- Source: Mining industry of China
China's mineral resources are diverse and rich. As of at least 2022, more than 200 types of minerals are actively explored or mined in China. These resources are widely but not evenly distributed throughout the country. Taken as a whole, China's economy and exports do not rely on the mining industry, but the industry is critical to various subnational Chinese governments.
Mining is extensively regulated in China and involves numerous regulatory bodies. The Chinese state owns all mineral rights, regardless of the ownership of the land on which the minerals are located. Mining rights can be obtained upon government approval, and payment of mining and prospecting fees.
During the Mao Zedong era, mineral exploration and mining was limited to state-owned enterprises and collectively-owned enterprises and private exploration of mineral resources was largely prohibited. The industry was opened to private enterprises during the Chinese economic reform in the 1980s and became increasingly marketized in the 1990s. In the mid-2000s, the Chinese government sought to consolidate the industry due to concerns about underutilization of resources, workplace safety, and environmental harm. During that period, state-owned enterprises purchased smaller privately-owned mines. China's mining industry grew substantially and the period from the early 2000s to 2012 is often referred to as a "golden decade" in the mining industry.
Overview
China's mineral resources include fuel (such as coal, oil, and natural gas), nonfuel metals, and nonmetal minerals.: 38 As of at least 2022, more than 200 types of minerals in China are actively explored or mined.: 38 The country is both a major producer and a major consumer of mineral resources.: 5–6
Its mineral resources are widely but not evenly distributed throughout the country.: 38 Although China's national economy and exports do not rely extensively on mineral production, various subnational governments rely heavily on the mining and resources industry.: 6 Regions where mining is a major part of the economy include: Shanxi province, Jiangxi province, Henan province, Inner Mongolia Autonomous Region, and Xinjiang Autonomous Region.: 23 Mega mining sites in China include Baiyin silver mine, Tongling copper mine, Dexing copper mine, Dachang tin mine, and Jinchuan nickel and cobalt mine.: 39 In addition to mega mining sites, China has thousands of large and medium-sized mines and tens of thousands of small mines.: 39
= History
=During the planned economy of the Mao Zedong era, mineral exploration and mining was limited to state-owned enterprises and collectively-owned enterprises.: 39 Private exploration of mineral resources was largely prohibited.: 39
During the 1980s as part of the Chinese economic reform under Deng Xiaoping, the central government encouraged private exploration and mineral use under the policy of "speeding up the water flow".: 39 In 1986, China passed its first Mineral Resources Law, which confirmed state ownership of mineral resources and authorized exploration of mineral resources by various kinds of public and private entities.: 39 Per these policies, SOEs continued to own and operate the largest and richest mines in China although smaller mines in less strategic industries were available to private and collective enterprises.: 39 During this period, the mining industry and the regulatory environment remained relatively underdeveloped and profitability in the industry was generally low.: 39-40
China's mining industry became more marketized in the 1990s, especially after Deng Xiaoping's 1992 Southern Tour.: 40 In 1996, the Mineral Resources Law was revised to more clearly define procedures for mineral extraction and the regulatory roles of government bodies.: 40 In the late 1990s, reform of China's state-owned enterprises resulted in numerous state-owned enterprises in the minerals industry being acquired by private investors.: 40 By the end of the 1990s, China had become the world's second largest producer of solid minerals and was the largest producer of various specific minerals, including iron and coal, among others.: 38
In the early 2000s, Inner Mongolia huge mineral deposits including coal (such as Dongsheng Coalfield) and rare earth metals were discovered in Inner Mongolia Autonomous Region, leading to major economic growth for the historically underdeveloped region.: 47
In the mid-2000s, the Chinese government sought to consolidate the mining industry, including through state-owned enterprises acquiring smaller private mines.: 40–41 This approach was driven by concern over environmental harm, workplace safety, and inefficient utilization of mineral deposits.: 40–41 China's mining industry grew substantially and the period from the early 2000s to 2012 is often referred to as a "golden decade" in the industry.: 41
From 2010 to 2011, China's central government designated 69 resource-depleted cities and offered a policy package designed to help their economies transition away from a focus on resource extraction.: 192 The policy support included financial subsidies, earmarked loans, compensation for environmental damage caused by the mining industry, and support in incubating non-resource industries.: 192 These 69 cities then experienced significant GDP growth and income growth among workers.: 192–193
In 2013, the State Council designated 262 cities across China as "resource-rich cities".: 38
In 2017, mining industry profits again increased, having previously dropped after the early 2000s "golden decade".: 52–53
= Policy and regulatory environment
=Mineral exploration and extraction are highly regulated in China.: 14 Various regulatory bodies active in the industry include industry and commerce departments, environmental protection, work safety, and land and resources.: 14
All mineral resources in China are owned by the state, regardless of ownership of the land itself.: 14 Mining companies must obtain government approval to obtain mining rights (which can last for up to 30 years) and must pay prospecting and mining fees.: 15 The state's ownership of mineral resources is specified by the Mineral Resources Law.: 119 The Mineral Resources Law is also the legislation which provides that exploration of mineral resources must authorized by the State Council or provincial-level governments, though in practice the State Council or provincial-level governments delegation this authority to local land and resources departments at the county level or higher.: 119
Extracted minerals are taxed at a low rate in comparison to the value of the minerals.: 15 Resource tax was first established in 1984 on coal, oil, and natural gas.: 50 The 1994 tax reform expanded the resource tax to include also include ferrous metals, nonferrous metals, nonmetallic minerals, and salt.: 50 Resource taxes were based on the volume of minerals until 2011, when resource taxes became based on the sales value of minerals.: 50 In addition to taxes, mining enterprises must also pay a nontax Mineral Resource Compensation fee based on the sales value of mineral products.: 50 Local governments in resource-rich areas may also require mining enterprises to pay local taxes (that are not split with the central government) or local nontax fees.: 118
China's Two Markets, Two Resources (which is related to the Go Out policy) emphasizes leveraging domestic supply sources of resources (including through increased investment in prospecting and mining) and international sources of resources (through various strategies, including foreign acquisition, investment, short-term purchasing, and long-term purchase contracts).: 73–74 Related, the One Third, One Third, One Third policy prescribes that in procuring natural resources, one third of China's supply should come from domestic production, one third from direct procurement contracts, and one third from foreign acquisitions.: 74
The National Food and Strategic Reserves Administration of China's mandate is to stockpile strategic resources and to intervene when necessary in markets.: 218 For example, in 2005 and 2021, it released copper into the global markets.: 218
As part of its efforts to enhance the circular economy, China is attempting to decrease its reliance on mining for its mineral supply.: 182 Academic Jing Vivian Zhan writes that promoting the circular economy helps China to avoid the resource curse and helps to alleviate overreliance on extractive industries.: 182–183
Some subnational Chinese governments seek to promote diversification in non-resource industries by requiring or incentivizing mining companies to also invest in other industries.: 54 For example, since 2004, some local governments in Shanxi province have required that coal mining companies set aside funds for investing in noncoal business like agriculture and produce processing.: 54
The Chinese government requires mining companies to restore the environment around exhausted mines by refilling excavated pits and planting crops or trees.: 53 Many mining companies use these recovered mines for ecotourism business.: 54–55
Industry segments
= Antimony
=In 2022, according to the United States Geological Survey, China accounted for 54.5% of total antimony production, followed by Russia with 18.2% and Tajikistan with 15.5%. In 2024, China placed exports restrictions on antimony.
= Cobalt
=China and the Democratic Republic of the Congo have significant trade in cobalt, a metal for which China is the world's largest consumer due to its importance in batteries for electric vehicles.: 127 As of at least 2024, the DRC produces more than 70% of the world's cobalt, and most of this production goes to China.: 127 Chinese companies account for the majority of cobalt mining in the DRC.: 127
China is a world leader in refining Cobalt, with a 68% share in global supply as of 2022.
= Coal
=Coal is the most abundant mineral resource in China by a large margin.: 21 It exists in almost all Chinese provinces although major coal mining sites are largely located in northern and central China.: 38–39
As part of China's efforts to achieve its pledges of peak coal consumption by 2030 and carbon neutrality by 2060, a nationwide effort to reduce overcapacity resulted in the closure of many small and dirty coal mines.: 70 Major coal-producing regions like Shaanxi, Inner Mongolia, and Shanxi instituted administrative caps on coal output.: 70
= Copper
=Copper is one of the most critical industrial minerals given its importance in any electricity-related technology.: 210 It is essential in traditional power generating technology, but even more central to for wind power, solar power, and electric vehicle technology.: 210
As of 2010, China had more than 800 copper mines.: 189
China became the world's largest importer of copper in 2008 and has continued to be as of at least 2023.: 187
= Gold
== Iron
=Beginning in 2003 and continuing through at least 2024, China has been the world's largest importer of iron ore.: 23 Its domestic production peaked in 2007 at 402 million tonnes.: 102
China's domestic iron ore sector is highly fragmented among a large number of companies.: 102–103
The global iron ore market was subject to benchmark pricing negotiating.: 31 In 2006, Baosteel became the lead negotiator on the buyer side.: 31 In 2009, the Chinese government named China Iron and Steel Association (CISA) the new negotiator.: 109 The benchmark pricing system for iron ore ended in 2010 and was replaced with a spot market.: 31
In 2012, CISA along with the China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters and the China Beijing International Mining Exchange created CBMX, an iron ore spot trading platform in China.: 117–118 In 2014, the CBMX platform was transferred to a Chinese and foreign joint venture (the Beijing Iron Ore Trading Center Corporation, or COREX) and ownership was broadened to include trading houses and the four largest Chinese steel mills, in addition to CISA.: 118
In July 2022, China's central government created the state-owned entity China Mineral Resources Group, which is designed to better coordinate China's interactions with the global iron ore industry.: 49
= Lithium
=China is a world leader in refining lithium, with a 72% share in global supply as of 2022.
= Potash
=Potash is one of the three essential plant nutrients and is a major fertilizer ingredient.: 143 It cannot be manufactured and must be mined.: 143
China's domestic potash production comes from isolated mining sites located inland.: 157 Most potash deposits in China are concentrated in the deserts and salt flats of the endorheic basins of its western provinces, particularly Qinghai. Geological expeditions discovered the reserves in the 1950s but commercial exploitation lagged until China's Reform and Opening Up. The 1989 opening of the Qinghai Potash Fertilizer Factory in the remote Qarhan Playa increased China's production of potassium chloride sixfold, from less than 40,000 t (39,000 long tons; 44,000 short tons) a year at Haixi and Tanggu to just under 240,000 t (240,000 long tons; 260,000 short tons) a year.
The domestic potash production industry is heavily consolidated, with 21 mining companies operating in China (19 in Qinghai and 2 in Xinjiang Autonomous Region).: 158
Although China had greatly increased its potash production by the 2010s, as of at least 2024 the country is highly import dependent on potash.: 157 The two key importation enterprises are Sinofert (which is a Sinochem subsidiary) and Sino-Agri Group.: 158 China is generally concerned about further consolidation in the international potash industry following the 2010 merger of the two largest Russian potash exporters, Uralkali and Silvinit.: 176
The global potash market is subject to benchmark negotiations pricing negotiations.: 32 As of at least 2023, China is the lead benchmark negotiator on the buyer side.: 31
= Rare earths
== Uranium
=China's domestic market for uranium is highly concentrated because Chinese policy identifies uranium as a strategic resource and only select companies are authorized to mine it.: 201 The country's civilian nuclear industry and its mining are industry are largely concentrated in China General Nuclear Power Group and China National Nuclear Corporation, two state-owned enterprises that report to the State Council.: 201
China's uranium resources are significantly less than its needs.: 191 At most, 1% of known recoverable uranium reserves are located in China.: 191–193 Its domestic sources are low quality and therefore expensive to mine.: 199
Per China's Two Markets, Two Resources frame work and its One Third, One Third, One Third policy, China has significantly invested in developing domestic sources of uranium.: 197 In 2000, China's uranium output was 700 tonnes.: 197 By 2010, China had ten uranium mines producing approximately 1,200 tonnes annually.: 197 In 2015, China produced 1,616 tonnes of uranium, which was approximately 3% of global production that year.: 193 As of at least 2020, the country produced 1,885 tonnes annually, which amounted to 19% of its annual requirements.: 197
China's poor uranium resources have resulted in the country developing a strong foreign procurement strategy.: 199 China became the world's largest importer of uranium in 2008 and has continued to be as of at least 2023.: 187 Two entities in China account for most of the country's uranium importation.: 188
China's uranium procurement approach includes investment in foreign mining operations.: 187 From 2008 until at least 2024, China was one of only four countries to report non-domestic uranium exploration and development expenses.: 205 Chinese investment in Kazakhstan mines have contributed to Kazakhstan's current position as the world's largest exporter of uranium.: 188 Namibia has been another major destination for Chinese investment in uranium mining and Chinese companies have invested in Namibia's three biggest uranium producers: Husab, Langer Heinrich, and Rössing.: 205
See also
Mining in Hong Kong
Mining in Asia
List of mines in China
Enterprises:
Jiangxi Copper
Aluminum Corporation of China Limited
China Minmetals
China National Coal Group
China Nonferrous Metal Mining Group
Economy of China
Related industries:
Steel industry of China
Lithium batteries in China
Petroleum industry in China
References
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