeded in fracturing the first shale gas well in 1981 and made a breakthrough in exploration and development of shale gas, the global pattern in energy and resources has gradually been broken. Up to 21st century, shale gas has brought major changes in the energy industry in many countries. Compared with the United States, China is merely a “new recruit” in shale gas development.

China is rich in organic shale beds with an extensive distribution and possesses a great potential in shale gas resources. After nearly 10-year practice of exploration and development, technological progresses and theoretic explorations, China has made significant progresses in shale gas development including resources potential evaluation, core technology and equipment system and basic theory construction, which basically meets the requirement for large-scale commercial development. During this session, Mr. Zhai Gangyi, Deputy Director of Oil and Gas Survey under China Geological Survey, introduced current situation of exploration and development of shale gas in China, theory innovation and technology advancement and future outlook in shale gas development and utilization. This page focuses on the latest news from CHINA MINING 2015.

■Current Situation of Exploration and Development

Four Shale Gas Production Areas Initially Formed

According to Zhai Gangyi, the proved reserves of shale gas in China have experienced a rapid growth in recent years with over 500 billion cubic meters currently. Four shale gas production areas including Fuling, Changning, Weiyuan and Yanchang are formed with an annual output capacity of over 6 billion cubic meters.

Among which, the SINOPEC explored the proven reserve of shale gas field with 380.598 billion cubic meters in Fuling and the CNPC totally submit the proved reserve of 163.53 billion cubic meters with Ning201—YS 108 well area in Shangluo of Changning shale gas field and Wei 202 well area in Weiyuan shale gas field.

The distribution map of four shale gas production areas

Fuling shale gas field of SINOPEC：

By the end of August, 2015, there were 253 wells being drilling, 204 wells being drilled and 143 being fractured into production. Every single well has a daily average production of 327.2 thousand cubic meters with top production of 591 thousand cubic meters. A total daily production reaches more than 12 million cubic meters and a total of gas production adds up to 2.5 billion cubic meters. The annual production capacity has already achieved 5 billion cubic meters.

Changning and Weiyuan shale gas field of CNPC：

◆Changning201-YS108 well area: there are 67 wells being drilled, 61 wells being drilling with an average testing daily production of 143 thousand cubic meters.

◆Weiyuan202 well area: there are 25 wells being drilled, 14 wells being drilling with an average testing daily production of 167.3 thousand cubic meters.

Shale gas production area in Ordos Basin of Yanchang Petroleum Corporation：

Yanchang Petroleum Corporation made a breakthrough in shale gas exploration in Ordos Basin. A number of wells including Liuping177 and Yunye2 achieved shale gas flow, presenting a promising prospect of exploration and development. Up to now, there are 59 shale gas well being drilled with 50 vertical wells, 3 cluster wells and 6 horizontal wells.

Significant discoveries in new beds and new areas：

◆Important Discoveries in Cambrian Niutitang FormationShale in the South 

Shale gas was discovered in Weiyuan of Sichuan Province, Chengkou of Chongqing Municipality, Cengong of Guizhou Province and Yichang of Hubei Province.

JinyeHF-1 well: shale gas flow with high production was firstly achieved in lower Cambrian Qiongzhusi Formation in Weiyuan area in Southwest Sichuan, with a daily production of 80 thousand cubic meters after fracturing.

Yidi2 well: a well blowout occurred with combustible gas when drilling Tianheban Formation in Yichang of Hubei Province.

◆An important discovery in Sinian Doushantuo Formationshale in the South 

Zidi1 well: shale with a thickness of 100 meters was discovered in Zigui County of Hubei Province, and the Doushantuo Formation shale features with a thickness of 145 meters and the gas-bearing volume of 2-4 cubic meters per ton, which were succeeded in ignition.

◆Important discoveries in Carboniferous- Permian shale in the North 

Weican1 well is the first oil and gas parameter well inUpper Paleozoic Erathem deployed and conducted in western Taikang uplift area by Oil and Gas Research Center, with 69 layers through gas logging, 465 meters drilling thickness of shale and gas content of 4.5 m3/t.

Mouye1 well is the first shale gas exploration well in Zhongmou area, with 10 shale reservoirs, 277.6 meters thick and a daily testing gas production of 3000 m³/d after fracturing.

◆Important discoveries of Permian shale in the South 

Baye1 well: separated gas content averagely reaches 1-2 m³/t, capable of ignition.

Hedi1 well: pure separated gas content reaches the peak of 3.03 m³/t

Jingye1 well: total hydrocarbon in target layer reaches 0.0238%-13.7639%

◆Important achievement in shale gas resources survey in Southern areas of Yunnan, Guizhou and Guangxi

Steady progresses have been made in bidding-won area exploration：

The bidding-invited area has successively conducted shale gas well drilling in Longmaxi Formation, Niutitang Formation and Carboniferous- Permian system in North China and achieved good discovery of shale gas.

■ Exploration and Development Situation 

Breakthroughs only Made in Parts

Resources possess a great potential while the distribution regularities are not clear.

Ministry of Land and Resources organized and conducted shale resources potential evaluation in 41 basins in 2011, with 25 trillion cubic meters recoverable resources, and selected 180 shale gas favorable areas but the distribution regularities are still not clear.

Breakthroughs have been made in merely some areas and several layers, and scope has not yet been expanded.

At present, breakthroughs in shale gas exploration have been made merely in some areas and several layers. For example, Longmaxi Formation has only made breakthroughs in local part of Sichuan Basin and Niutitang Formation has only achieved the shale gas flow in a few exploratory well. In addition, it is still not clear currently in the development potential and prospect in continental facies and marine-continental transitional facies.

Fracturing site of Fuling shale gas field of Jiaoye9-1HF and 9-3HF

Optimal Longmaxi Formation in Sichuan Basin and its lower periphery

The high-quality shale in Sichuan Basin and its peripheral lower Silurian Longmaxi Formation features with extensive distribution, great thickness, well gas-bearing capacity, great resources potential with20% of national shale gas resources, promising exploration and development and key advantage of preservation condition.

Important Lower Cambrian Niutitang Formation (with Sinian Doushantuo formation) in the South

Niutitang Formation shale features with extensive distribution, great thickness, high maturity, a certain gas-bearing capacity but a high degree of thermal evolution, great tectonic destruction and relatively great difficulty in exploration. The working idea of “finding low in high and weak in strong” has taken initial shape.

Favorable conditions for forming shale gas in Upper Paleozoic marine facies in Yunnan, Guizhou and Guangxi

Another breakthrough is expected to be made in this area.

The localization is basically achieved in technology and equipment but the core technology requires continuous efforts to make a breakthrough.

China currently is capable of drilling the horizontal well with less 3500 meters and staged fracturing, explores and implements the industrialized-well operation model and independently innovates equipment including 3000HP fracturing truck. However, the complementary development technology for over 3500-meter wells, micro-seismic monitoring technology and dynamic production forecasting technology are failed to master and equipment including rotary geo-steering system, staged fracturing with sliding sleeve, nano-microstructure and composition analysis are still out of localization.

The development cost is gradually decreasing but the single well cost continues to stay in a high level.

The economic development of shale gas still facies challenges and its commercial development still require sequal attention to supportive policy and cost reduction through technology.

■Progress in Geological Theory Research

Main controlling factors in shale gas of marine facies in South were found out

The complexity and uniqueness in geological conditions of shale gas in China decide that our shale gas exploration cannot mechanically imitate the experience of shale gas exploration and development achieved in America. It is the key to resolve problems of shale gas exploration and development in China to strengthen theory researches on accumulation mechanism and distribution regularities and technological progresses in exploration and development.

According to Zhai Gangyi, China now has preliminarily concluded main controlling factors of enrichment and high-production of shale gas in marine facies in the South.

Deep shelf as favorable facies belt for developing high-quality shale

Deep shelf features with abundant planktonanda strongly reducing sedimentary environment, conducive to the accumulation and preservation of organic matters and the development of organic pore, high organic carbon content and thick high-quality shale with regular distribution.

Tectonic preservation condition as the key factor of shale gas accumulation

The high-quality shale in deep shelf of marine facies in the South generally experiences two stages including early continuous deep burial and late continuous uplift. Roof and floor conditions are main factors of shale gas retention and preservation in early continuous deep burial stage, and the tectonism is the main factor of shale gas preservation in late continuous uplift stage.

The relatively steady tectonic area and favorable roof and floor conditions play a vital role in shale gas with high production. Formation pressure coefficient serves as the direct evaluation index to preservation condition of shale gas.

Reservoir physical property as important condition for shale gas with high production

Shale gas reservoir with natural fractures development, high porosity, high gas content and low ground stress difference greatly contributes to shale gas with high production. The better micro-fracture developed, the larger proportion of free gas and higher initial production will be. And the less horizontal stress difference, the better fracturing will gain.

Process technology as guarantee for shale gas with high production

Horizontal well trajectory and staged fracturing technology are crucial factors effecting the production after fracturing.

Seven main controlling factors

◆High-quality shale sector in abyssal shelf facies features with great thickness and steady distribution.

◆ Relatively steady tectonism, favorable preservation condition and moderate burial.

◆ Formation overpressure (pressure coefficient＞1.2)

◆Reticular natural fractures development

◆High porosity and gas content

◆Less difference in ground stress

◆Horizontal well trajectory is perpendicular to maximum principal stress.

■Progress in Exploration and Development Technology

Independent Innovation to Step Up Development

Shale gas resources in China features with complicated types and various distribution formations, and relatively great differences in main controlling factors of shale gas accumulation with various sedimentary types and different tectonic units, which are great challenges faced by China in shale gas exploration and exploitation. However, independent innovation on exploration and development technology has speeded up the development of shale gas resources in China.

Shale reservoir well-logging evaluation technology

Compared with conventional reservoir, the well-logging evaluation of shale gas reservoir presents more complicated. The logging information plays an essential role in key evaluation parameters including the source rock evaluation, shale gas qualitative identification, the acquisition of total organic carbon, gas content and rock brittleness index. The comprehensive well-logging evaluation has come into the technological support to current shale gas exploration and development.

At present, China has built up the immediate recognition mode for well-logging information of shale gas reservoir in marine facies has been. The “four high and three low” well-logging response characteristic comprehensively reflects high TOC, fine reservoir property, high gas content and good potential in fracturing.

In addition, it also built up the TOC and gas content litho-density interpretation model and mineral content and porosity interpretation model based on elemental capture spectroscopy sonde and combined framing density.

Seismic prediction technology forshale gas “sweet point”

◆Wave-impedance inversion technology for shale thickness predication

◆ TOC pre-stack seismic quantitative predication technology

◆ Pre-stack inversion and gas recognition technology

◆ Seismic fracture prediction technology

Achieving the prediction of sweet point area through seismic and electrofacies characterization.

Shale gas horizontal well drilling and completion technology

◆ Horizontal well drilling and design optimization technology    

◆ Horizontal well optimized and fast drilling technology

◆ Remote transmission geo-steering drilling technology

◆ “Well factory” effective drilling mode for complex mountain surface

Staged fractured gas testing technology of shale gas horizontal well

◆ Parameter optimization technology of differentiation staged fracturing

◆ Pumping bridge plug and perforating combining operation technology, horizontal well coiled-tubing drilling plug technology

◆Effective fracturing fluid system for geological features in China through independent innovation

◆ Micro-seismic monitoring technology

◆ Fracturing flow back treatment technology

◆ Compound bridge plug and 3000HP fracturing truck through independent innovation

◆ Forming the “well factory” fracturing operation mode

Jiaoye42 platform: 17 days for 4 wells with 75 sectors fractured, the top of 8 sectors fractured in a single day, the highest fluid volume of 14 thousand cubic meters into the well and the highest fractured sand volume of 508 cubic meters in a single day, which achieved the construction record with top fractured sectors in single day, top added sand volume and fluid volume.

◆Attempt to “carbon dioxide” waterless fracturing

■ Development Outlook

Face Both Opportunities and Challenges

1. Breakthroughs in Sichuan Basin and its periphery

CNPC and SINOPEC made constant efforts to advance the exploration in peripheral Sichuan Basin and successively achieved progresses and breakthroughs in areas including Dingshan, Nantianhu, Wuzhishan of Meigu County, Micangshan, peripheral Changning and Xuanhan-Wuxi.

2. Increasing shale gas productivity construction

CNPC, SINOPEC and Yanchang Petroleum Corporation increasingly strengthen the shale gas productivity construction and it is expected that the already production capacity in 2017 can exceed 15 billion cubic meters.

3. Progresses expected in bidding won areas exploration

Progressive discovery of shale gas by means of exploration and drilling and fracturing transformation are gained in areas of Baojing, Qianjiang, Cengong, Laifeng, Chengkou and Zhongmou.

Next, horizontal well drilling and staged fracturing will be in practice and it is expected to achieve progresses in industrial gas flow.

4. Ministry of Land and Resource further strengthen efforts to survey on shale gas resources

5. Active initiation on national key science and technology special projects on unconventional oil and gas exploration and development

6. Green and environment-friendly development

◆Establishing green development complementary technology

◆Developing environmental protection measures

The shale gas development in China insists on placing safety and environmental protection, green and low-carbon as top priority, and paying equal attention to resource development and ecological protection, strictly follows safety and environment assessment procedures and strengthens HSE system construction and total HSE management to promote the shale gas field development with safety, effectiveness and cleanness.

◆Forming environmental regulation and contingency plan(Translated by TLRHVC)

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