China Mineral and Metal Group (China Minmetals), the nation's largest metal trader, is in discussions with a number of global miners to jointly explore the international market, as part of China's endeavours to diversify and secure raw material supplies.
"We attach great importance to the (State-initiated) 'Go-global' campaign, and China Minmetals is negotiating with different countries to explore a number of deposits," Miao Gengshu, Minmetals' president, told China Daily while he was attending the 2004 China International Institute of Multinational Corporations' Conference over the weekend.
The company is holding talks with the Chilean Government about a copper mining project in Chile's Gabi region, Miao confirmed.
"We are still negotiating with the Chilean side," Miao said. "No agreement has been made."
He also said Chile wants the project to subject to international bidding.
The venture would be a medium-sized project, involving a total investment of about US$5 million, Chile's Mining Minister Alfonso Dulanto said during his visit to China in late May.
China is the world's biggest copper consumer while Chile is the largest provider.
China Minmetals is also in discussions over a mining project in Brazil, but Miao refused to release further details.
The company already has good relations with Brazilian counterparts. Miao is China's president of the China-Brazil Business Council, which was officially established during Brazilian President Luiz Inacio Lula da Silva's visit to China in May. The Brazilian president of the council is Roger Agnelli.
He is also president of world's largest iron ore supplier, Cia Vale do Rio Doce.
It is widely anticipated that China Minmetals will increase its presence in Latin America.
The Brazilian move is the latest in China's efforts to secure its raw material needs to feed a booming economy.
China is in need of raw materials such as iron, steel, copper and alumina to cater for its construction and production spree.
China Minmetals now has an alumina mine in Australia, with a production capacity of 3 million tons annually, Miao said.
Commenting on the growth of the company, Miao says China Minmetals' expansion will continue at a more rapid pace.
Although the company's growth rate may drop off marginally in the second half of the year, the full year performance will still be outstanding, he said. Records are expected to be broken.
Its Shanghai-listed arm, China Minmetals Development, reported a 350 per cent increase in profits to 295 million yuan (US$35.67 million) during the first quarter of the year.
And China Minmetals, as a whole, notched up a trade volume of US$2.6 billion during the period.
Miao also said the government's recent macrocontrol measures to cool down the economy will only be a good thing for producers and traders of minerals and metals.
"The measures will help rationalize the prices of some steel and iron products, and make Chinese goods more competitive in global markets," he said, without elaboration.
China Minmetals, a traditional State-owned trader, has been focusing on industries to reduce its exposure to the competitive trading market and make it a leader internationally.
After years of expansion within the mining sector, the company now possesses about 60 per cent of China's tungsten ore resources.
Its recent alliance with Handan Steel Group also enabled the company to occupy a larger slice of the iron and steel market.
(China Daily July 12, 2004)
