The China International Mining Conference 2011 attracted more than 4,800 people from government officials, experts and scholars, mining companies, and financial institution representatives from more than 50 countries, including 24 mining ministers from 19 countries and regions. As the global economy continues to be turbulent and the development of the mining industry is confusing, the number of participants at this mining conference, the number of senior officials participating in the conference, and the large exhibition area reflect the global attention to the mining industry and the expectations of China's economic development. It reflects that China is playing an increasingly important role in global mining development.
Development Research Center of China Geological Survey Zhou Ping, Tang Jinrong, Shi Junfa and Yang Zongxi recently completed the "2011 Global Mining Situation Analysis and Prospects——Talking from the 2011 China International Mining Conference", from the global mining situation judgment, mining and The three aspects of the capital market and the “going out” of mining companies reflect various perspectives at the 2011 China International Mining Conference and expounded the analysis of the global mining situation.
Instability of international mining is increasing, China's economic growth is the driving force for global mining development
Judging from the experts' speeches at the 2011 China International Mining Conference, there are two different views on the current global macroeconomic trends and the judgment of the mining situation. One is optimism. They believe that after the financial crisis, mining development has entered a normal development track. Infrastructure construction and urbanization in emerging countries and regions such as China, India, and Africa will continue to promote the rapid advancement of the global economy and mining industry; the other is the pessimists, who believe that the current economic crisis in developed countries has intensified and PMI has sharpened. Unfavorable factors such as deceleration and rising risk of credit default will gradually expose potential secondary dip risk and its impact on mining. The "Report" believes that these two perspectives are not completely contradictory. Optimists are mainly based on the medium and long-term economic trends, while pessimists consider more about the recent macroeconomic trends.
Some experts believe that the economic uncertainty in the short and medium term will increase, and the economic recession may drag down the development of the mining industry. Researcher Ding Yifan from the World Development Institute of the Development Research Center of the State Council pointed out that the total amount of resources traded on the international market far exceeds the resources required for economic development, and resource trading has become an important tool for financial investment (or speculation). Moreover, changes in resource prices often depend on fluctuations in the pricing currency exchange rates, and changes in the monetary policy of core countries can greatly change the direction of the market. Shao Yi, director of the Non-ferrous Metals East China Geological Exploration Bureau, believes that the current global economic recession will inevitably affect the global demand for mineral resources and drag down mineral exploration investment. Economic fluctuations will first be reflected in the fluctuations of commodity prices, and then they will affect the supply and demand relationship. If the prices of bulk mineral products continue to decline, it will undoubtedly affect investors' investment in mineral resources exploration, especially some primary exploration projects will encounter constraints such as financing bottlenecks.
At the conference, the participating experts' understanding and judgment that the global mining economy is still in the "third (super) cycle" was basically the same. After experiencing the "first cycle" brought about by American industrialization and the "second cycle" driven by European industrialization, the global mining economy is in a period of extraordinary demand for resources from the industrialization of emerging economies represented by China, although 2008 There was a brief pause in the financial crisis of the year. Experts believe that China and Africa will continue to promote world economic growth. Infrastructure construction, urbanization, looser fiscal and monetary policies, and large-scale investment plans will continue to promote China's rapid economic growth; while Africa, as a young and dynamic region with a rapidly growing population, its urbanization process and new technology Factors such as the desire and application, the huge potential of resources to be developed, and the increasingly mature financial industry will actively promote Africa's rise in world economic activities.
In addition, experts also believe that global mining investment will continue to rise and the raw material price index will run at a high level in the next ten years. Compared with bulk minerals, the prospects for high-tech minerals are more promising. Wang Jionghui, president assistant of China Minmetals Corporation, pointed out that with the rapid development of high-tech industries, the demand for new technology mineral raw materials will inevitably increase rapidly, which will be a period of opportunity for new technology mineral exploration, development and investment. As high-tech minerals are important for promoting the development of new energy and high-tech industries, they are of great strategic significance for enhancing the national high-tech competitiveness. If the new-technology mineral strategy is put in place, it will most likely bring about the optimization and upgrading of the industrial structure of new technologies and materials.
Combining the opinions of experts at the Mining Conference, the "Report" put forward a new understanding of the global mining situation: on the one hand, the European debt crisis is deeply fermenting, and the risk of the second bottom of the global economy continues to increase; on the other hand, huge amounts of liquidity and The strong demand from emerging countries has created a new round of mining bubbles; meanwhile, global economic growth has not been as good as expected, which has partially eased the expansion of the mining bubble. The "Report" pointed out that in the short to medium term, the progress of the European and American debt crisis and its solutions will affect the development of the global mining market, and the possibility of economic recession cannot be ruled out. At the same time, driven by the huge global liquidity, even if China ’s demand for mineral resources has slowed down, global bulk mineral product prices will still maintain high wave dynamics, and the amplitude of shocks will be more severe. In the medium and long term, the global economy may come out of haze after 2013 ~ 2014. After a series of structural optimization and adjustments in major economies such as the United States, Europe, and China, economic growth will be healthier and sustainable, and the prospects for the global mining industry are good. .
China's mining capital market has become the focus of domestic and foreign financial institutions
A highlight of this International Mining Conference is that the number of participating financial institutions has increased. The "Report" believes that this shows that China's mining capital market has become the focus of attention and competition among domestic and foreign financial institutions.
At present, mining investment and financing are better than other industries, especially in China. According to Cheng Yan, director of BOC International, from January to September 2011, in the domestic and international market capital financing, the financing scale of the mining industry accounted for a large proportion of the total industry financing scale. A good capital market has undoubtedly contributed greatly to the production, operation, expansion and acquisition of mining enterprises. The performance of China's mining investment and financing environment is even more prominent. Wang Min, deputy minister of the Ministry of Land and Resources, pointed out in a speech at the mining conference that in the first three quarters of this year, China's mining investment maintained a strong growth, with the investment volume increasing by 27.9% year-on-year, which was higher than the investment growth rate of fixed assets of 24.9%. In addition, according to the latest data from Zero2IPO database, in August 2011 in the Chinese venture capital and private equity investment (VC and PE) market, the energy and mining industry ranked first in the amount of investment.
Xiang Xiang, Chief Representative of the Toronto Stock Exchange, summarized the global mining equity financing situation in the past 5 years: from the perspective of the amount of financing, the world is "three major companies-the Toronto Stock Exchange, the London Stock Exchange and the Australian Stock Exchange" . Egizioy, vice president of capital markets under the Bank of Montreal Financial Group, said in analyzing global private equity and venture capital that North America and Europe are the world's largest mining capital financing markets, and it is difficult for emerging markets to change this pattern in the short term. Affected by the lagging development of the mining capital market in China, more domestic mining companies choose to conduct financing activities through overseas capital markets.
Experts also pointed out that China's mining capital market has a strong momentum of development and urgently needs guidance and regulation. Due to the lagging development of the domestic mining capital market, the existing mainboards, small and medium-sized boards and the Growth Enterprise Market have high thresholds and harsh conditions, making it difficult for mining companies to enter. According to the analysis by Jin Jianhua, the managing director of CITIC Securities Co., Ltd., as of the end of September, the total market value of China's mining-related sectors was about 4.84 trillion yuan, accounting for 18.28% of the total market value of A shares, which was the second largest sector in China's A stock market. This still cannot meet the capital needs of domestic mining companies to become larger and stronger, which has led many companies to "go out" and go abroad to raise funds.
However, in recent years, significant progress has been made in the construction of the domestic mining capital market: first, the state has set up a central geological prospecting fund, and provinces and cities have established provincial geological prospecting funds, filling the gap in domestic risk prospecting funds; second, advancing mining rights The construction of the market system has successively established mining rights exchanges. The third is the marriage of large domestic mining enterprises with financial institutions to establish various private equity funds.
The "Report" believes that under the current uncertain and unstable macroeconomic situation, the mining sector is significantly better than other industry sectors, a large amount of global financial capital flows to the mining market, and the hype of strong demand from emerging countries, It is bound to create a new round of mining bubbles, intensify the turbulence of the global mining market, and bring new hidden dangers to the sustainable development of the mining industry. Therefore, in response to the new international situation and the various domestic funds that are rapidly emerging, the relevant departments should make a top-level design in advance from the perspective of the country and the healthy development of the industry, formulate relevant regulatory policies and rules, and conduct corresponding simulations. Research to be prepared and prepared.
Chinese Mining Enterprises "Going Global" Face New Situations and Challenges
(1) Since the reform and opening up, especially since joining the WTO, China has become the world's "manufacturing factory", which has a strong demand for mineral resources, and has become the biggest driving force for China to implement its "going out" strategy for mineral resources. At the same time, from the perspective of financial security, China's foreign exchange reserves of more than US $ 3 trillion also need to reduce the financial risk of foreign exchange reserves through enterprises “going global”. The "Report" pointed out that from the perspective of the current mining conference, China's mining enterprises "going out" are facing new situations and challenges.
In the past five years, China's direct investment in Australia has grown by more than 50% annually. Intierra's presentation data at the conference showed that Chinese mining companies' overseas mining revenue reached US $ 38.986 billion, mainly from Australia, Kazakhstan and Russia, and the main types of minerals were coal, titanium, zinc and so on. At the same time, China's role in global mining M & A transactions has been exaggerated. Australia, Canada and developed European countries remain the main buyers in global M & A transactions. Chinese companies accounted for only 6% of global M & A deals in 2010, while North American companies accounted for 52% and Australian companies accounted for 16%. According to the data of Deloitte, China actually controls only 1% of the total global mining output outside its own territory, and there is still a considerable gap with mining powers such as Australia and Canada.
Experts point out that the prospects for Chinese mining companies to "go global" are bumpy, mainly as follows: the threshold for mining investment has gradually increased and resource protectionism has risen; a serious shortage of global mining technical talents threatens the construction of mining projects; Cultural and social differences, etc.
This mining conference held in-depth discussions on the "going out" strategy of Chinese enterprises, and different scholars, entrepreneurs and experts put forward suggestions from different angles.
The first is to do a good job of the top-level design of the national strategy and appropriately relax policy restrictions. Shao Yi, director of the Non-ferrous Metals East China Geological Survey, believes that the top-level design of the national "going out" strategy should be done, and resource allocation should be combined with foreign aid and industrial transfer. Chen Jinghe, chairman of Zijin Mining, suggested that companies be provided with free decision-making power and industrial support policies. While encouraging mineral enterprises to "go global", the government should dispel concerns and provide more free decision-making power and support policies. He also called for the use of a portion of foreign exchange to establish a "special overseas mineral resources fund" for overseas development of domestic mining companies. Withdraw some funds from foreign exchange reserves to support overseas mining exploration, mining, and acquisitions, and to support the overseas development of powerful enterprises.
Second, the enterprise should bear the corresponding social responsibility. In the process of "going global", enterprises must focus on the company's strategic goals. There are many mineral projects in foreign countries, but not all projects are suitable for enterprise development. Only those projects that meet the business development direction and strategic goals of enterprises are good projects. At the same time, Chinese enterprises should fulfill their social responsibilities in terms of safety and environmental protection, and become enterprises welcomed by the target countries.
Thirty-third is to connect with international mining standards and choose opportunities for overseas mergers and acquisitions. On the one hand, China ’s geological prospecting units to “go global” for mineral exploration need to abide by internationally unified economic and technological evaluation standards and engineering design standards. On the other hand, after overseas mergers and acquisitions, foreign assets need to be integrated. If the standards are inconsistent, it will also affect the communication between decision-making and management. This requires us to accelerate the development of international mining standards. At the same time, China's mining enterprises should make overall plans, not only to implement overseas risk surveys, but also to seize the rare "window" period and purchase or merge overseas high-quality mineral resources.
The fourth is to adopt flexible and diverse "going out" methods. In the current international context, state-owned enterprises have acquired foreign companies and obtained controlling shares. Western countries are generally wary. Through the combination of state-owned and private enterprises, private enterprises can come forward to carry out asset restructuring and equity conversion, which can effectively reduce risks. For full control, it is still a question of equity participation. Foreign-funded enterprises also have certain doubts about the holding of Chinese enterprises. Specific analysis should be made on specific issues. Absolute holding may not be a good thing. As long as China's resource rights and interests can be guaranteed, any method is worth exploring.