Big data sheds light on the development outlook for the mining industry in 2019.
Release time:
2019-04-23
The Ministry of Natural Resources delivered a special report titled “Mining Trends and Development Outlook for 2019.” According to the report, the Ministry has already issued guidelines for implementing big data initiatives and is currently considering a big data plan for mineral resources. By leveraging internet platforms, the ministry aims to build data infrastructure for the mining industry—creating a “Internet Plus Mining” ecosystem—to better support China’s mining sector and economic development.
The Ministry of Natural Resources delivered a special report titled “Mining Trends and Development Outlook for 2019.”
According to reports, the Ministry of Natural Resources has already issued guidelines for implementing big data initiatives and is currently considering a big data plan for mineral resources. By leveraging internet platforms, the ministry aims to build a comprehensive data ecosystem for the mining industry—creating an “Internet Plus Mining” framework—to better support China’s mining sector and economic development.
The mining industry is undergoing a new revolution, with technologies such as big data, artificial intelligence, and the Internet of Things becoming increasingly integrated with mining operations.
The report begins by analyzing the current status of mining development both internationally and domestically, and uses extensive data and real-world examples to demonstrate the challenges and problems facing the mining industry, as well as its new opportunities and promising prospects for future development.
The report indicates that in 2018, the economy continued its recovery, yet instability remained prominent. The mining index generally maintained the growth trend observed since 2016. Over the past two years, investment in mineral exploration has continued to rise, and in 2019, such investment is expected to keep increasing. After several consecutive years of decline, investment in mining development projects has gradually begun to rebound, with large-scale mining development projects now being launched.
In 2018, the number of strategic mergers and acquisitions rose, with deal volumes reaching US$3.4 trillion. However, influenced by national interests, merger and acquisition risks also persisted. Since 2018, although average prices of bulk metals have risen, the overall trend over the past year has been markedly downward, with significant price declines in key mineral products. As a result, mining companies experienced a particularly sharp slowdown in revenue growth during the first half of 2018.
The report indicates that in 2018, China’s cumulative raw coal production reached 3.55 billion tons, up 5.2% year-on-year; domestic gold production totaled 401.12 tons, maintaining its position as the world’s top producer for the 12th consecutive year. Production of ten nonferrous metals amounted to 56.88 million tons, representing a 6% increase over the previous year. At enterprises above designated size nationwide, crude steel production reached 857 million tons, up 6.7% year-on-year; steel production totaled 1.013 billion tons, an 8.3% increase over the previous year; and pig iron production stood at 708 million tons, up 2.4% year-on-year. However, cumulative production of domestically mined iron ore concentrate fell by 3.3% to 695 million tons. Imports of iron ore totaled 977.89 million tons, down 1.3% year-on-year. In 2018, nationwide fixed-asset investment (excluding rural households) reached 60.9 trillion yuan, up 5.9% from 2017. After four consecutive years of decline, fixed-asset investment in the mining sector turned upward for the first time, increasing by 8.6% compared to 2017; private fixed-asset investment in the mining industry also saw rapid growth.
China currently has 35 types of high-tech minerals. Among these, 18 are strategically advantageous high-tech minerals, 15 are strategically scarce high-tech minerals, and there are two non-metallic high-tech minerals: graphite and fluorite.
It is particularly worth noting that sand and gravel aggregates, as a new strategic mineral resource, are becoming increasingly important. In 2018, due to an imbalance between supply and demand, sand and gravel prices soared across many regions in China. As natural sand resources become ever scarcer, the trend in the industry will be for riverbed mining to be brought under state ownership. At the same time, green and environmentally friendly practices will also shape the future direction of the sand and gravel industry. With the entry of large capital groups, the barriers to entry for sand and gravel mining for construction purposes have been significantly raised. In 2019, amid intense competition among numerous central state-owned enterprises, state-owned enterprises, and major capital conglomerates, the sand and gravel industry is likely to face even fiercer rivalry.
Overall, the mining industry in 2019 faced a situation characterized by both opportunities and challenges. In 2019, the risk of economic downturn intensified, with China's economic growth rate slowing down; GDP growth is expected to reach 6.3%. Consumption growth of China's major mineral products has also slowed, while mining companies' production costs continue to rise. The lack of vitality in the mining market is likely to persist, and investment in non-oil and gas mineral exploration may continue to decline, potentially impacting exploration results. Meanwhile, China's imports of bulk mineral products have kept growing, further increasing its dependence on foreign sources. As China's economy continues to grow, demand for mineral products will maintain a certain growth rate—particularly for minor metals such as lithium, cobalt, nickel, and vanadium, as well as non-metallic minerals like fluorite, graphite, and sand and gravel aggregates—whose demand could experience explosive growth, especially in sectors related to new energy and strategic emerging industries. Investment willingness in mineral exploration is on the rise, with resources likely to be concentrated in high-tech minerals and non-metallic minerals associated with strategic emerging industries. In the future, competition in overseas mining markets will intensify, potentially leading to significant fluctuations in these markets. At the same time, this period presents an opportunity for mining companies to pursue overseas investments and mergers and acquisitions. As the situation in the U.S.-China trade war gradually becomes clearer and the pace of supply-side structural reforms is adjusted, downward pressure on China's economic growth is expected to ease, which could help boost the mining market upward.
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