China is the leader in extracting gold,
zinc, lead, molybdenum, coal, tin, tungsten, rare earths, graphite, vanadium,
antimony and phosphate, and holds second place in mine production of copper,
silver, cobalt, bauxite and manganese.A new report from
BMI Research shows the country's domestic mining output growth has
slowed dramatically and will average far below levels attained in the last
decade. Reasons for the slowdown are plentiful.
Besides lower prices, increasing costs,
depleting grades and low reserves, Beijing's drive to consolidate the country's
mining industry as part of its sharpened environmental policies has played an
important role in curbing new capacity and forcing production cuts says BMI.
So far this year domestic copper, nickel,
bauxite, iron ore and lead mining output have been curtailed (of course coal
too). Tin and zinc mining supply have reacted to higher prices, but
production growth is coming off a low base after two years of declines.
China's of consumption of metals and
minerals far outstrip domestic supply – in iron ore its imports constitute
nearly 80% of use and in copper it’s approaching 50% and for nickel
it’s already above that.
Chinese imports of metals and minerals,
particularly ores, have hit records recently with bauxite imports jumping
nearly 18% year on year, already all-time high levels of iron ore cargoes
have continued to grow while copper concentrate shipments are up more than
a third.
Falling domestic production could only
accelerate this trend and provide support for seaborne prices.
Source: Mining.com