Gold mining in China
Encyclopedia
Gold mining in the People's Republic of China has recently made that country the world's largest gold
producer. For the year 2007, gold output rose 12% from 2006 to 276 tonnes (or 9.7 million ounces) to become the world's largest for the first time -- overtaking South Africa
, which produced 272 tonnes. South Africa had until then been the largest for 101 years straight since 1905. The major reasons for this change in position had been due to South African production falling by 50% in the past decade as production costs there have risen, more stringent safety regulations have been implemented, and existing mines have become depleted.
On the other hand, gold output in China has risen by 70% for the past decade. In recent years, China's gold mining industry has received increased foreign and domestic investment, and project numbers have increased as more discoveries have been found. China produced nearly 300 tonnes of gold in 2008. It is also the only country in the top three where production rose in 2008.
Important organizations include China Gold Association (中国黄金协会)http://www.cngold.org.cn/ and China International Mining Group (中国国际矿业集团)http://www.cimg.org.cn/.
.
In recent years, domestic gold production has risen by 15% annually compared to the 3% decline in global production in 2006. This tremendous increase has been due to rapid capital
expansion and low costs of labor. Chinese gold producers have gained enormously from current record high gold prices.
and restructuring and consolidation. Most of these firms' technological standards and management are weak and inefficient.
The country's oldest and largest gold producer is the China National Gold Group Corporation
(CNGGC), which accounts for 20% of total gold production in China and controls more than 30% of domestic reserves. CNGGC also controls Zhongji Gold, the first publicly listed gold mining company in China.
, Henan
, Fujian
and Liaoning
. Recently, western provinces such as Guizhou
and Yunnan
have seen a sharp increase, but from a relatively small base.
. Though foreign investment still constitutes a very important part gold mining expansion, since 1995 it has no longer been actively encouraged by the Chinese government.
Vancouver-based Jinshan Gold Mines Inc. started production in July at its Chang Shan Hao gold mine in China's northern province of Inner Mongolia
, reaching 19,000 ounces of gold by December 18. The mine is designed to produce about 120,000 ounces of gold per year, making it one of the country's largest producers.
Multi Billion dollar Indian Liberty Group owns two mines in China, and is scheduled to start mining in 2012
Gold Fields
and Australia's Sino Gold Mining Ltd., have set up a joint venture focused on discovering large gold deposits in China with the potential to produce about 500,000 ounces a year. Sino Gold
has been buying stakes in Chinese gold deposits and explorers. In May it started production at its Jinfeng mine in southern China, with planned gold production of 180,000 ounces per year.http://news.xinhuanet.com/english/2008-11/09/content_10331386.htm
rose 18%, helped by demand from China's increasingly wealthy middle and upper classes. With a rapid rise in domestic demand, China is now the world's fourth largest gold-consuming country. Chinese market demand accounts for 9.2% of worldwide gold consumption.
in response to domestic demand for gold, as well as allowing its producers to hedge risks from daily gold price fluctuations.http://www.forbes.com/markets/2008/01/10/china-gold-futures-cx_jc_0110markets1.html
Gold
Gold is a chemical element with the symbol Au and an atomic number of 79. Gold is a dense, soft, shiny, malleable and ductile metal. Pure gold has a bright yellow color and luster traditionally considered attractive, which it maintains without oxidizing in air or water. Chemically, gold is a...
producer. For the year 2007, gold output rose 12% from 2006 to 276 tonnes (or 9.7 million ounces) to become the world's largest for the first time -- overtaking South Africa
Mining in South Africa
Mining in South Africa has been the main driving force behind the history and development of Africa's most advanced and richest economy. Large scale and profitable mining started with the discovery of a diamond on the banks of the Orange River in 1867 by Erasmus Jacobs and the subsequent...
, which produced 272 tonnes. South Africa had until then been the largest for 101 years straight since 1905. The major reasons for this change in position had been due to South African production falling by 50% in the past decade as production costs there have risen, more stringent safety regulations have been implemented, and existing mines have become depleted.
On the other hand, gold output in China has risen by 70% for the past decade. In recent years, China's gold mining industry has received increased foreign and domestic investment, and project numbers have increased as more discoveries have been found. China produced nearly 300 tonnes of gold in 2008. It is also the only country in the top three where production rose in 2008.
Important organizations include China Gold Association (中国黄金协会)http://www.cngold.org.cn/ and China International Mining Group (中国国际矿业集团)http://www.cimg.org.cn/.
History
Gold mining in China dates back to the Song DynastySong Dynasty
The Song Dynasty was a ruling dynasty in China between 960 and 1279; it succeeded the Five Dynasties and Ten Kingdoms Period, and was followed by the Yuan Dynasty. It was the first government in world history to issue banknotes or paper money, and the first Chinese government to establish a...
.
In recent years, domestic gold production has risen by 15% annually compared to the 3% decline in global production in 2006. This tremendous increase has been due to rapid capital
Capital (economics)
In economics, capital, capital goods, or real capital refers to already-produced durable goods used in production of goods or services. The capital goods are not significantly consumed, though they may depreciate in the production process...
expansion and low costs of labor. Chinese gold producers have gained enormously from current record high gold prices.
Scale
Domestic producers still suffer from a lack of scale. In 2000, there were about 2,000 gold producers - most of them relatively small and unsophisticated by international standards. Few are able to operate on a global platform, though the number of producers had shrunk to about 800 in 2007 after mergers and acquisitionsMergers and acquisitions
Mergers and acquisitions refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling, dividing and combining of different companies and similar entities that can help an enterprise grow rapidly in its sector or location of origin, or a new field or...
and restructuring and consolidation. Most of these firms' technological standards and management are weak and inefficient.
The country's oldest and largest gold producer is the China National Gold Group Corporation
China National Gold Group Corporation
China National Gold Group Corporation is China's largest gold producer, state-controlled China Gold mines and refines gold, silver, and copper, producing custom-designed gold and silver bars as well as gold powder and grains, and raw copper...
(CNGGC), which accounts for 20% of total gold production in China and controls more than 30% of domestic reserves. CNGGC also controls Zhongji Gold, the first publicly listed gold mining company in China.
Production and reserves
China's gold reserves are relatively small (about 7% of the world total). Production has usually been concentrated in the eastern provinces of ShandongShandong
' is a Province located on the eastern coast of the People's Republic of China. Shandong has played a major role in Chinese history from the beginning of Chinese civilization along the lower reaches of the Yellow River and served as a pivotal cultural and religious site for Taoism, Chinese...
, Henan
Henan
Henan , is a province of the People's Republic of China, located in the central part of the country. Its one-character abbreviation is "豫" , named after Yuzhou , a Han Dynasty state that included parts of Henan...
, Fujian
Fujian
' , formerly romanised as Fukien or Huguing or Foukien, is a province on the southeast coast of mainland China. Fujian is bordered by Zhejiang to the north, Jiangxi to the west, and Guangdong to the south. Taiwan lies to the east, across the Taiwan Strait...
and Liaoning
Liaoning
' is a province of the People's Republic of China, located in the northeast of the country. Its one-character abbreviation is "辽" , a name taken from the Liao River that flows through the province. "Níng" means "peace"...
. Recently, western provinces such as Guizhou
Guizhou
' is a province of the People's Republic of China located in the southwestern part of the country. Its provincial capital city is Guiyang.- History :...
and Yunnan
Yunnan
Yunnan is a province of the People's Republic of China, located in the far southwest of the country spanning approximately and with a population of 45.7 million . The capital of the province is Kunming. The province borders Burma, Laos, and Vietnam.Yunnan is situated in a mountainous area, with...
have seen a sharp increase, but from a relatively small base.
Foreign investment
Top foreign investment has come from Canada and AustraliaMining in Australia
Mining in Australia is a significant primary industry and contributor to the Australian economy. Historically, mining booms have also encouraged immigration to Australia. Many different ores and minerals are mined throughout the country.-History:...
. Though foreign investment still constitutes a very important part gold mining expansion, since 1995 it has no longer been actively encouraged by the Chinese government.
Vancouver-based Jinshan Gold Mines Inc. started production in July at its Chang Shan Hao gold mine in China's northern province of Inner Mongolia
Inner Mongolia
Inner Mongolia is an autonomous region of the People's Republic of China, located in the northern region of the country. Inner Mongolia shares an international border with the countries of Mongolia and the Russian Federation...
, reaching 19,000 ounces of gold by December 18. The mine is designed to produce about 120,000 ounces of gold per year, making it one of the country's largest producers.
Multi Billion dollar Indian Liberty Group owns two mines in China, and is scheduled to start mining in 2012
Gold Fields
Gold Fields
Gold Fields Limited is a South African gold mining firm, one of the world’s largest, which is listed on both the Johannesburg Stock Exchange and the New York Stock Exchange ....
and Australia's Sino Gold Mining Ltd., have set up a joint venture focused on discovering large gold deposits in China with the potential to produce about 500,000 ounces a year. Sino Gold
Sino Gold
Sino Gold Mining Limited or Sino Gold was a gold mining company headquartered in Sydney and conducting most of their mining operations in Jilin, Heilongjiang, Guizhou, and Shaanxi provinces in the People's Republic of China...
has been buying stakes in Chinese gold deposits and explorers. In May it started production at its Jinfeng mine in southern China, with planned gold production of 180,000 ounces per year.http://news.xinhuanet.com/english/2008-11/09/content_10331386.htm
Demand and consumption
Most of China's gold output stays in the country where it is transformed into jewelry and manufactured items, though the country's export role is increasing. In 2007, fabricationFabrication (metal)
Fabrication as an industrial term refers to building metal structures by cutting, bending, and assembling. The cutting part of fabrication is via sawing, shearing, or chiseling ; torching with handheld torches ; and via CNC cutters...
rose 18%, helped by demand from China's increasingly wealthy middle and upper classes. With a rapid rise in domestic demand, China is now the world's fourth largest gold-consuming country. Chinese market demand accounts for 9.2% of worldwide gold consumption.
Futures market
In January 2008, China opened its first gold futures market in ShanghaiShanghai
Shanghai is the largest city by population in China and the largest city proper in the world. It is one of the four province-level municipalities in the People's Republic of China, with a total population of over 23 million as of 2010...
in response to domestic demand for gold, as well as allowing its producers to hedge risks from daily gold price fluctuations.http://www.forbes.com/markets/2008/01/10/china-gold-futures-cx_jc_0110markets1.html
See also
- World Gold CouncilWorld Gold CouncilThe World Gold Council is a non-profit association of the world's leading gold mining companies, established in 1987 to promote the use of gold. It aims to stimulate demand for gold from industry, consumers, and investors. The Council's Chief Executive Officer is Aram Shishmanian, former head of...
- Gold extractionGold extractionGold extraction or recovery from its ores may require a combination of comminution, mineral processing, hydrometallurgical, and pyrometallurgical processes to be performed on the ore....
- Gold as an investmentGold as an investmentOf all the precious metals, gold is the most popular as an investment. Investors generally buy gold as a hedge or harbor against economic, political, or social fiat currency crises...
- Xie XuejingXie XuejingXie Xuejing or Xie Xuejin, Xie Xue-jing , is a Chinese geochemist who won the AAG Gold Medal in 2007. Xie is considered as the Father of Geochemical Mapping in China.-Biography:...
- Gold mining in the United StatesGold mining in the United StatesGold mining in the United States has taken place continually since the discovery of gold at the Reed farm in North Carolina in 1799. The first documented occurrence of gold was in Virginia in 1782...
- China Non-Ferrous Metal MiningChina Non-Ferrous Metal MiningChina Nonferrous Metal Mining Co., Ltd is a Chinese corporation involved with the mining of non-ferrous mineral resources.-History:It was founded in 1983 and it is managed by the State-owned Assets Supervision and Administration Commission of the State Council...
External links
- Beijing Gold Economy Development Research Center
- Gold Mining In China: Taming The Wild West A report from U.S. Embassy China May 1996