According to some of China's leading geological authorities, the
considerable consumption of its mineral deposits and oil reserves
in China means that in the next thirty years demand may exceed
production by as much as 2-5 times, slowing China's growth rate
considerably. A report released from the Global Mineral Resource
Research Center and the Chinese Academy of Geological Sciences has
outlined what this crisis is going to look like. Apart from coal,
of which there is an abundance, there is huge demand for oil,
natural gas, copper, and aluminum.
According to the experts, the dominance of China's superior
minerals such as tungsten, rare earth minerals, antimony and tin
have shrunk in the last ten years due to the extreme consumption.
The Nandan tin mine disaster saw the over exploitation and
corruption of the world's largest tin mine, that will certainly
lead to resource depletion now that it has closed.
China's rare earth and tungsten resource mines are strong in world
markets, competing with, and defeating, the US and Australia by
using cut-priced tools. However, according to Wang Gaoshang, of the
geological research centre, China has not won out entirely. He
says, "though countries like Australia and the US lose out in terms
of mine production, they make greater benefit than China by having
imported cheaper minerals in the first place. China has wasted its
resources, disrupted the market and has had heavy enterprise
loses."
The fact that China needs such a quantity of minerals is affected
by the fact that it cannot produce such a quantity. For example, it
produced 7.838 million tons of nonferrous metals in 2000, equaling
consumption. However, production of copper and aluminum does not
meet demand as resources in it are depleting. Each year China must
now import large amounts of copper.
Wu
Rongqing, a researcher with the Institute of National Land
Resources, says, "China has very large deposits of bauxite but
relatively low quality and high production costs. Under the current
tax policy, producers have to select a high quality bauxite mine to
make a profit with usually only one ton of bauxite ore being used
out of four. Producers facilitate quality ore from migrant
work-teams, which has been very wasteful to the natural resource in
the last decade, although costs have been cut.
The Global Mineral Resource Strategy Research Centre predicts that
China needs 240 to 260 million tons of steel by 2012 2014 and will
need 5.3 to 6.8 million tons of copper by 2019 - 2023. Aluminum is
greatly needed in China and in the next three decades this will
increase. China may well consume 13 million tons of aluminum
between 2022 2028, which will account for half the world's
resource.
This is only half the story, according to the experts. China's iron
ore can only support the iron and steel industry for another twenty
years. This means that it needs 300 million tons of ore in the next
twenty years, whose iron content accounts for half of China's
verified iron deposit. In addition, copper demand exceeds its
deposit wealth by several times and during the same period,
reaching between 50 to 60 million tons. Raw aluminum will need to
be imported to the tune of 100 million tons, equal to the total
domestic aluminum content of the verified bauxite deposit, Wang
Gaoshang said.
However, although this is not news in China, and the theory is
being revised, no big solution has been found, according to Guan
Fengjun, dean of the Economic Institute of National Land Resource.
Insiders say that the state attaches great importance to building
up a reserve system but provides no specific measure how to do
this. As it is a misconception that China is deliberately depleting
its resource wealth and has mineral wealth that is has not claimed
it has, state policy can be less than transparent.
Guan Fengjun also said that what China needs most of is oil, rich
iron ore, manganese ore, copper ore and sylvite. As importing is an
option, China has staggering import figures in this area: in 2001,
60.26 million tons of oil, 92.31 million tons of iron ore in sand
form, 1.71 million tons of manganese ore, 2.26 million tons of fine
copper ore and 5.43 million tons of potash fertilizer were
imported. Joint development cooperation of foreign reserves is an
option and venture possibilities still exist with middle Asia,
south Asia, Latin America, and Africa and particularly the
former.
Wang Gaoshang has said that many neighboring countries have wealthy
mineral deposits that are urgently required by China. Russia and
Kazakhstan are rich in oil and natural gas, copper and gold, with
Kazakhstan owning chrome that China needs. Thailand and Laos have
sylvite.
But the good news is that low prices in global mineral markets may
stay around for ten to fifteen years and this may give China the
opportunity to utilize global resources. But one truth that China
must face is that its demands for minerals seriously outnumbers its
verified deposit by many times. The China/Middle-asia/South-asia
circle is the ideal source for satisfying many of its needs but due
to the nature of international politics, a difficult prediction to
qualify.
(China.org.cn translated by Li Liangdu, March 11, 2003)