China's mining industry has entered a period of deep adjustment

Premier Li Keqiang said in a letter to the China International Mining Congress that mining development is the "first official" of economic development and the "promoter" of the mining boom. At present, the world economic recovery is difficult and tortuous, industrial restructuring and new technology revolution is evolving,
China's mining development is facing challenges, but also
.
1, China's mining development status quo
At present, the world economic situation continues to be deeply transformed and adjusted, the global mining situation is depressed, against this background, China as the world's second largest economy and mining power, naturally can not be alone. With the new normal of China's economy, GDP growth has further slowed down, and mining, as the basic industry supporting the national economy, has also entered a period of deep adjustment. According to the data of relevant departments,
China's mining industry is currently facing a decline in demand, investment, profit decline, financing difficulties and many other conditions, the overall
shows a trend of continued decline.
(1) The growth rate of demand for mineral products slowed significantly, the scale of production generally fell
the current economic growth shift and industrial restructuring pain intertwined, traditional industries to resolve the previous excess capacity led to poor demand, while the real estate market adjustment, industrial enterprises destocking and other factors, coal, iron and other bulk mineral products basically reached the peak of consumption, mineral consumption demand growth slowed significantly, production scale fell back to varying degrees. From January to May 2016, coal, crude steel, iron and raw aluminum production decreased by 8.4%, 1.4%, 2.8% and 1.7%, respectively, year-on-year.
quarter, production of major non-metallic minerals decreased or remained basically flat, with graphite, fluorite and magnesium materials down 16.67 percent, 7.6 percent and 5.9 percent year-on-year, respectively, while kaolin production was basically the same as in the same period in 2015.
2015, China's foreign trade activity of mineral products decreased, with total imports and exports amounting to US$833.8 billion, a decrease of 23.6% compared to 2014, of which imports decreased by 30.8% and exports decreased by 11.2%.
Changes in China's mineral import and export trade volume from 2011 to 2015
(2) The growth rate of
mining investment decreased year by year

In recent years, the growth rate of foreign direct investment and fixed asset investment in China's mining industry has also basically shown a downward trend year by year. In the area of fixed asset investment, for example, according to the National Bureau of Statistics, the mining sector's share of total fixed asset investment has been decreasing since 2008, and the growth rate has declined significantly. From January to May 2016, China's mining investment in fixed assets was 305.4 billion yuan, down 16.4% YoY, and the decline continued to expand by 1.1 percentage points from the January-April average. In terms of private fixed asset investment, investment in the mining industry was 180.9 billion yuan in January-May 2015, down 11.1% YoY, an increase of 4 percentage points.
2006-2015 China's mining industry fixed asset investment trend chart
(3) Mining and raw materials industry profits fell sharply
According to the National Bureau of Statistics, since 2012, mining profits have been declining year by year, and the decline has been increasing year by year, from -17.34% in 2013 to -23% in 2014 and 260.4 billion yuan in 2015, down 58.2% from the previous year. From January to May 2016, the mining industry achieved a total profit of 6.66 billion yuan, down 93.8% YoY.
(4) the financial indicators of mining companies deteriorated, financing difficulties
mining is a capital-intensive industry, need a lot of capital support to grow and develop. As the price of bulk minerals continues to fall or operate at low levels, the financial indicators of mining companies continue to deteriorate, resulting in a sharp decline in operating results leading to the basic loss of corporate financing capacity. Although IPOs resumed at the start of the year, mining companies' share prices fell sharply, with a significant portion of the coal, steel and other sectors losing more than 50 per cent.
for most small and medium-sized enterprises, the financing structure is not perfect, the channel of direct financing is limited, indirect financing is difficult to obtain, and further development is restricted.
2, thinking and suggestion
The development goal of mining should not only meet the demand for mineral resources, but also adapt to the carrying capacity of ecology and environment, so as to achieve sustainable development. Under the background of the new economic normal, the traditional mining development mode can not adapt to the current economic situation, the future mining industry must change the development concept and construct a new business model, in order to adapt to the new economic normal and achieve sustainable development.
(1) To comprehensively resolve excess capacity and promote the reform of the mining supply side
Relevant departments should focus on guiding industrial transformation and upgrading and physical efficiency, reducing the cost of production, reduce the loss of enterprise exit.
(2) To solve mining problems and promote sustainable development of mining by scientific and technological innovation
increase scientific and technological innovation in mining, focus on improving scientific and technological innovation investment in mineral resources exploration, mining technology and equipment, comprehensive recycling of resources, increase the construction of innovative platforms and innovative personnel training, and strive to improve the efficiency of mineral resources exploration and development and resource utilization. Make full use of the development and application of big data technologies such as "Internet Plus" and cloud computing, gradually transition from technological innovation to institutional innovation, cultivate new dynamics of mining development with new production management and marketing models, crack development problems, and promote sustainable development of mining industry.
(3) Make full use of the international market, plan the global layout of mining
seize the global mining downturn this opportunity period, make full use of the China International Mining Conference and other platforms, around the world's important mineral resources suppliers, encourage China's mining enterprises to "go out", plan the global layout of China's mining industry, to ensure the security of China's economic development of resources supply. At the same time, promote production capacity cooperation and industrial transfer with countries and regions along the Belt and Road to achieve mutual benefit and win-win results.
(4) Speed up the construction of financing platform, crack the mining development financing problem
learn from the successful experience of mining capital markets in Canada, Australia, the United States and other countries in risk control, reserve supervision, information disclosure, intermediary services, etc., build a multi-level mining financing system, crack the financing problems in the development of mining enterprises, while effectively reducing the investment risk of exploration and development, enhance corporate governance capacity, so as to promote the stable development of mining.
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