[SMM topic] "Belt and Road Initiative" brings Development opportunity for Nonferrous Metals Industry

On New year's Eve, Chinese President Xi Jinping delivered a 2018 New year's message, stressing that he will actively promote the joint construction of "Belt and Road Initiative."

The implementation of the "Belt and Road Initiative" strategy marks the turn of China's international strategy after entering the new norm. in the next five to ten years, China should take advantage of the strategic opportunity of "Belt and Road Initiative" to break down trade barriers. Shape a new Silk Road with more open trade.

Non-ferrous industry is one of the 12 key industries for international production capacity cooperation specified by the State Council. In the positive response to the national "Belt and Road Initiative" initiative, the non-ferrous industry is not only an important participant, but also an important beneficiary.

What does Belt and Road Initiative bring to China's nonferrous industry?

1. Allocation and complementarity of metal resources

Participation in the construction of "Belt and Road Initiative" is conducive to the integration of China's non-ferrous metal industry into the global resource allocation and enhance the degree of resource security. The cooperation in the field of mineral resources in China should be regarded as an important and leading industry for non-ferrous industry enterprises to participate in the construction of "Belt and Road Initiative." some countries along the route are rich in mineral resources and are the main supply base for mineral raw materials in the world. Public data show that nearly 200 mineral resources, valued at more than $250 trillion, or 61 per cent of the world's total, are stored in the region. Among them, the world's largest reserves of coal in China and Russia; Uzbekistan is known as the "gold country"; Southeast Asian countries have 2500 kilometers of tin ore belt.

More importantly, the cooperation of mineral resources among countries is highly complementary. For example, nickel and iron in Indonesia and the Philippines, bauxite and iron in Vietnam, potash in Thailand and Laos are all bulk mineral products that China urgently needs to import. China's rich rare earth and molybdenum resources, as well as the vast market demand can also be used by relevant countries.

2. International metal capacity cooperation

At present, one of the biggest problems faced by China's metal industry is overcapacity. "Belt and Road Initiative" is conducive to China's non-ferrous metal industry to carry out international capacity cooperation, transfer our production capacity, as well as technology, capital and so on. it is not only beneficial to the countries along the route, but also we can seize the opportunity to optimize the industrial structure of the mining industry. Non-ferrous metal industry is the "forerunner" of international capacity cooperation. in recent years, the pace of "going out" has been accelerating, the scale is getting larger and larger, the level is getting higher and higher, and remarkable results have been achieved. Active participation in the "Belt and Road Initiative" construction is conducive to China's non-ferrous metal industry enterprises to seize the historical opportunity of a new round of international capacity cooperation, in-depth exploration of new models and new ways of foreign economic cooperation, and fully integrate the industry's internal and external advantage resources.

3. Drive demand for metal exports

"Belt and Road Initiative" is beneficial to the improvement of supply structure and the promotion of consumption and export in China's non-ferrous metal industry. According to the analysis of the industry organizations, the infrastructure construction along the "Belt and Road Initiative" line, such as railway transportation, oil pipelines, industrial plants, electric power investment, and so on, It will effectively stimulate the growth of consumption and export of at least six non-ferrous metal varieties, such as copper, aluminum, lead and zinc.

The general pattern of "Belt and Road Initiative" and "six corridors, six roads, many countries and many ports" put forward by General Secretary Xi Jinping has gradually taken shape. the "six corridors" refer to the opening of the six major corridors for international economic cooperation. Including the New Eurasian Continental Bridge, China, Mongolia and Russia, China-Central Asia-West Asia, China-Indochina Peninsula, China-Pakistan, Bangladesh, China, India and Myanmar Economic Corridor. "six roads" refers to the smooth opening of the six major road networks to promote the interconnection of railways, highways, waterways, air roads, pipelines and information highways. "multinational" refers to the cultivation of a number of fulcrum countries, in accordance with the needs of promoting the construction of "Belt and Road Initiative", combined with the enthusiasm of the countries along the route, In Central Asia, Southeast Asia, West Asia, Europe, Africa and other regions to cultivate a number of "Belt and Road Initiative" fulcrum countries. "Multi-port" refers to the construction of a number of maritime fulcrum ports, around the construction of the Maritime Silk Road in the 21st century, through a variety of ways to promote a number of important port construction with outstanding geographical advantages and obvious supporting role.

4. Improving the level of Technology and equipment in Nonferrous Industry in China

It is beneficial to perfect the key technology level and improve the equipment manufacturing ability of the nonferrous metal industry in our country. "Belt and Road Initiative" connects more than 60 countries in the world, with an unprecedented distribution and scope, with a total population of about 4.4 billion, accounting for about 63 percent of the world's total population, and an economy of about 21 trillion US dollars, accounting for about 29 per cent of the world's total. Among them, North Asia, Central Asia, Southeast Asia and other non-ferrous metal resources-rich countries and regions, for China's non-ferrous industry mature technology, high-end equipment, engineering services, technical support and so on have urgent needs and strong willingness to cooperate.

Kujiu Oo of the Geological Survey and Mineral Exploration Bureau of the Ministry of Mines says Myanmar is rich in mineral resources but lags behind in traditional development methods. "at present, further mineral exploration and development should be carried out in the eastern part of Myanmar. We are in the process of revising the relevant legal provisions to attract foreign investors in the hope of introducing advanced technology and methods to help Myanmar solve the problems encountered in mining development. "

The opportunity of Cooperation between Chinese Enterprises and "Belt and Road Initiative" countries along the Road

Belt and Road Initiative involves a total of 64 countries, covering a population of 4.4 billion, for domestic non-ferrous enterprises to promote overseas development projects have brought a once-in-a-lifetime opportunity.

Among them, cooperation in the field of mineral resources is an important part of the "Belt and Road Initiative" strategy. Some countries along the route are rich in mineral resources and are the main supply base of mineral raw materials in the world.

Some international organizations believe that the Central Asian region is also very rich in mineral resources. At present, 17 copper deposits of more than 10 million tons, 6 molybdenum deposits of more than 500000 tons, 23 lead-zinc deposits of more than 5 million tons, 8 antimony deposits of more than 300000 tons, 4 rare earth deposits of more than 1 million tons and 30 uranium deposits of more than 20,000 tons have been discovered. The reserves of gold, zinc, aluminum, antimony, manganese, chromium and other mineral resources in this area are in the forefront of the world.

China has set up the first "Belt and Road Initiative" mining cooperation private think tank, enterprises and institutions can obtain more than 50 kinds of mineral resources reserves, production, development status of 65 countries along the route; Guangxi Zhuang Autonomous region will undertake the construction of the first Cambodian National Geological Laboratory; The first private equity fund to focus on "Belt and Road Initiative" mineral resources and related industries was officially launched in Beijing, raising a target of 10 billion yuan, ending by the end of this year. After deciding to cooperate with China's Guangxi Zhuang Autonomous region in the construction of a national geological laboratory, Ditina, state secretary of the Ministry of Mines and Energy of Cambodia, said: "We hope that in addition to benefiting China and Cambodia, we will also bring more benefits to the countries along the route. We look forward to more exchanges with China's land and resources departments in the future. "

Copper Resources Cooperation:

China is a large country of copper production and consumption, but copper resources are very scarce, the degree of dependence on foreign countries is as high as 80%. In order to improve the protection of copper resources, in recent years, Chinese enterprises have "gone out" to invest in mines. The promotion of China's "Belt and Road Initiative" strategy is expected to open up new space for China's foreign resources development.

Li Liangang, deputy general manager of Minmetals Nonferrous Metals Co., Ltd., said that there is great potential for the development of copper resources along the "Belt and Road Initiative" line. The main copper-producing countries along the "Belt and Road Initiative" include 12 countries, including Indonesia, Russia, Poland, Kazakhstan, Mongolia, Iran, and so on. these countries together account for 16 percent of the world's copper concentrate production capacity and 23 percent of the world's crude copper production capacity. Refined copper accounts for 19 per cent of the world's capacity.

China Nonferrous Mining Group, China Gold and other central enterprises have attacked, in Kazakhstan, Mongolia, Myanmar, Kyrgyzstan and other places to invest in copper, nickel, zinc, gold and so on.

Details of some of the projects are as follows:

Cooperation Project: Shengtun Mining Congo (Gold) Mine put into production

Shengtun Mining has led the investment in Africa's Democratic Republic of the Congo (DRC) annual production of 3500 tons of cobalt, 10, 000 tons of copper comprehensive utilization projects. Its products are cobalt hydroxide and electrowinning copper. The daily treatment of ore by the smelter is about 1750t, the annual output of cathode copper is 10000 tons after production, and the crude cobalt hydroxide containing 3500 tons of cobalt metal is recovered. At present, the project is in the implementation phase and is expected to go into production in the first half of 2018.

Cooperative project: Zijin mining Camoa copper project

In October 2016, the Kakoula section of Zijin Mining's Democratic Republic of the Congo (DRC) Kamoa copper project discovered 9.4 million tons of new copper resources. This discovery brings the overall resource reserves of the copper mine to 33.4 million tons, equivalent to 1 percent of China's current copper reserves, with an average grade of 10 times that of Zijinshan Copper Mine, making the mine the largest copper mine ever discovered on the African continent. Among the top ten copper mines in the world.

Zijin official website shows that the designed mine has a production life of 45 years (designed according to more than 24 million tons of copper resources), and the products are crude copper and sulfuric acid. Production scale: 6 million tons / year in the first four years and 12 million tons / year after the fifth year. Smelting scale: 200000 tons / year in the first 4 years and 400000 tons / year after the fifth year. The first phase of the project is scheduled to be put into use in 2018; the second phase of the project is scheduled to be put into use in 2022.

Cooperation Project: Zijin Mining Democratic Republic of the Congo Musonoy Project:

In 2015, Zijin Mining seized the opportunity of the downturn in the mining market and worked hard along the "Belt and Road Initiative" to complete the Pogra gold project in Papua New Guinea and the equity acquisition of the Congo (Gold) Kamoa Copper Mine, among them. The Camoa copper acquisition has become the largest overseas acquisition of copper by a Chinese company. According to the data, the Pogra gold mine contributed nearly 500 million yuan in profit income one year after the acquisition. The new discovery of 9.39 million tons of high-grade copper resources in the Democratic Republic of the Congo (au) Kamoa Copper Mine has resulted in the overall project of Camoa Copper Mine obtaining more than 33 million tons of total copper metal, equivalent to 1 percent of China's current total copper resources. As a result, it has become the largest copper mine discovered on the African continent. "View details

Cooperative project: Kuru-Tegelek copper and gold project

China Gold Group has incorporated its first overseas subsidiary, Kichi-Chaarat, in Kyrgyzstan, acquiring the Kuru-Tegelek copper and gold mine.

Cooperation Project: China Minmetals and Bo Copper Group sign long-term purchase contract of Electrolytic Copper

On June 20, 2016, during General Secretary Xi Jinping's visit to Poland, he Wenbo, chairman of the Group, and Scora, chairman of the Polish Copper Group, signed long-term procurement contracts for electrolytic copper with a total value of about US $3 billion on behalf of the two companies. The cooperation between Minmetals and Polish copper has played an incomparable role in balancing China's trade surplus with Poland and improving diplomatic relations between the two countries.

Cooperative project: Tromok project

Chinalco Peru's Tromok Copper Mine, China's largest overseas copper project, has been put into production and the world's largest single copper ore dressing production line has been put into operation.

The copper mine has about 12 million tons of equivalent copper metal resources, accounting for 19 percent of the total domestic copper resources in China. the project design annual copper concentrate contains 220000 tons of copper, accounting for about 18 percent of China's own domestic output, and ranks among the top 20 copper mines in the world. The design service life of more than 30 years will effectively alleviate the shortage of copper resources and copper concentrate supply in China.

Nickel resources cooperation:

Indonesia is the largest country in ASEAN, rich in mineral resources, the main metal minerals are bauxite, nickel, iron ore sand, copper, tin, gold, silver and so on. Among them, the reserves of bauxite resources in Indonesia are 1.9 billion tons, and the proven reserves are 24 million tons, mainly distributed in Gbarnga Island and Belidong Island, West Kalimantan Province and Riau Province; Nickel resources reserves of about 1.3 billion tons, proven reserves of 600 million tons, mainly distributed in the Maluku Islands, South Sulawesi Province, East Kalimantan Province and Papua Island; Iron ore is mainly distributed in the southern coast of Java, West Sumatra, South Kalimantan and South Sulawesi, with a total reserve of 2.1 billion tons, but less development and utilization. Copper deposits are mainly distributed in Grassberg, Inter-Mediate ore Zone and Big Gossan regions of Papua Island and Columdaro Province of North Sulawesi Island. the resource reserves are about 66 million tons and the proven reserves are 41 million tons. Tin deposits are mainly distributed in the western Bonga Belidong, Jingliwen Island and the east coast of Sumatra Island, with resource reserves of 1.46 million tons and proven reserves of about 460000 tons. Indonesia has about 1.91 million tons of gold resources and 3200 tons of proven reserves, mainly in Sumatra, Sulawesi, Kalimantan and Papua.

From January to November, Indonesia's exports to China totaled US $19.129 billion, an increase of 44.49 percent over the same period last year, accounting for 13.69 percent of Indonesia's total exports. Indonesia imported US $31.782 billion from China, an increase of 15.31 percent over the same period last year, accounting for 26.46 percent of Indonesia's total imports of non-oil and gas products. the share of imports and exports has increased, with China ranking as its largest exporter and importer.

Details of some of the projects are as follows:

Cooperation project: Hengshun Zhongsheng Indonesia nickel-iron industrial park project

The project of Indonesia's Sulawesi Island Nickel-Iron Industrial Park, invested by Hengshun Zhongsheng, has a total investment of US $1.5 billion and an overall plan of 4000 hectares, including five functional areas: power plant, blast furnace nickel-iron smelting, electric furnace nickel-iron smelting, logistics warehousing and living and office work. Supporting the construction of 30 million tons of annual throughput wharf, roads and other public auxiliary facilities. The project plans to build a power plant with an annual power generation of 3.5 billion degrees, 12 RKEF production lines and 20 sets of small blast furnace projects, with an annual output capacity of 1.25 million tons of nickel and iron, with an output value of nearly 10 billion yuan. it is the second largest industrial park invested by Chinese enterprises in Indonesia.

Cooperation Project: Jinchuan Group invests in WP Project in Indonesia

On September 6, 2016, Jinchuan Group, a key project of China-Indonesia "Belt and Road Initiative" intergovernmental international capacity cooperation, successfully completed the equity delivery of Jinchuan Group's investment in Indonesia's WP project, which is of great significance to enhancing China's strategic resource guarantee capacity. The project consists of two laterite nickel mining companies with 79.48 million tons (wet) of laterite nickel resources. Under the agreement, Jinchuan Group invested US $57.13 million to acquire 60 per cent and 40 per cent of the two mines in the project and set up a joint venture.

Cooperation Project: China Railway Seventeenth Bureau Group cooperates with Indonesia Wanxiang Nickel Industry Co., Ltd.

Recently, the China Railway Seventeenth Bureau Group and Indonesia Wanxiang Nickel Industry Co., Ltd. signed a PC general contract for the Wanxiang Nickel-Iron Industrial Park in Sulawesi, Indonesia. Responsible for the civil engineering, equipment procurement, equipment installation, steel structure plant and all public auxiliary facilities related to the production line of the first and second phase of the park, including eight RKEF nickel-iron smelting production lines and blast furnaces. The park can introduce coking coal, power plants, cement plants and other nickel-iron smelting related industries into the park investment. Thus forming nickel, coal, smelting, electricity, stainless steel rolling, cement and other derivative products, logistics and other related upstream and downstream industries.

Aluminum Resources Cooperation:

With the saturation of the domestic market, overcapacity and other reasons and the construction and promotion of the country's "Belt and Road Initiative," more and more aluminum enterprises represent China's "going out." For example: China Hongqiao, Chinalco, China Zhongwang, Nanshan Aluminum, Jungle Group, Guangdong Fengaluminum, Huachang Aluminum, Shandong Yanzhou Mining, South-South Aluminum, Mingtai Aluminum, Sitong Group, Shengtong Group, Xiamen Shun Aluminum foil, Zhejiang Zhongjin, Evans, Matxin, Ruifuda, Shengda Qianliang, Guangya Aluminum, Luoyang Longding, Zhongshan Huayu, Sichuan Rand, etc. Have been deployed in overseas markets. "View details

Details of some of the projects are as follows:

Cooperative Project: 1 million ton Alumina Project in Bentanan Mountain Industrial Park, Indonesia

The 1 million-ton alumina project in Indonesia's Bentananshan Industrial Park, invested by Nanshan Aluminum, is located on Bintan Island, Indonesia's Liaonei Island. upon completion, it will use the rich bauxite and coal resources in the area to produce alumina. This is conducive to lower-cost alumina capacity expansion.

It is reported that Indonesia's bauxite reserves of about 1.9 billion tons, the current mainly in Bentan Island in Liao Province and West Kalimantan Province Tayan Town mining. Bauxite is a large amount of mineral resources in short supply in China, the contradiction between supply and demand is very prominent, the degree of dependence on foreign countries has been maintained at about 50% for a long time. After the completion of the project, BAI, the company's main investor in Indonesia, is expected to replace Australia as the main supplier of alumina in Southeast Asia and the Middle East.

Cooperative project: Weiqiao Kalimantan province annual production of 2 million tons of alumina project

China Hongqiao, an affiliated company of Weiqiao Entrepreneurship Group, produced 2 million tons of alumina annually in Kalimantan Province, Indonesia, under the joint testimony of President Xi Jinping and then Indonesian President Susilo, and the first phase of the project was 1 million tons. It was completed and put into production in May 2016.

Since 2015, China Minmetals has established long-term trade relations with Indonesia in tin ingots, ferronickel and alumina.

Cooperation Project: resumption Project of Alpat Alumina Plant of Jiuquan Iron and Steel Co., Ltd.

In July 2016, Jiuquan Alpat Alumina Plant of Jamaica was acquired by Dongxing Aluminum Company for US $299 million to establish the Alpat Alumina Plant of Jiuquan Iron and Steel Co., Ltd. In June 2017, the plant resumed production; in October, the plant began producing alumina products, reaching a daily output of 2000 tons in mid-November.

Of the three production lines at the Alpat alumina plant, only one has been restored and the other two are under repair and are expected to be produced at full capacity in the first quarter of 2018.

Jiugang's investment meets Jamaica's development requirements and government expectations, easing employment pressure. so far, the upgrading of the Alpat alumina plant has created more than 730 full-time jobs and more than 500 contract jobs. Enterprises adhere to localized management, in addition to senior management, all employ local or international staff, the proportion of employees in the teeth as high as 100%.

Zinc resources cooperation:

Cooperative project: reconstruction and expansion of zinc mine of Kazakh Shaerkiya Zinc Industry Co., Ltd.

The Bank of China of Kazakhstan has provided a US $120 million loan to the Kazakh zinc mine project, which is controlled by Kazakhstan's state sovereign fund and is located in Kazakstan's Kozle Olda. After the completion of the zinc mine reconstruction and expansion project, Schalkiah Zinc Industry Company will occupy a dominant position in the Harbin zinc mine market, and become the world's top zinc mining company.

Cobalt resources cooperation:

Cooperative project: cobalt hydroxide production capacity project

The production capacity of 3000 tons of cobalt hydroxide in Hanrui cobalt industry is expected to be completed and put into production around the end of 17. the company's cobalt hydroxide production capacity will reach 5000 tons, compared with the return of cobalt concentrate from the Congo (containing about 10 percent of cobalt). The company can save about 60% freight by shipping cobalt hydroxide back (cobalt content is more than 35%), and the cost is obviously reduced.

Integrated projects:

Cooperative project: Emma Mining put into production

Yinxin Mining Industry has preliminarily determined to increase the amount of ore by 200000 tons and the average grade of copper by 1.6 per cent. Emma Mining identified 3.2336 million tons of new lead-zinc ore and 240000 tons of lead + zinc metal (average grade 7.44 per cent). The technical reform of Yinxin Mine will achieve the goal of annual ore treatment capacity of 450000 tons. Emma Mining will upgrade its concentrator to increase its daily ore handling capacity by 300 tons, which is expected to increase by about 50 percent for the whole year over last year. The implementation of the heating project in the mine can extend the working time of the whole year by more than two months.

Other:

Georgia maintains close trade with China, Georgia's fourth-largest export market and third-largest importer. From January to November, Georgia's foreign trade increased by 12.9 percent over the same period last year, and copper ore and its concentrate remained Georgia's largest export product, with exports of US $379.1 million, accounting for 15.5 percent of the total exports. This was followed by iron ore (US $285 million); imports were mainly crude oil (US $617 million), copper (US $310 million) and natural gas (US $294 million).

With effect from January 1, 2018, Georgia will achieve zero tariffs on 96.5 percent of products imported from China.

(SMM) Yan Jun finishing of Shanghai Nonferrous Metals Network