Guangdong to Build Rare Earth Deep Processing Industry Chain

Guangdong Provincial Government issued opinions to promote geology and mining economy. The province vows to foster 3-5 mining giants in three years.

Recently, the General Office of Guangdong Provincial Government issued the Opinions on Promoting Geology and Mining Economy(hereinafter referred to as the “Opinions”). According to a chief with the Planning and Development Department of Guangdong Provincial Geological Bureau, these were the first opinions on geology and mining economy put forward by a provincial government in the form of document in China, which will play an important role in promoting the transformation and upgrade of geological prospecting in Guangdong and facilitating the scientific development of geological and mineral resources and comprehensive development and utilization in the region.

As a major province of mineral resources in China, Guangdong has been attracting great attention in geological prospecting. Yesterday,I read the document on the provincial government’s website. Not only does it explicitly stipulate future development goals, the document also puts forward many specific ideas and opinions on how to press ahead with geological prospecting, develop the mineral resources industry, build an industry chain for mineral resources development, and step up the exploration, development and management of mineral resources. Industry insiders say the document“provides overall planning, accurate positioning, strong measures and highlights, which will have profound impact on the industry.”

Overall goals set up in the document are as follows: by 2015, a number of new mineral producing areas will have been discovered, a number of mineral resources exploration and development bases established, and 3-5 leading mining enterprises fostered; by 2020, four mining and deep processing industry chains for rare earth ore, kaolin ore, non-ferrous metal ore,gold, silver, and pyrite will have been built,strength in mineral resources exploration and development significantly enhanced, major breakthroughs in key technologies made, strategic emerging industries related to mineral resources fostered, and mineral exploration and development management will have been remarkably improved.

The Opinions points out that it is necessary to encourage and support the scale and standardization of large and medium-sized mining companies, regulate and guide the intensive development of small mining enterprises, and foster leading mining enterprises. It also needs to support resource enterprises including provincial large SOEs, city/county SOEs, and enterprises and mines of other ownerships to establish group mining companies. When a large enterprise teams up with a geological exploration unit with Grade A geological reconnaissance qualifications in exploration, they take precedence in acquiring exploration rights under the same conditions. Cooperation between enterprises dedicated to mineral exploration and development, dressing, smelting and processing, and warehousing and logistics should be promoted actively in order to build mineral resources industry clusters.

It is also pointed out that it is necessary to carry out the Agreement on Strengthening Cooperation in Geological Work in Guangdong Province signed by Guangdong Provincial Government and the Ministry of Land and Resources in 2010, to further improve ministry-province cooperation mechanism, to step up basic, nonprofit geological work, to conduct good coordination with the strategic actions to make breakthroughs in geological prospecting, to form interaction mechanism between the two,to deploy major projects of geological prospecting in a coordinated manner and to encourage local SOEs to take part in mineral exploration and development. Geological exploration units to integrate prospecting and mining should be encouraged. We should establish sound “linkage between central, local governments and enterprises and linkage between non-profit geological work and commercial mineral exploration in order to establish a new mechanism of geological exploration to closely combine geological exploration and mineral development, coordinate geological prospecting and mining rights management, and reform of geological survey team”. We should also formulate special measures for specified minerals to ensure the legitimate rights and interests of commercial prospectors of specified minerals.

Meanwhile, we should follow principles conducive to the scientific development of mining economy, transfer exploration rights in a reasonable manner, improve the methods of dividing the price of exploration rights and transfer proceeds from the mining rights of proven mineral-producing areas financed by treasury. After the portion to be turned in to central treasury is deducted, the remaining portion is divided pro rata among provincial, municipal,county and state-owned geological exploration units. Specific methods are to be worked out by the provincial department of finance together with provincial units concerned.