In the 2017, the world economy recovered more than expected and mining was taking advantage.
The International Monetary Fund (IMF), in its latest World Economic outlook report, has raised global growth forecasts for the next two years by 0.1%, a growth rate of 3.6% in 2017 and 3.7% in 2018, and a rise in growth forecasts for major economies, including China. The IMF estimates that 3/4 of the world’s economies will grow faster this year, the biggest increase in the global economy in nearly 10 years.
Data show that over the past year, prices of major metal ore products have fluctuated frequently, and shortages of major metals and minerals have continued to intensify. In the first half of 2017, the world’s top ten mining companies operating performance growth, some companies share prices than the early 2016 rose 4 times times. Important Mineral Resources countries, in addition to Peru’s GDP growth continues to decline, Canada, South Africa, Chile, Australia’s GDP growth rate between the 1%~3%, Brazil is gradually out of recession, Russia rebounded quarterly, the Chinese economy is gradually stabilising. There are signs that the global mining bottoming is starting to emerge.
In the recent China Mining industry chain Conference, a number of experts and scholars in the mining field said that after four years of sinking in 2012, the global mining industry in the new round of economic recovery or will usher in another active period. Combined with new opportunities in the “All along” mining cooperation, the global mining industry is opening a new era.
Important mineral exploration and development investment rebound
After 4 years of continuous decline, the global mineral exploration and development investment showed signs of recovery.
The International Monetary Fund (IMF) report predicts that emerging and developing economies grew by 4.6% in 2017 and 4.8% in 2018. Among them, China grew 6.7% and 6.4% respectively, Russia grew 1.4% and 1% respectively, Brazil grew 0.3%, 1.3% respectively, India grew 7.2%, 7.7%, and South Africa grew 1% and 1.2% respectively.
Jingweidong, Director of Department of Land and Resources Information Center, said that China’s economic growth is stable, India may become the world’s sixth largest economy. The rebound in iron ore prices has led to a gradual downturn in the economies of mineral exporters such as Brazil, but the slump in oil prices has made the economies of Russia, Venezuela and other countries still more difficult. With the development of mining projects and the construction of infrastructure, some African countries will show rapid growth.
According to the SNL Metals and mining Group survey, the global non-ferrous metal exploration investment in 2016 was 6.89 billion U.S. dollars, down 22% from the previous year, the company is expected to stabilize the recovery in 2017.
The country’s mineral exploration investment was $783 million trillion in the first half of 2017, up 21% from $644 million a year earlier, according to the Australian Bureau of Statistics. Gold and base metals picked up a larger percentage of ore, while iron ore and other minerals grew less.
The World Class copper mine project, such as Democratic RCD-Kakula, continues to make important progress. May, Kakula announced the new resource volume: Copper Metal presumed resources volume 11.3 million tons, copper grade 3.23%, speculate resource volume 1.36 million tons, copper grade 2.26%. At present, the whole of the Kakula-copper mine project along the length of more than 10-kilometer, ore resources of 1 billion tons, will be among the world’s top three copper ore ranks.
Ecuador’s Cascaville copper-gold mine has continuously made new exploration results, repeatedly announced that drilling found thick near-kilometer mineralization, individual drilling more than 1200 meters, the project is expected to be the first announcement of resource volume at the end of the year.
Mongohamagote copper and gold exploration continues to achieve new results. Among them, the Aletantal-covered deposit is 646 meters, copper grade 0.51%, gold 0.87 grams/ton, net Mountain deposit 264 meters, copper grade 0.56%, gold grade 1.46 grams/ton.
At the same time, the exploration of lithium ore and metallogenic theory have made important progress. Democratic Congo’s Mannono (Manono) Lithium mine is considered to be the world’s largest hard rock type lithium mine, is the “Escondida Dida” in the lithium mine, the prospective ore resources amount 1 billion ~12 billion tons, lithium oxide grade 1.25%~1.5%. US scientists have discovered that the lava from the super volcanic eruption cooled and formed rocks, releasing lithium in weathering and erosion and accumulating lithium-clay deposits. The discovery also helps explain the genesis of lithium deposits in South America’s “lithium triangle”. The volcano is dense and the lithium from the volcano is eroded and weathered and enriched in the Alpine Salt Lake.
Jingweidong said the global survey budget data released by the S & P has entered the rising channel. The 2017 nonferrous metal exploration budget was 7.95 billion U.S. dollars, the first rebound since 2012. Copper, cobalt, lithium, graphite, gold, zinc and other minerals have become the main target of exploration, and have made some important discoveries, will become a new trend of mineral exploration.
Jingweidong said that after several years of difficult operations, mining companies to improve profitability, profit growth, market capitalisation increased, financing is no longer so difficult. According to the world’s top ten mining companies statistics, the first half of the total net profit of 16.5 billion U.S. dollars, is twice times the same period last year, close to the year 60%. Profits of the big three iron miners rose more than 60% year-on-year.
Mining industry’s position in economic development is rising
The research report of the Mineral Resources Situation Analysis Group of China National Institute of Land and Resources Economics said that overall, both developed and developing economies have taken mining as the main driving force for economic development, a phenomenon that has been rare in recent years.
Zhang Hongtao, the former chief engineer of the State Council, said that with the recovery of the world’s emerging economies, a pick-up in manufacturing and trade, stronger market confidence and stable commodity prices, exports of commodity emerging markets resumed growth.
“In the next 20 years, the global economic development will not change the demand for resources, the resource shortage fundamentals will not change, the global development trend will not end.” Moreover, China’s new drive for economic development has not been fully released. In the future, global energy demand will remain strong, with more than half of China’s energy needs. “Zhang Hongtao said. However, in a single energy consumption, oil remained the dominant fuel, accounting for 1/3 of the total, and in 2016, after a 15-year (1999 ~2014) decline, the oil market share increased for the second consecutive year and the coal share fell to 28.1%.
“Despite China’s superior mineral resources, rare earths, tungsten, tin, molybdenum, antimony, vanadium, titanium, tantalum, magnesite, fluorite, graphite, barite, bentonite, talc, Glauber’s salt and other minerals identified resources reserves ranked first in the world, of which rare earth reserves accounted for 80% of the world, antimony ore accounted for 40%, titanium ore reserves are the sum of other countries reserves, Tungsten reserves are 4 times times the sum of other countries ‘ reserves, but the situation of the shortage of minerals remains difficult to change. Zhang Hongtao said that the demand for resources will remain high for a long time, from the global economic development trend, mining in the economic growth of the share is rising.
This trend is being confirmed by other countries around the world. U.S. President Trump, after his inauguration, to fulfill his campaign commitments, issued a variety of policies to support mining development. This March, Trump signed the “energy independence” of the Executive order. July, Trump announced the abolition of the Obama administration in the restrictions imposed on overseas coal-fired power plants to provide financing policy. In addition, the Obama administration’s ban on federal land for coal leases was lifted in the lease of federal land. This series of policies has led to a sharp rebound in U.S. coal production and exports.
Brazil has made drastic changes to its mining management system to promote its mining industry. On the one hand, the Mineral Development Bureau has been transformed into a national mineral administration responsible for mining supervision, with the aim of increasing transparency and reducing bureaucracy. On the other hand, the mining entitlements are raised to convert the tax base from net sales to gross revenue and to introduce floating tax rates in accordance with price changes. Take iron ore, for example, if the price is less than 60 dollars/ton, the tax rate is 2%, the price is 60 USD/ton ~70 USD/ton, the tax rate is 2.5%, the price is 70 USD/ton ~80 USD/ton, the tax rate is 3%, the price is 80 USD/ton ~100 USD/ton, the tax rate is 3.5% If above 100 USD/ton, 4%. In addition, the introduction of annual inspection tax on mining activities in Brazil, according to the size of the company and the stage of the project, the mining companies each year to pay 500~5000 of the tax.
Other countries and regions that have decided to raise taxes and increase taxes are still many. For example, Australia will raise the gold royalty rate from 2.5% to 3.75%, the Democratic Congo to restore mining companies import value-added tax, Tanzania levy mineral Export Inspection tax, India levy gold sales tax, the United States to raise the coal right gold tax rate.
In some countries, national mining companies have been conceived or established to strengthen national control over mining and improve competitiveness. February, Bolivia established a national lithium mining company. April, the Chilean national copper Company set up a lithium mining branch. Ecuador approved the establishment of a national mining company in June.
In order to strengthen the design and management of the top level of mineral resources, some countries have established specialized agencies. In March, for example, Colombia established the National Water Resources Commission, and in April Argentina established the Federal Energy Commission.
There are signs that mining is on the rise in the world’s leading mining-producing countries, both in terms of industry orientation and management design.
Global mining bottoming out
“China’s economy is generally good, new business mode, new model of China’s economic support is increasing, private investment is low, enterprise financing is difficult, the industrial structure is unreasonable, the resource demand is weak, the geological prospecting benefit decline and other challenges still cannot be neglected.” China’s economic integration into the global economy, we must face the international situation caused by instability and uncertainty. “Zhang Hongtao predicts that global demand for energy minerals is expected to grow and that the price of important metal minerals is rising.” Most of the “three dilute” mineral resources are in short supply, international mineral prices have risen comprehensively, and mineral exports of important mineral minerals have rebounded sharply.
Zhang Hongtao said that the innovation drive has become the new impetus of the resource industry of the Times, and environmental protection has become an important indicator of China’s energy structure adjustment. Green sustainable development has become a global consensus, hydro, wind, photovoltaic, nuclear power, shale gas, combustible ice, geothermal and other renewable clean alternative energy will maintain high growth.
The economic outlook for the US, Europe, Japan, China and other emerging markets has improved, said Ping, a researcher at the Development Research Center of the Chinese Geological Survey. In the 2017, the “simultaneous growth” of the global economic recovery in various economies has not occurred in the past decade.
Affected by the above factors, the global Mining index overall out of the downturn, into a stage of slow recovery. The junior high school level company financing, initial resource quantity discovery all presents the fluctuation type to rise. “Ping said that 2017 global solid mineral exploration investment bottoming up, the solid mineral exploration budget has risen for the first time since 2012, up 14% from 2016 to $7.95 billion.”
“Investment volatility in geological exploration can best reflect the cyclical cycle of the mining industry, which can be used as a barometer of mining industry.” Yang Bing, former director of the Center for Nonferrous Metals Mineral Geology, said that during the ~2017 years of 1991, the mining industry experienced two cyclical fluctuations, one in 1993 ~2002 and the other 2003 ~2016 years.
“According to the cycle theory, the mining recession should be bottoming out in 2016 and rebound in 2017.” Yang Bing said that at the China International Mining Conference in September 2017, most of the authoritative experts attending the meeting endorsed this point: 2017 will be the starting point for a new cycle of mining.
Data show that in September 2016 ~2017 September, the price of mineral products rose to varying degrees. Prices of copper, lead, zinc, aluminum, lithium and cobalt rose 35%, 27.4%, 38%, 36%, 75% and 118% respectively. Profits in China’s mining industry have increased sharply. At the same time, global mining financing mergers are also becoming active. According to the statistics, 2017 two financing amount of 71 billion U.S. dollars, an increase of 15%, the first half of the merger has been more than 2016, the acquisition amount of 28 billion U.S. dollars, compared with the same period last year 14.6 billion U.S. dollar growth 92%, mergers and acquisitions case growth of 3.3% to 222.
A global mining report released by PwC in June showed that after a sharp fall in minerals in the past few years, the world’s minerals are picking up, companies are starting to profit and their balance sheets are stronger. According to PwC, the top 40 mining companies in the market value, in 2016, the 40 mining companies total profit of 20 billion U.S. dollars, and 2015 losses of 28 billion U.S. dollars.
“The global mining industry in the short term, after 2012, mining investment continued to decline, the withdrawal of economic capacity, there are capacity consumption, the lack of new capacity input, resulting in the market will be conducive to the direction of the supply side.” Yang Bing said that in the long run, the mining industry continues to a good foundation more solid: “Along the way”, China’s demand for mineral resources will remain high, China’s environmental requirements to further reduce the old capacity, new capacity growth will be affected by a separate source.
“The technological revolution will change the pattern of resource demand. “However, Yang Bing said, this round of economic growth will not appear similar to the previous round of the super cycle, it is difficult to reproduce the extraordinary development of such a large economy as China, where other emerging economies such as India and ASEAN are gradually industrializing, and the demand for mineral resources will usher in a new cyclical growth, but it is noteworthy that the level of competition in the industry will tend to increase , demand changes and price fluctuations will be more frequent.
