In the new historical period, as Chinaâ€™s economy enters a new normal, the country accelerates its efforts to overcapacity and promote supply-side structural reforms, especially the current weak economic recovery in the world, the lack of opportunities for mining fatigue, the sharp decline in social investment, and the fall in prices of mineral products. In the case of a downturn in the mineral exploration market, where will the mineral exploration work go?
In a certain sense, the intensity of demand for mineral resources in the country's economic and social development determines the layout and scale of mining development. Mineral exploration is the material basis and premise of mining development. The prospect of mineral exploration work depends on the status and ups and downs of mining development. Therefore, to study the situation and prospects of mineral exploration, we must study the mining situation.
Since the founding of New China, through the continuous efforts of the majority of geologists, by the end of 2015, 172 kinds of minerals have been discovered nationwide, including 12 kinds of energy minerals, 59 kinds of metal minerals, 95 kinds of non-metallic minerals, and 6 kinds of water and gas minerals. 162 minerals with identified resource reserves have been discovered.
Relying on these mineral resources, China has developed from a small mining country to a major mining country, becoming the world's largest producer, consumer and trading country of mineral products. By 2015, the number of non-oil and gas mining enterprises in China is 83,648. In 2015, the total amount of ore mined (raw ore) was 9.628 billion tons, and the total output value of mining was 1,173.562 billion yuan.
There are more than 400 mining towns in China due to mining, and the mining town has a population of about 300 million, which is an important part of China's urban system. At the same time, a relatively complete mining and raw material processing industrial system including energy, steel, nonferrous metals, chemicals, non-metals and building materials was built.
In the past ten years, despite the adjustment of industrial structure and other reasons, the number of non-oil and gas mining enterprises in the country has decreased from 7,692,200 in 2005 to 5,190,100 in 2015. However, if there are 2 million employees in the petroleum industry, 470,000 workers in the geological survey industry, and nearly 7,600 formal employees of the China Geological Survey, there are still nearly 7 million mining workers.
To date, mineral resources remain the material basis for economic and social development. Mining development provides 95% of energy, 80% of raw materials and more than 70% of agricultural production materials for China's national economic development and people's daily life.
However, once upon a time, Chinaâ€™s mining industry, which has been leaping forward, has begun to get into trouble and it is hard to see improvement. So, how should we judge the current mining situation? What is the cause of the sluggish mining situation?
Current global and China's mining situation
In recent years, the global demand for mineral products has continued to weaken. The downward trend of the global mining situation has not been fundamentally reversed. The oversupply situation in the mineral products market has become more prominent. The capital market has experienced difficulties. Mining investment has weakened and declined, resource prices have violently oscillated, and commodities And the prices of major mineral products showed a high downward trend.
China's mining situation is difficult to protect itself. In fact, in recent years, in addition to the decline in the price of most mineral products, the mining output value has declined, and the profit margin of mining development has shrunk severely. At the same time, in contrast to the â€œgolden decadeâ€ of the industry: in recent years, the enthusiasm of China's social capital investment in geological exploration has been significantly reduced, and mineral exploration investment has continued to decline.
According to the National Bureau of Statistics, the profit rate of China's mining industry dropped from 9.67% in 2014 to 3.68% in 2016, ranking the last in the industrial enterprises above designated size. Investment in fixed assets in the mining industry fell from 1,468.1 billion yuan in 2014 to 10,32 billion yuan in 2016, a decrease of 29.71%.
According to data provided by the Ministry of Land and Resources, the national geological exploration investment dropped from 114.5 billion yuan in 2014 to 78 billion yuan in 2016, a decrease of 31.8%. In 2013, the investment in mineral exploration decreased by 12.14% compared with 2012, and decreased by 17.81% in 2014, and decreased by 19.66% in 2015, and decreased by 29.08% in 2016, which is basically equivalent to the survey investment in 2007.
From the data of the first half of this year, the overall situation has not yet shown a clear trend of improvement.
Reasons for the downside of the mining situation
There are many reasons for the decline of the global mining situation. The opinions of the experts are not consistent, but it comes down to the following aspects:
(1) The inherent relationship between economic development and mineral consumption
The economics world has summed up two rules based on statistical data.
First, energy consumption and the national economic development show a linear growth relationship.
That is to say, with the economic development, energy consumption will continue to rise. Whether in developing or developed countries, whether it is total energy consumption or per capita consumption, this relationship is quite clear. The zero growth that people are expecting has not yet appeared. Of course, due to the different consumption concepts and the differences in industrial structure and product structure, the consumption of energy per capita varies greatly in different countries in the same stage of development. However, after the completion of industrialization, the decline in energy consumption rate is a basic law.
Second, unlike the law of energy consumption, Western scholars have proposed an S-shaped curve relationship based on the development experience of western developed countries, especially the relationship between consumption of solid mineral resources and economic development, namely the â€œS-shaped modelâ€.
The "S" pattern of per capita metal consumption in the process of industrialization
The model believes that there is a strong correlation between per capita gross domestic product (GDP) and per capita mineral resources, especially per capita metal consumption. Namely: with the economic development, the consumption of mineral resources showed a rapid growth trend. In the middle stage of industrialization, the consumption of mineral resources reached a peak, and then gradually began to decline. When industrialization is basically completed, the economic structure will undergo major changes, and the consumption of mineral resources will drop to a very low level. The "S" shape theory holds that with the economic development, the consumption of mineral resources shows a slow growth, rapid growth, and deceleration to zero or negative growth.
The take-off points, turning points and zero growth points of different countries and the same kind of mineral resources consumption correspond to relatively fixed per capita GDP positions. Based on these three key points, the curve can be divided into a slow growth zone for mineral resources consumption, a fast growth zone, a growth slowdown zone, and a zero growth or negative growth zone. At present, developed countries are concentrated in areas with zero or negative growth in resource consumption; emerging economies such as China are in areas with slower resource growth, India and ASEAN are in areas with rapid growth in resource consumption, and many developing countries are still in a slow growth zone of pre-industrialization.
The â€œSâ€ shape law of mineral resource consumption reveals the evolution trend of energy and mineral resources consumption from agricultural society to industrial society to post-industrial society. The experience of developed countries shows that the economic growth is likely to show the trajectory of "agriculture - light industry - energy raw material industry - high processing industry - service industry". In the early stage of industrialization, the proportion of light industry such as textiles and foodstuffs was relatively high, and the proportion continued to decline. In the middle stage of industrialization, the proportion of energy raw materials such as steel, cement and electric power was large, and then began to decline. In the later stage of industrialization, the proportion of manufacturing with high processing capacity such as equipment manufacturing Significantly rising.
According to other data, per capita steel and cement consumption in the pre-industrialized countries such as the United States, Britain, Germany and France peaked at a per capita GDP of about 10,000 US dollars. The newly industrialized countries and regions such as Korea, Japan and Taiwan have a per capita GDP of about 14,000 US dollars. It peaked at ~15,000 USD. From the experience of the pre-industrialized countries such as the United States, Britain, Germany, France, etc., due to the different roles of metals such as copper and aluminum in infrastructure construction, the peak time of consumption is not the same: copper is about $20,000 per capita GDP. The left and right began to decline, and aluminum began to decline at a level of about $28,000 per capita GDP.
Master these two laws, that is, the linear relationship between the stage of economic development and energy consumption, the S-law of mineral consumption such as metals, and the path that advanced industrialized countries have gone through, for us to rationally treat the return of the current mining market and judge the future energy consumption of China. Demand and the consumption needs of other mineral resources are of great significance. In fact, as the world's second largest economy, the largest energy consumer and the country's largest consumer of nearly 20 minerals, China's economic development has a major impact on the global economy and mining trends.
After more than a decade of rapid development of the Chinese economy, per capita GDP has approached 12,000 US dollars. With the continuous improvement of urbanization level and the continuous improvement of infrastructure and social wealth accumulation, China has entered the middle and late stages of industrialization. According to the "S" shape law, China's mineral resources consumption will enter the growth rate slowdown zone as a whole.
(2) Mineral consumption and mining development have periodicity
In the 20th century, the developed countries involved 900 million people to concentrate on industrialization and post-war reconstruction, and the growth of global mineral resources consumption experienced the first cycle (1945-2000). At present, the demand for mineral resources in the second cycle is still in a slow rising phase, and it is expected to enter a gradual period around 2020. The duration of this cycle depends on the speed of economic development in emerging economies, the sustainability of industrialization, and the rapid growth in demand for minerals, but it is expected to end in 2030. Later, as countries and regions such as India and ASEAN enter the rapid industrialization process, global mineral resource demand will enter the third cycle of rapid growth.
(3) Changes in the development stage have caused a sharp decline in mineral demand
Professor Xu Mingchen of China University of Geosciences (Beijing) has divided the countries into resource shortage, ideal and resource rich according to the different mineral resources endowments. Through empirical analysis of the United States, Canada, Japan and other countries, it is found that the development of mining industry in the United States, Canada, Japan and other countries is affected by many factors such as resource endowment, industrial development, mineral products trade, environmental protection, and global economic cycle. Different cycle characteristics are produced, and the demand for mineral resources varies greatly in different mining development cycles.
Professor Xu Mingchen also found that with the changes in the economic development stages of different economies in the world, the focus of mineral resources demand will shift: the demand for mineral resources in developed countries will continue to decrease; the demand growth rate in industrialized countries such as China will slow down. But if the BRICS, ASEAN, and especially India, emerging economies can take the lead in getting rid of the current economic downturn, economic growth is rapid, and the rigid demand for mineral resources is released, then the focus of mineral resource demand may be developed. The country has moved to developing countries and is likely to drive the global mining industry into a new round of growth.
(4) The global economic downturn is the direct cause of the sluggish mining situation
Since the subprime mortgage crisis in the United States in 2007, especially the Greek debt crisis in the second half of 2011, the deep-seated contradictions of the global financial crisis have not been effectively resolved after the spread of the European sovereign debt crisis. This has made the global economic situation exhausted. And the recovery is weak. On the other hand, developed countries and regions represented by the United States and Europe are launching â€œre-industrializationâ€, with new energy, environmental protection and high added value as the manufacturing industry, in pursuit of improving energy efficiency, low-carbon economy and adjusting industrial structure. The development of oriented high-tech industries also tends to reduce the demand for primary mineral resources.
At the same time, with the effective promotion of the US â€œenergy independenceâ€ strategy, especially due to the spillover effect of the â€œshale gas revolutionâ€, the US self-sufficiency rate of energy resources has increased significantly. At the same time, Canada's oil sands mines, the Gulf of Mexico and Brazil's deep sea oil and gas resources have great potential, which makes the global resource energy demand and per capita consumption show a trend of decline.
Another important reason is that the Chinese economy, known as the â€œglobal economic engineâ€, has entered the downtrend channel since 2012 and immediately entered the â€œnew normalâ€ characterized by â€œspeed change, structural optimization, power conversionâ€. The evolution of development to a more advanced form, a division of labor, and a more rational structure has changed the extensive development path in which the Chinese economy relied on a large amount of resource consumption in the past, which objectively caused a reduction in the demand for mineral resources.
According to the above analysis, the current global mining industry is showing signs of fatigue, directly because: the deep-seated contradictions that caused the global financial crisis in 2008 have not been effectively resolved, making the global economic development uncertain and the economic recovery slow; plus the US energy independence, The economic growth of emerging economies has slowed down, and Chinaâ€™s strong demand for mineral resources in the middle and late stages of industrialization has weakened.
However, this kind of fatigue still has no back-off relationship, "S" shape law, mining cycle theory, that is, it still belongs to the "cyclical and regional adjustment" of the mining economy. With the global economic recovery, especially the release of rigid demand for mineral resources by emerging economies such as ASEAN and India, it is still expected to reverse the global mining downturn and re-enter the uptrend channel, but the growth rate may not be able to catch up with the â€œgoldâ€ ten years". But on the whole, if there is no big disruptive change in the world, such as the world war, with the completion of industrialization in most countries, the world's rigid demand for mineral resources will definitely decline.
As far as mineral exploration is concerned, there are some specific reasons for the current market contraction. According to the analysis of experts, due to the poor endowment of mineral resources in China, the exploration and development cost of mineral products is high. Under the current low price of international mineral products, the domestic mineral products market has low competitiveness, which makes investors look at the development prospects of mining industry, which will inevitably restrict mineral exploration. Work is carried out. At the same time, China's economic and social development to today, pay more attention to the construction of ecological civilization, implement the concept of green development, and delineate the red line of ecological protection. Traditional mineral exploration and development methods are bound to be seriously challenged.
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