Mineral resources are the cornerstone of materials needed for China's national economic and social development. The country even counts on its mineral resources to satisfy 90 percent of its energy demands and over 95 percent of raw materials for its industrial and agricultural production. Fueled by the bursting population and accelerating industrialization, the conflict between mineral demand and supply in China is looming large. Highly dependent on imports, the sustainability of its mineral supply has been clouded in severe doubt.

It is currently imperative for China to further institute a mineral exploration and reservation strategy, noted Chen Yuchuan, a researcher at the Chinese Academy of Engineering at a recent forum on the resource development in west China. "A secure and sustainable mineral supply is the key to tackling the resource strain, which poses a headache to the economic development of the country," said Chen.

Scarce foundations

Currently, 171 mineral ores have been identified in China, including 158 minerals with proven reserves. There are over 200,000 mineral deposits in the country and more than 20,000 of those have been surveyed. According to statistics from the Ministry of Land and Resources, the potential value of China's mineral reserves topped 92.63 trillion yuan ($12.87 trillion) at the end of 1997. Equal to 12 percent of the world's total, China's mineral reserve volume ranked third in the world after the United States and Russia. However, due to the huge population, its per-capita mineral reserves ranked 53rd, or at 58 percent of the world average.

Statistics show that China is unrivaled in its reserves of tungsten, antimony, rare earth, titanium, magnesite, graphite, barite and bentonite. It also pulls ahead of most other countries in coal, molybdenum, fluorite, diatomite, mirabilite, strontium and wollastonite. Pampered with advantages in both quantity and quality, these minerals are quite competitive in the international market. On the other hand, the country falls comparatively short of pillar minerals of good quality, such as petroleum, natural gas, steel, nickel, manganese, chromium, copper, aluminum and sylvite.

As Chen said, China boasts rich varieties and large volumes of mineral resources, but is disadvantaged by its per-capita reserves. Worse still, the country has been burdened with poor-quality mineral resources such as lean ores, mid-and-small mines and inter-grown ores, and has sparse resources of major minerals, large mines and rich and simple ores. All these unfavorable conditions have presented the country with major difficulties for mineral exploitation. Uneven distribution of mineral resources further adds to its exploitation costs. "Extracted at higher costs, these minerals are deprived of the competitive edge in the global market," Chen noted.

Tight supply

The per-capita demand for mineral resources has swelled in proportion to the pace of economic development. Before maturing, the mineral prospect of each country is destined to undergo a process from being immature and underdeveloped to becoming moderately developed, and finally to achieving a state of its highest development.

China is currently positioned in a phase of rapid economic development, triggering a huge appetite for mineral resources. "If the development of China's mineral resources falls behind that of its population and economy, the mineral strains will become a significant drag on its economic boom," Chen said. "For the sustainable development of economy and society, strains on mineral resources must be reckoned with."

Registering a sharp economic growth rate since the late 1990s, China has experienced a surge in mineral consumption. However, it will still be able to quadruple its gross domestic product at the same time it doubles its mineral resources. In the future, energy prices are expected to remain at high levels and have a heavy weight on the domestic and global commodity markets.

At present, China is endowed with bright exploration prospects of most minerals, except for rich iron ore, chromium, sylvite, platinum and diamonds. It is also well conditioned for ore-forming, with possible new reserves already discovered but so far unproven. Ore zones in east China and deep and peripheral old mines also exhibit great mining potential.

Chen attributed the depletion of domestic mineral resources to the escalating consumption of minerals and the absence of some ores in China. In the last 10 years, China's investment in mineral exploration has also been decreasing.

Reserves of most minerals are still ample enough to fuel economic development up to 2020. Overseas resources can be utilized to contribute rare minerals such as oil, rich steel ore, chromium, manganese, copper, aluminum and sylvite. China should also further avail itself of the advantages in rare earth, tungsten, molybdenum, antimony, coal and some non-metal ores to realize export.

Countermeasures

Compelled by the shortages of certain minerals, the Central Government has enacted a large number of counter-measures. Last year, the State Council held the National Geological Work Conference and pledged to soothe the tight mineral supply. Accordingly, general and detailed surveys of 13 coal bases have been initiated and uranium exploration has been enhanced around the country. In the aftermath of the newly released Method of Managing the Geological Exploration Fund, mining investment has been on a rise. China is now accelerating its pace of mineral exploration.

Experiences have testified to the significance of mineral reserves and supply for national security. "A spate of countries have put in place a complete mineral strategic reserve system so as to ensure national security, such as the United States, Japan, France, Germany, UK and South Korea," said Wang Mier, General Secretary of Geological Society of China. "As a result, it has become an urgent task for China to craft a safe mineral supply and reserve strategy amid global economic turbulence.

"China's mineral consumption has far outpaced exploration, hurting the helping hand of mineral resources to national economic development," Wang added.

According to Chen, China should forge ahead with three national strategies to curb the drain of mineral resources. First, aggressive efforts should be made toward mineral exploration in order to wean mineral consumption off imports and to rely more on domestic sources. Second, the distribution of global mineral resources compels allocation in a more rational, scientific and fair manner. Third, the recycling and environmental protection of mines are supposed to be put on agenda.

On a smaller scale, China is on course to adopt a set of effective countermeasures. First, basic geological investigations should be launched to pave the way for comprehensive exploration. Second, investments in mineral exploration and general surveys on mines should be strengthened to hedge against risks of commercial exploration. Besides, China should build new mineral bases in the western regions to boost mineral exploration. The reach of exploration will also be expanded to deep and peripheral old mines to sustain their life circles. Third, mines deserve adequate environmental protection and pollution treatment. It is also necessary to foster a mature mineral market featuring orderly construction and sound management. Fourth, China can also look to overseas mineral resources to ease its mineral shortcomings. On the other hand, abundant minerals should be utilized on the world market.