CHINA MINING News

Green mines construction in China：A long way to go

Background : Environment debt & Force of circumstances

Some mining enterprises used to attach importance only to resource extraction and economic indicators, pay little attention to local environment protection or its comprehensive benefit. This led to destruction of local ecological environment, some enterprises even can`t afford the cost of mine environmental recovery and rehabilitation. Such phenomena caused bad social influences that some backward areas with resource potential were of two minds when weighting new project in spite of a considerable economic outlook. What`s worse，some areas no longer accepted exploration or mining permit application，banned mining project completely for the sake of environmental protection. Therefore，a lot of people mistake resource development and utilization for the chief culprit of pollution. These measures blocked the transformation of resource advantage into economic advantage in above areas which cry out for getting rid of economic difficulties. Actually, we can achieve clean utilization of resource and enjoy convenience as well as comfortable environment. Only the construction of green mines can coordinate development between resource exploitation and environment protection.

On the other hand, mining had a rapid and significant development in past 10 years, while the environment were under great pressure at the same time. As Mr. Jiang Daming, the minister of Ministry of Land and Resources, said on this year`s national land and resources working conference, "In the view of environment and resource restriction, bearing capacity is close to superior limit, stringent protection and economical use of land and resources is an irresistible trend. In the past, resource and environment space is relatively large, the exploitation of land and mineral resources had a controlled impact on environment. But now, bearing capacity of resource and environment in many areas has reached or nearly reached the limit，constant large-scale intensive exploration will only cause troubles...,we should take overall consideration of land and resources exploration and ecological environment protection."

In conclusion, the construction of green mines is urgently necessary.

Development history: From tiny bud to full-grown tree

In 2007, the green mine construction which was only regarded as self-discipline behavior of enterprise at first, is still in its infancy. In this situation, Ministry of Land and Resources together with related national departments determined the strategic goal of green mines pattern and work out specific guidance. The first 37 pilot green mines were released in March 2011 by Ministry of Land and Resources while the second 183 unit in April 2012，the third and forth unit in 2014.

So far, there are 661 state-level pilot green mines in our country, 35 of them have passed the acceptance and completed construction objectives. In addition，some provinces also explore provincial pilot green mines actively, and have achieved good effects.

Although the green mine construction still faces some problems, it speed the construction pace leading to become more and more flourishing as subsequent pilot units are launched and experiences are popularized. The conditions and criterions of green mines rise to management system step by step. Construction patterns become more mature.

Policy support: Clear framework

In 2009, National development and Reform Commission and Ministry of Land and Resources jointly issued the National Mineral Resources Planning (2008 ~ 2015), put forward clear requirements for green mine development, and determine a strategic goal that establishing basic green mine pattern in 2020.

In order to fully apply the plan，the Ministry of Land and Resources issued a specific guidance on developing and construct green mine which defined the general idea and basic principles further on August 13 2010.

The general idea is to further carry out the Scientific Outlook on Development, to take the development and construction of green mine as an important method to guarantee healthy and sustainable mining development according to the national strategic requirements, to implement the objectives and requirements in the national mineral resources planning earnestly，to insist overall planning, policy set, pilot projects before launching all-round reforms and pushing forward reform as a whole, to change the way of mining development through green mine construction, to put in a place long-term mechanism to standardize order in the exploitation of mineral resources.

There are four basic principles. The first one is insisting on government`s lead, to carry out pilot projects and green mine construction standardization system. The second one is implementing corporate responsibility, to encourage companies to perform social obligations such as building up scientific development view. The third one is strengthening industry self-discipline，to give full play to industry association as a bridge and bond between mining enterprises. The fourth one is doing policy supporting well, to enact policy measures to promote reasonable utilization of resources and environmental protection.

Strategic significance: To realize mining development transition

China is now at a key stage of industrialization and urbanization, while resource rigid demand and environment pressure increase. The development and construction of green mine is an inevitable choice for carrying out the scientific outlook on development and transforming the economic development pattern.

To realize mining development transition, we should make rational utilization of resources, energy saving and emission reduction, environmental protection and harmonious mine lot as the main target, let the concept of green mining throughout the course of mineral resources exploitation, push recycling economy development model, realize the coordination of economic benefits, ecological benefits and social benefits of resources exploitation.

The key matter of develop green mine is to fully arouse the enthusiasm of mining enterprises, to strengthen industry self-discipline. Green mine is a revolution of mining enterprises operation and management mode, is an important means to guarantee the healthy development of mining industry.

Construction objective: Form national green mine pattern in 2020

To establish a perfect green mine standards system and management system and form a complete set of incentives is the next step of plan of China’s Ministry of Land and Resources. By 2020, we will generally formed the national green mining pattern, large and medium sized mining basically achieve green standards, small mining enterprises conduct standardized management in accordance with the conditions of green mine. The level of economical and intensive use of resource improve significantly, environmental protection of mines would be in effect，mine land reclamation level increase, mining enterprises and local government get along in harmony.

Although the green mine construction passed through several years that Ministry of Land and Resources has launched four group, a total of 661 pilot green mine. But compared with the large number of mines, pilot proportion of green mine is still not enough. There will a long way to go before form a pattern of the green mining in 2020.

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 2015 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2015. We invite you to join the event and to celebrate the 17^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2015, please visit: m.balanzskin.com.

An Overview of the global mining economic situation

Currently, the global economy, which is significantly below expectation, has maintained a moderate slow growth, and still remains in a slow recovery and deep transitional adjustment period, with major countries show obvious differentiation characteristics. The current situation of global mining is still in the downward trend, which gives rise to the continued-falling of mineral products price, growing excess capacity and the weak main minerals demand. As we can expect, the so-called winter period of mining industry has not passed, and a full recovery will take time.

Under the “new normal”, the economy of China has shifted from the previous high speed to a medium-to-high speed growth, and the resource demand structure is constantly upgrading, which is making a big change of supply modes and spatial structure of resource utilization.

See changes through figures

Global mining index continues to go downward

Influenced by the weak and unstable recovery of global macro-economy, global mining index has kept the downward trend since the middle of 2011, but the speed slowing down significantly.

According to the Pipeline Activity Index （PAI） analysis of SNL, the PAI index from 74 points, the relative high level in the past two years from September last, fell to 50 points in February of this year. Then, it rebounded to 58 points in March before it declined again. Up to May, the PAI index fell to 41 point, which is the lowest of nearly 3 years; Meanwhile, the SNL metal price index has almost downed to the lowest point in nearly three years. Mining market capitalization has rebounded in this half year, but it was far less than the same period last year. Thus the situation of global mining industry will still be unsatisfactory in recent years, which seems to be no plan to make improvements.

Low Price of Major Commodity

International oil prices rebounded slightly in early 2015 after a price plunge in 2014. Overall, it is reasonable that the crude oil market was stabilizing after a shock upgoing in the first half year.

The international ironstone price once peaked close to $200/ t in recent years, then it began falling since 2014. The analysts of Goldman Sachs said that the ironstone price in 2015 was expected to drop to $52 /t, which was 18% lower than the previous expect.

The price of six kinds of base metal （LME copper, aluminum, lead, zinc, tin, nickel） showed obviously different trends. The price of copper, nickel and tin has kept a downward trend since 2011, while the price of aluminum, lead and zinc has been almost stable with a smaller fluctuation.

Less merger and acquisition cases of mineral company

According to the report issued by McKinsey, the mergers and acquisitions of global oil and gas declined dramatically in the first quarter of 2015. From the perspective of mergers and acquisitions of global mining, SNL statistics showed that a total of 24 cases of mergers and acquisitions happened in the first quarter of 2015,which was less than 43 cases in the fourth quarter and 52 cases in the third quarter of 2014. However, the total amount of it amounted to $4.67 billion, which was almost flat to that in the fourth quarter of 2014. As same as previous years, mining mergers and acquisitions were still largely focused on a few minerals such as gold and copper in the first half of this year.

On the background of the downward trend and depressed merge and acquisition activities of China Mining，China mining companies speeded up the pace of "going out", to cite Zijin Mining Group Co., Ltd as an example.

The increased financing difficulty of global mining

According to the data in May, the total mining financing reached to $10.03 billion in the first quarter of 2015, which declined dramatically compared with $15.47 billion in the fourth quarter and $22.08 billion in the third quarter of 2014.

According to the data of SNL, there were 592 financing activities in the first quarter of 2015, which also shows a large drop compared to 918 in the third quarter and 903 in the fourth quarter of 2014. As usual, the large listed companies （market value greater than 100 million dollars） accounted for the vast majority （95%） of the total amount of financing. Global mining financing projects mainly concentrated in the iron and steel company.

See trends through events

America`s shale oil industry rescued from the desperate situation

There were two reasons why the price of international oil declined since 2014. One was the reduced demand, and the other was the excess supply. However, lower oil price brought challenges to the shale oil revolution, and also had a negative effect on the business activities of shale oil manufacturers in the United States.

Although the investment and the number of drilling RIGS of the shale oil in North America were declining, productions of shale oil has not really been cut. Driven by continuous improvement in technology, the efficiency of mining enhanced gradually, and the oil production costs fell by about 20%.

Overall, shale oil revolution is still on the way instead of going bankrupt due to the lower oil price. The center of the production of global oil and gas has showed a "moving westward" trend, which will undoubtedly have a profound effect on the supply pattern of global oil and gas.

China-Australia Free Trade Agreement (ChAFTA) contributes to the cut of resource utilization cost

The China-Australia Free Trade Agreement （ChAFTA）, signed on 17 June 2015, is the highest level of overall trade and investment liberalization in China. Upon full implementation of the agreement, tariffs of Australian exports will be lifted in four years, which will have a huge effect on the price of mining production, such as copper ore, nickel ore, alumina, zinc ore and coal.

Furthermore, China allowed the technical consultation and on-site service on coalbed methane （CBM） and shale gas provided by Australian servicer, as well as the consulting services on the mineral resource including oil, natural gas, iron, copper and manganese, which will make differences to the geological exploration departments and equipment manufacturing company in China, and also will bring revolution to the geological exploration units.

Overall, ChAFTA has not only lowered the costs of mining resources in China, but also stabilized the supply of it.

Zambia resources tax was first increased and then decreased to avoid outages

Zambia`s finance minister announced in October 2014 that, a new resource tax would be launched for copper production since 2015. Because of this, the royalty tax rate for open-pit mining went up to 20 percent from 6 percent, and the underground increased from 6% to 8%.

Tax increases, with the weak price and demand of the international copper mining, hit Zambian mining badly, which caused tension between mining companies and Zambian government. On April 14, Zambia`s cabinet set the royalty tax rate for open-pit and underground mining at 9 percent to avoid unemployment and off-stream in mining industry.

Countries such as Turkey and Gabon modified mining tax to promote the mineral exploration and development

Turkey, an important country along the “one belt one road”, modified its mining tax in February. Previously, if the licenses of the mining companies did not meet the requirements within the given time, it would be cancelled. However, the new tax broke the deadlock of the country`s mining right permission, which was even more friendly in terms of mining laws and policies for investors.

Gabon also passed the long-awaited modified mining tax at the beginning of the year. The new tax, which was carried out recently, showed a lot of changes in mining law system, becoming an important part of a new generation of African mining legal system construction.

Predict the future through trends

Global mining industry will meet a new development period

Global mining industry has been downward for four years, and the price of some minerals, such as gold, silver, aluminum, lead and zinc, has already been close to or reached their average cost of production. If the price continues to fall sharply, the whole industry will be at risk; other minerals, such as copper, nickel, tin prices continue going down, amplitude is still large, but the rate of decline has slowed down significantly, with the favorable factors such as destocking, it is expected to gradually stabilize in the short term.

The current development situation of mining companies is still hard. However, in the long term, with the development of Internet economy, significant adjustment of the global manufacturing pattern, and the new construction wave of infrastructure, the global economy will meet a new development opportunities eventually. Therefore，it is probably not far for global mining to get out of trouble.

From the perspective of the whole development situation of global economy, major economies are launching its own economic development plan, including the promotion of "Belt and Road" of China, the Asian Infrastructure Investment Bank and the Silk Road Fund. By 2015, almost 300 billion to 400 billion Yuan will be invested into "Belt and Road" in China, which is expected to boost GDP growth from 0.2 percent to 0.3 percent.

Thus it can be seen that, with a boom of new round global investment in infrastructure and the rapid development in emerging economies such as India and Indonesia, global mining could come across a new development opportunity, but it is unlikely to reach or exceed the previous peak.

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 2015 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2015. We invite you to join the event and to celebrate the 17^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2015, please visit: m.balanzskin.com.

China`s miners `must learn` from bungled foreign acquisitions

China`s mining firms have a mixed record on overseas acquisitions, but they can learn valuable lessons from missteps made in the past few years and adjust their strategies, say mining-sector executives at a sub-forum themed China’s Enterprises Outbound Investment on CHINA MINING Congress and Expo 2015 held on Oct.20, 2015 in Tianjin China.

"Chinese firms are still climbing the learning curve, many failures have dotted the path in the past few years," said Wang Side, vice-president of Chinalco Resources - a unit of Aluminium Corp of China, the No 2 producer of the metal.

According to Dealogic, Chinese firms made US$4.25 billion in overseas mining acquisitions in the year`s first nine months, from US$8.8 billion in the year-earlier period, when the volume was boosted by a US$7 billion acquisition by state-backed MMG in Peru. The deal volume in the first nine months of 2014 was US$4.4 billion, and US$3.3 billion in the same period of 2013.

Wang told an annual mining conference that he considered the three main reasons for Chinese outbound-investment failures to be poor timing, poor selection of investment targets and poor deal pricing.

More than 80 per cent of the mining firms had made overseas acquisitions between 2008 and 2012, with most of the companies losing some 80 per cent of their market value since the boom years, he added.

"There has [also] been a lack of proper social corporate responsibility and management of local community expectations, [although much improvement has been made in the last few years]," said a report by industry consultancy CRU on overseas investments. "Cultural issues and unfamiliarity with local regulations in the host country, as well as a lack of proper technical and financial due diligence have caused problems."

The global commodities boom ended three years ago as China`s metals demand slowed, along with a switch of focus from investment to consumption-led economic growth.

China is the world`s largest consumer of copper, aluminium and iron ore.

Some Chinese entities have invested in ore that is difficult and costly to process, such as a Citic project that suffered from major cost blow-outs and delays in Western Australia state.

It mines magnetite iron ore, which requires the construction of hugely expensive facilities for processing and transport.

"The error Citic made is an over-reliance on geologists` judgment when making investment decisions. The involvement of mine-design, construction, ore-trading, finance and legal experts is also imperative," Wang said.

"So while its project is the world`s largest magnetite project, it is very tough to turn it into cash flows."

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 2015 is held at Meijiang Convention and Exhibition Center in Tianjin on October 20^th-23^rd, 2015. We invite you to join the event and to celebrate the 17^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2015, please visit: m.balanzskin.com.

World Bank: Global trends in mining and contribution of sustainable mining practices to international development 

On October 21, 2015, Anita Marangoly Geogre, Senior Director, Energy & Extractives of the World Bank Group, presents her speech: Global trends in mining and contribution of sustainable mining practices to international development.

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 2015 is held at Meijiang Convention and Exhibition Center in Tianjin on October 20^th-23^rd, 2015. We invite you to join the event and to celebrate the 17^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2015, please visit: m.balanzskin.com.

CHINA MINING Congress and Expo 2015 held in Tianjin

Hosted by the Ministry of Land & Resources, Tianjin Municipal People`s Government and China Mining Association, CHINA MINING Congress and Expo 2015 is held on Oct 20~23, 2015 in Tianjin, China. This photo shows the opening ceremony held on October 21, 2015.

The Photo is Jiang Daming, Minister of Chinese Ministry of Land and Resources, PRC, delivering a speech at the opening ceremony of CHINA MINING Congress and Expo 2015.

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 2015 is held at Meijiang Convention and Exhibition Center in Tianjin on October 20^th-23^rd, 2015. We invite you to join the event and to celebrate the 17^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2015, please visit: m.balanzskin.com.

Madam Anita Marangoly Geogre delivered a speech on the keynote session of CHINA MINING 2015

(Photo:Zhao Xinhao, Edit: Xu Xiaojing)

On the morning of October 21, 2015, the keynote session of CHINA MINING Congress and Expo 2015 was held at Meijiang Convention and Exhibition Centre of Tianjin. Leaders of the industry and economists gave speeches centering on New Normal, New Opportunities, New Development. This is a scene that Madam Anita Marangoly Geogre, Senior Director of Energy and Extractives of the World Bank Group, delivered a speech with the topic “Global trends in mining and contribution of sustainable mining practices to international development”.

The Hon. Ministers, H.E. Ambassadors, Leaders of Tianjin Municipal Government,

Distinguished Guests, Ladies and Gentlemen,

Good morning!

I am grateful for being invited to the CHINA MINING 2015. This is my first CHINA MINING, so I feel very happy.

Concerning New Normal, New Opportunities, New Development, we, the World Bank, mainly focuses on New Development, because new development could release the potential of mining industry and realize sustainable development. In the coming days, we will have chances to exchange our views, compare experience and reach consensus on regional mining development. There are several billion people in the world who only had less than 2 dollars every day for life. As we all know that good mining management would release huge development potential. If the management is poor, it will hinder economic development. Therefore, our goal is that we should ensure mining industry as a promoting power which will increase development speed instead of lagging it behind.

There are over 6,000 mining enterprises, including several Fortune 500 enterprises. As a global industry, it hires 2.5 million people. According to the survey of International Council on Mining and Metals, if low and middle income countries have rich natural resources, mining will cover 60% to 90% of their FDI. 30% to 60% of exports are mining products, and sometimes 20% of national income come from mining industry and even 30% of the GDP come from mining in some countries. More importantly, about 1% to 2% of people are employed by mining industry. So, mining industry should not be neglected when concerning sustainable development.

Nowadays, facing climate change, we regard sustainable development as the most important topic. Seeing the low price of goods, we will ask a question that what is mining industry? Mining industry is a booster of sustainable development as well as an obstruction. I am pleased to participate in this discussion in which people shares best and practical measures. It is especially important for 1.5 billion people who only had less than 2 dollars every day for life. We discuss here about how to give better education and employment, how to start small and micro businesses. Mining industry also provide employment, health and sustainable environment for women. I am glad that if we make mutual effort, we will eliminate poverty. Eliminating poverty is the mutual goal of the World Bank Group, meanwhile, for developing countries we are an unique partner.

The World Bank Group contains five organizations, 189 members as directors, including China. Established in 1944. The head-quarter of the World Bank is located in Washington, DC, USA, with more than 10,000 staffs and 120 offices. As a bank who provides loan services, we give loans with low interests, even without interests. We offer international development aid loan or grants for developing countries in order to support investment in public education, administration, infrastructure, agricultural and environmental management and management about natural resources. Some projects are co-invested by local governments or other multilateral organizations, banks, export organizations, and private investors. In the morning, Mr. Minister mentioned this kind of partnership. The World Bank believes that the realization of New Development and sustainable development should rely on this partnership. This is the second function that the World Bank offered consulting service for our member countries. Research, cooperative and technical support and guidance are offered to developing countries. We provide investment chances, support development priorities of developing countries, and assist them in improving construction ability. We also host relevant conferences, so we ae a supporter of CHINA MINING 2015 as well.

In order to ensure countries with the best measures and the newest technologies, the World Bank Group is searching for different methods and changing ways of sharing technologies from the perspective of countries and peoples. The World Bank was told by many countries that although they were in demand of capital, they starved for support and successful experiences. Therefore consulting opinions given by the World Bank are of value. We are making effort to improve our service, for example how to design project, how to give information and support, and how to meet the requirement of member countries. We have a focal project, an open development, which offer free and easy-to-get instruments for people to search and solve development challenges. For instance, there is an open data website which contains related successful experiences of different countries. Countries can download those experiences from the Internet. Outcomes of annual conferences of countries and monetary funds are conveyed on time to every part of the globe through the World Bank Online. This is what we can do better. It meant that if we offer more information we will gain better partnership and share more important and practical experiences so as to give better service.

We endeavor to realize two goals of the World Bank. First, we will eliminate poverty and enhance mutual prosperity. The World Bank quests for development in many aspects. Currently, 39 countries have this kind of projects which strengthen management in terms of mining industry. How can we do? In principle, we supply consulting service to governments. First of all, their payment should be transparent and the right of mining given to them should be fair and just. We will help them to manage their income, so the income can share with local residents and the poor. Mining industry should respect the need of local community and the surroundings. As an assistant of the World Bank, International Financing Company offers loans or participated in investment as participation unit to re-develop the potential. International Financing Company has 500 million dollars, located in many countries. Together with the United States, the World Bank forms a group which mainly consider how to share resources when serving member countries. We give suggestions in communications to many governments, at the same time, we learn experiences from them and take advantage of chances.

Ladies and gentlemen,

China spend 34 billion dollars, a shocking number, to support mining industry. After listening to the speech of Ambassador of Peru to China, we find that 54% of Peruvian products are mining products and Chinese enterprises take 37% of their mining right. China’s investment which is closely related to the life of Peruvian people in macro scale or in single field is very important to this country. It is also important for many other developing countries. Chinese investments are dynamic in those countries. Many Chinese mining companies are taking steps which will be beneficial to the improvement of people’s life and better management. As least 90 Chinese companies will pay related governments.

They joined in EITI, a payment transparency project. We would like to take this opportunity to praise new policies of Chinese government. I believe that these policies will encourage investors and companies to operate in foreign countries so as to decrease their environmental pressure, including green-credit policy and environmental protection guideline. The green-credit policy requires Chinese banks not to invest in heavy pollution and high energy consumption industries but support companies with low emissions and high efficiency. We believe that this policy will guide Chinese companies to sustainable investment so as to generate sharable benefits, including domestic benefit and benefit from emerging economies.

Dear guests, considering your operation, you will see that sharing interest will help to general development and poverty elimination. Over the years, we cooperated with Chinese banks and international banks. The World Bank Group raise awareness and understand global standard, including the principle of fair. The World Bank makes efforts to help banks evaluate environmental effect of their investment projects. Industrial and Commercial Bank of China became the first participant in 2008, and we hope that other Chinese banks will join this project. Internationally, banks from 80 countries and regions joined this project.

Talking about the situation of global mining industry, New Normal means that mining products are decreasing in price, which brought difficulties to developing countries with rich resources. Many projects which are going to start are cancelled or postponed. Projects that are going to be expanded are stopped. Many projects in Malawi and Peru are suspended. It brings great influence to the economy and to people’s life. They relies on this income, but many jobs are cancelled. Relevant infrastructure construction is stopped too. It deserves our careful survey. We will analyze the future, conduct reform, manage efficiently, benefit local communities under the circumstances of low income. It is high time that we focus on innovation, cost decrease, and recycling. We will adhere to long-term goals, and stick to good public management which would boost better investment from private sectors.

With low returns, the capital target expectation is low too. Presently, companies and countries awere the same. Stable investment is beneficial to them. Clear mining right is advantageous, and transparent management is important. With weak, imperfect, unstable management and without honesty, the risk will be high. The World Bank is in favor of this kind of effort, and we hope that there will be sound managerial arrangement. We will make reasonable and transparent rules as well as accountability system. Working as a bridge, the World Bank gives suggestion to governments, provides private sectors with stable and predictable background. It will enhance the prospect of all shareholders. We work together with countries to promote transparent principle and constant policy. Good taxation and national financing policies are constant and transparent measures that will attract the society.

This morning, Mr. Minister and Mr. Ambassador both mentioned that citizens should participate in the fair share of interest, which is beneficial to strengthen the relationship between communities and companies. Transparency will decrease the risk of private sectors so that a more stable environment can be built. For example, in Myanmar we developed an effective and transparent framework with local government to manage mining right. EITI holds open talks in many aspects and offers a platform for discussing mining. The other example is that in order to ensure civilian participation in mining industry, local suppliers should invest in local people for joining mining. It not only gives job opportunities to local citizens but also decreases the cost. Investing in the skills of local people help to find better workers in the future and at the same time brings benefit to communities. The World Bank is pleased to make it come true together with mining companies.

In Guinea, private industrial sectors and financing companies are conducting a local supplier development project which will bring better management and cultivate working skills of workers. In the future small companies will become suppliers for big companies. Because infrastructure in community level can bring huge benefits, such as water or education, if they are improved, local economy will be improved too. As we can see that many Chinese investors cooperate with local governments in developing infrastructure. Infrastructure is of great importance to local people and is beneficial to the development of mining companies. We have experience in this aspect. According to recent research conducted by the World Bank, some documents that contain experience in terms of investing in infrastructure can be shared with you.

In Sub-Saharan Africa, we pay special attention to infrastructure built by mining companies. Mining industry in Africa requires electricity, and in the process of electricity supply, local communities and people gain access to electricity too. In this way, these companies become important power suppliers for national economic development and obtained great trust from citizens and governments. It is beneficial to overall development, and this kind of partnership can be copied. With interest, both mining companies and governments would like to improve local electricity supply when establishing grid.

A practice which I think it is advisable is that mining projects will give consideration to women. With low income from mining industry, women usually can not enjoy this industry. In some countries, women can not get 90% of the profit. If women in mining areas are helped with awareness, children are educated and provided with good healthcare, it will bring huge benefit. Furthermore, if the employment is balanced in gender, the company will gain profit. The World Bank, mining companies, private sectors, and governments have several projects in many countries, including Papua New Guinea and Congo. Women will have equal saying in community’s decision making and sharing mining achievement.

Interestingly, if you pay attention to 17 sustainable development goals which are newly approved in the global community you will find that the mining industry will exert positive influence on these goals. Reducing water deficiency and carbon footprint will be more efficient in energy utilization. By 2030, the realization of sustainable development will require close cooperation between public and private sectors. I think it is a challenge for countries and the mining industry. Please regard it as an opportunity which will be a promoter and booster for sustainable development and sharing outcomes with mankind.  

At last, I would like to reclaim important information to this majestic conference. Establishing just and good managerial structure will guarantee sustainable achievement of investment and production of private sectors. I notice that several African ministers participate in CHINA MINING. In building up public management, we can cooperate with each other. It not only contributes to their resources development, but also produces healthy and prosperous communities. In my opinion, doing business is good because it generates profit and bring wellbeing. It is a future prospect. We are looking forward to cooperation and eliminating poverty from the most vulnerable group of people.

Thank you!

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 2015 will be held at Meijiang Convention and Exhibition Center in Tianjin on October 20^th-23^rd, 2015. We invite you to join the event and to celebrate the 17^th anniversary of CHINA MINING with us. For more information about CHINA MINING 2015, please visit: m.balanzskin.com.

Mr. Si Xinbo delivered a speech on the keynote session of CHINA MINING 2015

(photo from Zhao Xinhao, edited by Xu Xiaojing)

On the morning of October 21, 2015, the keynote session of CHINA MINING Congress and Expo 2015 was held at Meijiang Convention and Exhibition Centre of Tianjin. Leaders of the industry and renowned economists gave speeches centering on New Normal, New Opportunities, New Development. This was a scene that Mr. Si Xinbo, Deputy General Manager of Silk Road Fund, delivered a speech with the topic “Play role of Silk Road, promote international mining investment cooperation on the premise of mutual benefit and shared profit”.

Respected Guests, Friends,

Ladies and Gentlemen,

Good morning!

I was very honored to attend the 17^th CHINA MINING and gathered together with officials from different countries, experts, scholars, and colleagues in Tianjin, discussing cooperation and development of international mining industry. To take this opportunity, I believed that we could share penetrating opinions and found high-quality partnership and development chances.

Today, my topic was “Play role of Silk Road, promote international mining investment cooperation on the premise of mutual benefit and shared profit”. There were four parts of my speech.

First, it was about current situations of mining industry.

In the process of profound adjustment of the global economy, mining industry faced various difficulties and challenges. It was proved by historical experience that the distribution and the way of development of mining had close relationship with the global economic structure. Changes of international economic situation also affected the mining industry greatly. After the financial crisis in 2008, global economic recovery was slow than expected with obvious regional differences. In the second season of this year, the United States as a major power of economic growth enjoyed 3.7% of GDP growth rate. China also maintained 7% of high growth rate in the first half of year.The Eurozone, with the help of European Central Bank’s plan of purchasing debt and plan of investment, gained support from many sides except Germany and France. Benefited from the decrease of oil price and capital cost, Japan, India and Southeast Asian countries enjoyed positive increase signals. The increase of African’s foreign investment also remained at over 80%. But at the same time, some countries were digesting subsequent impacts of heavy debt and high unemployment. Some countries suffered from aging population and slowdown of production growth rate. The economy of Eurozone was still weak and the economic growth rate of emerging countries in Asia, Latin America and CIS was decreased. Geopolitical conflicts, natural disasters, and incidents also added uncertainties. Potential growth factors and market risks intertwined, which remained a slow growth of global economy in the process of profound adjustment. The development of mining industry, therefore, faced insufficient demand, financing obstacles, and profitability dilemma.

Let us focus on China. By the first half of this year, China enjoyed a three-month recovery in industrial added value. In April, the social electricity consumption experienced continual increase from negative to positive. Total retail sales of social consumer goods and new-type consumption grew rapidly. Sales of housing was clearly improved, employment was stable, and urban and rural residents’ income enjoyed faster increase than GDP. In the meantime, domestic infrastructure construction had little effect on steady growth. Export was subject to the global market with insufficient demand. Deflation should not be neglected. Financial increase and payoff improvement faced challenges, and the economic pressure was still great.

In the past decade, emerging market economies, including China, injected great power to the world economy through their rapid economic growth. It generated huge demand which could become a vital driving force for the prosperity of the mining industry. However, currently Chinese economy was in a crucial period of time of growth mode transformation. With constant structural optimization, the growth rate went down. Demands from emerging countries had little effect on the mining industry. Because of profound structural adjustment, traditional motive power was declined and new motive power did not emerge. Demand structure, industrial chain, trade and investment conditions encountered new changes and difficulties.

Second, it was about features of mining development.

Although the mining industry would continue depression, it still showed several features in the profound adjustment.

First of all, the depression of mining industry continued with few signs of a pick-up. The global economy experienced slow growth and oil price gradually went down to the lowest point of a five-year record. Low oil price triggered a downward turn of bulk commodity price, which led to the most austere situation of financial crisis with continual declination. SNL metal price index went down from 107 point in March to 103 point in late June. The amount of global prospecting projects decreased from 418 in April 2014 to 380 in this first season and 363 in the second respectively. PAI was 44.3 in this June, reaching the lowest point 40.2 in April. Consumption increase of global mining resources was obviously slowed down. Supply of mining materials and products became surplus, and mining products, capital, and stocks faced common price crisis. In short run, there was no favorable turn for full mining industry to overcome depression.

Secondly, mining prospecting expanded from traditional mining countries to developing countries and blank areas with rich resources. Prospecting was a process of continual search and finding. Depressed mining industry brought price and cost pressure. Traditional mining countries, such as Canada and Australia, attracted fewer investment, and the hot point of prospecting gradually transferred to some resource-abundant developing countries in Latin America and Africa. For example, Canada became the top ten choices for mining negotiation and discussion in 2014. At the same time, prospecting in deep see areas, high altitude areas and polar regions grabbed more attention and proposed higher requirement to capital, technology, equipment, and the whole chain coordination. The expansion of mining prospecting offered foundation and confidence for the recovery. With gradual improvement of global economic situation and integration of mining industry, the comprehensive performance of this industry would be improved in two or three years.

Thirdly, with increasingly strict social responsibility and environment protection standards, technical threshold and cost pressure of mining investment and cooperation were lifted. Traditional mining work method usually accompanied with environment problems, however, transformation of economic growth mode and adjustment all required changes of mining resource development and utilization. It meant that higher technical threshold and greater cost of mining industry would boost survival of the fittest according to returns and efficiency and project integration. In terms of project investment, major transnational banks and investment organizations would generate some common standards that were specialized in social responsibility and environment protection. Future mining development asked for attention on social responsibility and environment protection. Relevant investment and cooperation should attach importance to them under the framework of return and risk analysis.

Fourthly, depressed industry and loose administration led to dynamic merger and restructure in the field of mining. Austere market situation gave burdens to the mining industry and generated more restructure chances for mining companies. Asset acquisition and re-organization were the major measures for large international mining corporations to optimize capital structure, increase operation quality, and decrease risk. According to SNL surveys, in the first season of this year, there were 23 mergers and 35 mergers in the second season. The merger amount in the first season related to metal was 2.93 billion dollars and doubled to 6.5 billion dollars in the second season. Some mining countries, in order to stop the downward economic trend and increase their competitive power, revised their mining laws, adjusted taxation, speeded up examination and approval, improved investment environment, and presented new trends of loose administration. Changes of market environment and policy background brought new opportunities and space for resource optimal allocation and investment.

Third, it was about the Silk Road Fund.

Adjusting to the economic growth mode transformation in China and the globe community, the Silk Road Fund came into being to realize mutual development and benefit in countries participated in the One Belt and One Road initiative.

Guests and friends, the situation of global economic growth was not optimistic. Many industries, including mining industry, did not lift themselves from pressure. Countries should coordinate and cooperate in trade, investment and finance so as to overcome difficulties and obtain mutual development, without exception, China should do so. Silk Road Fund was established under the circumstances of the One Belt and One Road initiative as well as the trend of economic growth mode transformation and cooperation structure escalation. I was honored to introduce Silk Road Fund to you and I hoped that it could generate more choices for mining cooperation. 

Firstly, I would like to introduce the orientation of Silk Road Fund. On November 8, 2014, President Xi Jinping announced at Strengthening Interconnection and Partnership Dialogue of APEC that China would contribute 40 billion dollars to establishing Silk Road Fund. It was a medium and long term fund founded for supporting the initiative. According to marketization, globalization, and professionalization, it promoted investment and cooperation in terms of infrastructure construction, resource development and industrial cooperation of related countries and regions through equity investment and many other methods. It boosted mutual prosperity and development, realized reasonable returns, and achieved long-term financial operation.

Therefore, Silk Road Fund had following features.

a. Serving the construction of One Belt and One Road, it promoted balanced new-type partnership among countries, brought about mutual benefit, provided financial support and platform for extensive cooperation in relevant fields, and tamped the foundation of long-term economic growth and steady development.

b. As a medium and long term investment fund, it gave financial support to projects that had long periods and modest returns, including infrastructure construction, energy and resources, industrial and financial cooperation, instead of seeking short-term profit.

c. Taking equity investment as a major method, it supported companies to have deep involvement by acting as shareholders rather than joining EPC project contracting only. It strengthened the control of projects and improved management in order to realize international management.

d. It was flexible to provide financial support in equity which was beneficial to the best choice of financial organization according to project features and trade structures.

e. adhering to market operation, it was neither an aid fund nor a policy fund. It stuck to market principles and requirement, maintained sustainability, and carried its historical mission.

Secondly, I would like to introduce the investment idea of Silk Road Fund.

a. Investment and operation of Silk Road Fund insisted in principles of dialogue and planning with countries. The initiative of One Belt and One Road followed peaceful cooperation, inclusiveness, mutual learning and construction. It was against close and exclusive cooperation. Presently, the European Union proposed a 315-billion-euro Juncker Plan, Russia proposed that the Far East Area should be developed first, and Kazakhstan put forward the Road to Light Plan and maritime power strategy. Pakistan proposed Vision 2025 Development Plan. Many countries were searching for plans to improve international economic coordination and cooperation.

Investment of the fund aimed at docking with present cooperation mechanisms and development plans of related countries and regions, giving consideration to their degree of comfort, and binging about mutual prosperity through Pareto Improvement.

b. Investment and operation of Silk Road Fund insisted in principles of realizing reasonable medium and long term returns. It was founded in light with share-holding system with shareholders including Foreign Exchange Reserve, China Investment Corporation, the Export-Import Bank of China, and China Development Bank. Seeking for reasonable returns took responsibility for investors and could have foundation for equitable cooperation and mutual benefit with market main bodies. 

c. Investment and operation of Silk Road Fund insisted in principles of having complementary advantages and win-win cooperation with financial organizations home and abroad. It observed laws and regulations of China and invested countries, general market rules and international financial orders. It focused on green and sustainable development, respected domestic and international financial organizations, attached importance to cooperating with these organizations, and offered more choices by giving diversified investment methods for enterprises and projects. In the process of advancing healthy and stable global economy, Silk Road Fund had win-win partnership with other financial organizations.

d. Investment and operation of Silk Road Fund insisted in principles of open cooperation. As an open and inclusive organization, we welcomed investors home and abroad to participate in project cooperation. After a period of operation, the fund would open to more investors or cooperate on sub-funds. It would seek for cooperation chances with open attitude with no matter bilateral organizations or various industrial investment organizations. It would make contribution to regional and global development and prosperity.

Thirdly, I would like to introduce investment orientations of Silk Road Fund.

In line with the idea of mutual discussion, mutual construction, and mutual benefit, Silk Road Fund mainly supported investment and cooperation with countries and regions along the Belt and the Road. Except for these countries, there was no strict limit geographically. If other countries and regions met the requirement of our investment, we wouldconsider giving financial support. Silk Road Fund supported powerful Chinese companies to have cooperation, paid attention to share experience of China’s industrialization and modernization and high technology as well as advantage productivity, and boosted mutual development and prosperity of related countries. In terms of industries, the fund currently emphasized public transportation infrastructure investment, public infrastructure investment, energy industry investment, productivity and technology cooperation investment, and financial industry investment. I would like to emphasize that the mining industry CHINA MINING 2015 paid attention to was the major field which Silk Road Fund though highly of.

Four, it was about functions of Silk Road Fund. It promoted international mining investment and cooperation under the premise of mutual benefit.

Guests and friends, Silk Road Fund was like a ship sailing in the ocean of One Belt and One Road, and it was like a bond engaging in promoting combination of capital and industry. The fund was a good partner, hoping to advance international mining investment and cooperation under the premise of mutual benefit.

Firstly, Silk Road Fund concentrated on exerting special functions of One Belt and One Road investment. It was a financial organization, founded for the Belt and Road construction and focusing on related projects. With short decision chain and high efficiency, it would conform to the development trend of mining industry and promote deep and diversified cooperation between Chinese enterprises and many countries.

Government officials, scholars, experts and colleagues, no matter you came from traditional mining countries or emerging mining areas, you were welcomed to know Silk Road Fund. We could explore investment projects and cooperation chances, advance the Belt and Road construction, and achieve mutual development.

Secondly, Silk Road Fund could function as investment leverage and increased credit. As a typical capital-intensive industry, mining industry required huge investment in prospecting, development, production, and processing. Trade and transaction amount of mining industry ranked in top place in international trade statistics. Silk Road Fund, as a professional investor with national background, had solid capital and high-level credit. It could provide capital support for companies and projects in mining development and merger. It increased corporate credit, advanced project maturity, achieved financial condition, and boosted project implementation. For mining companies’ restructured capital operation, it functioned as professional investors and reliable partners.

Thirdly, Silk Road Fund could stabilize periodic fluctuation and the market. International mining supply and demand mechanism and investment environment were closely related to economic situations of countries. Mining investment featured huge capital amount, long period, slow return, and hard turn. Periodic fluctuation of industrial development was the major systematic risk investors faced. Compared with general PE organizations, the fund attached more importance to medium and long term returns with longer investment term. So, it could stride over development cycle and had higher tolerance for short-term financial fluctuation. The fund could assist companies with impulse-type periodic ups and downs, achieving long-term and stable corporate development. It was a hard-won investor for mining industry.

Fourthly, Silk Road Fund could function as flexible investment tools. Production and investment of mining industry generally accompanied with complex trade structures. Plans of investment mode were of great importance to projects. The fund, taking equity investment as major measure, could offer loans, debts, sandwich investment, sub-funds and many other products.  It was very much in the minority of investment organizations which could operate all types of tools. It could coordinate the demand of mining companies and projects. It could build the most reasonable cooperation structure and realize profit maximization.

Fifthly, Silk Road Fund could improve efficiency and add value. In practice, some countries and international organizations would promote development and utilization of mining resources with capital investment. The fund, on the basis of adjusting to development plans, adhered to market operation. Its professional investment team had the capability to participate in mining cooperation as high-credit investors and high-level financial advisors. It helped companies to grasp development directions, find market signals effectively, improve corporative management, optimize financial plans, promote the combination of macro corporative development with micro market efficiency, and achieve long-term value increase.

Sixthly, Silk Road Fund could lead capital and industry. Mining industry as the most fundamental resource element had long industrial chain and various upstream and downstream industries. The fund could rely on its advantages, exert demonstration functions, lead and catalyze the entry of social and international capital to mining industry in the construction of Belt and Road. It could help related companies to extend along the chain, find potential and valuable investment chances, and realize addition effect. 

Ladies and gentlemen, guests, friends, the theme of CHINA MINING 2015 was New Normal, New Opportunity, New Development. In the coming period, we should continually adjust to the new normal of economic growth, overcome the pressure of downward economy, and search for new chances of industrial and financial combination. In the process of self development, it would usher new development of global mining investment and cooperation and contribute to economic development as well as social improvement.

Thank you!

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 2015 will be held at Meijiang Convention and Exhibition Center in Tianjin on October 20^th-23^rd, 2015. We invite you to join the event and to celebrate the 17^th anniversary of CHINA MINING with us. For more information about CHINA MINING 2015, please visit: m.balanzskin.com.

The opening ceremony of CHINA MINING 2015

Source：KHB       Citation：KHB   Date：October 21, 2015

On the morning of October 21, 2015, the opening ceremony of CHINA MINING 2015 was convened at Tianjin Meijiang Convention and Exhibition Center. The theme was “New Normal, New Opportunities, New Development”. These are some pictures of the opening ceremony.

（photo from KHB）

（photo from www.agkyb.com）

（photo from www.zgkyb.com）

（photo from www.zgkyb.com）

（photo from www.zgkyb.com）

（photo from www.zgkyb.com）

（photo from www.zgkyb.com）

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 2015 will be held at Meijiang Convention and Exhibition Center in Tianjin on October 20^th-23^rd, 2015. We invite you to join the event and to celebrate the 17^th anniversary of CHINA MINING with us. For more information about CHINA MINING 2015, please visit: m.balanzskin.com.