Foreign investment in China s mining industry

Foreign investment in China's mining industry

Foreign investment in China's mining industry has experienced ups and downs since the adoption of the opening up policy in the late 1970s. In the early stages, only a few foreign investors came to invest in China's mining industry and they were there to test the water. The best known investment was a surface coal mine project funded by the US Occidental Petroleum Corporation. This was the largest investment project of the time, involving a total of US$344 million. In the period from 1989 to 1996, there was a surge of foreign participation in China's mining industry, the driving force of which was the deepening of China's economic reform and opening up policy.

Apart from investment in mining projects, foreign investors also entered into venture prospecting operations, a notable example of which was BHP's US$4.5 million prospecting venture to explore lead-zinc ores in China. However, foreign investment experienced a setback in the 1997-1998 period. The internal flaws in the investment environment of China's mining industry, together with the Asian financial crisis, the downturn of the world gold market and the impact of the Bre-X incident, had combined to cause the setback. A number of foreign mining companies left China, including Asia Minerals and Zen International. Since 1999, foreign investment has begun to pick up as improvements were made in the investment climate. In addition, China's growth potential in economic development and its imminent membership of the WTO have made many foreign mining companies revisit their China strategies and come to China to pursue new cooperative opportunities. Large international mining firms such as Billiton and Placer Dome have come to China, with the former investing in a lead-zinc mine project and the latter a gold mine project.

The following is a list of companies that have or have had a presence of some kind in China:

Anglo	King Bridge
Asia Minerals	Kores
AMR	Mevicar Minerals
Baja Gold	Minco
Barrick Gold	Minorco
Billiton	Naneco
Broadwater	New Mont Mining
Breckenridge	Pan Asia
Cameco	Pan-Pacific Peron
Carson Gold	Resources
China Gold	Placer Dome
Columbia Gold	Phelps Dodge
Cominco	Quantum
Cyprus Amax	Royal Oak
De Beers	RTZ
Donner Resources	Sino Mining
FMC Gold	Southwest Gold
Frontier Pacific	Spur Venture
Gen Corp	Teck
General Minerals	Technology
Global Pacific	Tri-a
Golden Pacific	Turnbul
Griffin Mining	West Mining
Inco	World Wide
International Skyline	XMP
Gold	Zen International
Iscon

Source: Ishiung J Wu, Liu Yikang, Mining climate improves in China , Mining Engineering, September 2001, 19 “24 'Mining Engineering' 2001.9 and China Gold Association