I. China’s Mining Companies’ Overseas Investment and M&A Activities in 2024

Data Source: Announcements from various listed companies; companies are listed in no particular order.

In 2024, gold and copper mines remain the primary target minerals for investment by Chinese mining companies.

II. Geographical Distribution of Foreign Investment in the Mining Industry In 2024, China’s total outward non-financial direct investment across all industries reached US$143.85 billion, representing a year-on-year increase of 10.5%. In 2023, China’s total outward non-financial direct investment across all industries was US$130.13 billion, with a year-on-year growth rate of 11.4%.

Mining Industry Investment Statistics: In 2023, investments flowing into the mining industry totaled $9.88 billion, a decrease of 34.6% from 2022, accounting for 5.6% of the total investment flow for the year. The mining industry ranked fifth in terms of overall industry investment.

Mining industry M&A statistics and outbound investment M&A statistics show a total of 29 projects with a combined value of US$1.65 billion, accounting for 8% of China’s total outbound investment and M&A volume in 2023.

China’s mining industry’s stock of investments in various continents worldwide

Data Source: Ministry of Commerce of the People’s Republic of China, National Bureau of Statistics, and State Administration of Foreign Exchange, “Statistical Bulletin on China’s Outward Direct Investment in 2023”

Among them, China’s mining industry has the largest stock of investments in Asia. Thanks to the impetus of the Belt and Road Initiative, Asia is one of the core regions of this initiative, and cooperation between China and Asian countries along the Belt and Road in areas such as infrastructure and resource development continues to deepen. Moreover, Asia boasts abundant mineral resources. In 2023, China’s investment under the Belt and Road Initiative in the metals and mining sector reached US$19.4 billion, hitting a new all-time high.

III. Mining Investment from the Perspective of China’s Investments in Major World Economies

China’s Direct Investment in the World’s Major Economies

Data Source: Ministry of Commerce of the People’s Republic of China, National Bureau of Statistics, and State Administration of Foreign Exchange, “Statistical Bulletin on China’s Outward Direct Investment in 2023”

China’s mining industry’s direct investment in major global economies

Data Source: Ministry of Commerce of the People’s Republic of China, National Bureau of Statistics, and State Administration of Foreign Exchange, “Statistical Bulletin on China’s Outward Direct Investment in 2023”

In 2023, China’s direct investment flows to ASEAN totaled US$25.12 billion, an increase of 34.7% over the previous year, accounting for 14.2% of the country’s total investment flows for the year and 17.7% of its total investment flows to Asia. As of the end of 2023, China had established more than 7,400 directly invested enterprises in ASEAN, employing over 720,000 foreign workers. Direct investment in the mining sector reached US$490 million, a decrease of 73%, accounting for 2% of total direct investment to ASEAN, with the majority flowing to Indonesia and Singapore.

4. Political risk is the greatest risk in overseas mining investments.

(1) Several countries are strengthening their policies to protect domestic mineral resources.

Canada: Canada has updated its investment policy, subjecting foreign investments in critical minerals sectors to stringent scrutiny and approving transactions involving foreign investment in critical minerals only in “the most exceptional circumstances.”

Intelligence: In 2023, the Chilean government introduced the "National Lithium Mining Strategic Guidelines," aimed at strengthening the nation's management and development of lithium resources. The guidelines explicitly stipulate that the development of lithium resources is typically either directly undertaken by the state or state-owned enterprises, or carried out through administrative concessions or special operating contracts.

(2) Multiple countries are advancing mining reforms.

Rwanda: In 2024, Rwanda’s revised Mining Act officially came into effect, stipulating that the government may hold a non-voting equity stake in mining projects and will have exclusive rights over designated strategic minerals. At the same time, the penalties for illegal mining and illicit mineral trading have been significantly increased.

Madagascar: Madagascar has enacted a new Mining Law, established a National Mining Commission, and strengthened the functions of the Mining Authority. The law requires companies to form joint ventures with the government to apply for mining rights, with the government holding a 10% stake as a non-voting equity interest.

Zambia: Zambia is reviewing the draft “Mineral Regulatory Commission Act” and the “Geological and Mineral Development Act.” The country plans to establish a Mineral Regulatory Commission to regulate activities related to the exploration, processing, and trade of mineral resources.

Mongolia: Mongolia has revised its mining law to limit the equity stake that private investors can hold in strategic mineral deposits. The government may acquire companies owning such strategic deposits without compensating the owners.

(3) Export Controls

Zimbabwe: Zimbabwe has canceled the tax relief on mineral exports and plans to impose a 5% tax on exports of unrefined platinum, in an effort to encourage mining companies to invest in plant construction.

Rwanda: Rwanda’s 2024 Mineral Tax Law introduces an export tax on minerals, with varying tax rates depending on the type of mineral. The tax is designed to encourage local value-added processing.

Zambia: Zambia requires investors in the critical minerals sector to source at least 35% of their purchases from local suppliers and imposes restrictions on the export of unprocessed minerals.

Vietnam: Vietnam plans to ban the export of unprocessed rare earths and will require that, in the future, the development of critical minerals such as rare earths must involve deep processing conducted within the country.

(4) Things to Do Before Investing

1. Before making an investment decision, it is essential to conduct an in-depth study of the political environment in the target country or region, including government stability, policy continuity, election cycles, and geopolitical relationships.

2. Analyze the target country’s mining policies, tax policies, environmental protection policies, and other relevant regulations, and assess the impact of policy changes on project costs and revenues.

3. Assess the likelihood of a government change and its potential impact on existing projects.

5. Countries along the Belt and Road in Africa and Asia will become key regions for overseas mining investments.

Countries along the Belt and Road Initiative are rich in natural resources. According to publicly available data, these countries hold copper reserves totaling 130 million tons, accounting for approximately 18% of the world’s total copper reserves; iron ore reserves of 67.6 billion tons, representing about 40% of global iron ore reserves; lead-zinc ore reserves of 109.1 million tons, equivalent to roughly 32% of the world’s total lead-zinc ore reserves; nickel ore reserves of 14.1 million tons, making up around 19.1% of global nickel ore reserves; and gold reserves of 14,000 tons, accounting for approximately 26% of the world’s total gold reserves. Due to past conflicts, political instability, or limitations in their own economic and technological conditions, many of these countries have not adequately explored or developed their mineral resources, leaving a significant portion of these resources underutilized. With the advancement of the Belt and Road Initiative, by 2025, these countries and regions will become attractive destinations for China’s overseas mineral investment, particularly in Southeast Asia, Central Asia, and Africa.