According to the latest data released recently by the National Bureau of Statistics, from January to October 2016, the total profits of China’s industrial enterprises above a designated size increased by 8.6% year-on-year. However, the total profits of mining enterprises above a designated size amounted to 113.8 billion yuan, down 48.5% year-on-year. Among these, with the exception of coal mining and washing as well as non-ferrous metal mining, which saw a significant year-on-year increase in total profits, the profit margins of oil, natural gas, ferrous metal, and non-metallic mineral mining continued to decline.

　　Looking at the current global mining landscape, the economic recovery has fallen far short of expectations, leading to weak demand for mineral products, a sustained decline in mining investments, persistently low mineral prices, and significant downward pressure. Under these circumstances, a pervasive sense of pessimism or negativity has taken hold within the mining industry. Therefore, it is essential for us to conduct a rational, calm, and objective analysis of the current mining situation and its development trends, make scientifically informed judgments, and proactively devise appropriate countermeasures to promote the sustainable development of the mining sector.

　　1. Assessment of the Overall Mining Situation and Development Trends

　　1.1 The Current Overall Situation of the Mining Industry

　　Although the mining industry is currently permeated with a pessimistic or negative atmosphere, it should be noted that after several years of sustained decline, the mining economy has begun to show signs of a slow recovery.

　　Experts analyzing the international mining market point out that in 2016, the mineral products market showed signs of price recovery. First, the S&P Global Mining Index—a key indicator of the mining sector—ended its five-year streak of decline and demonstrated a clear upward trend over the past year. Meanwhile, in June 2016, financing raised by mining companies on the main and venture boards of the Toronto Stock Exchange in Canada reached a four-year high of CAD 640 million, nearly ten times the amount raised in April 2015. In the first eight months of 2016, cumulative financing totaled over CAD 7.5 billion, and this figure continued to rise in subsequent months. Second, global mining transactions have staged a strong rebound: total fundraising in the third quarter of 2016 surged by 53%. According to the latest research from the renowned consulting firm EY, in the third quarter of 2016, global mining and metals M&A activity remained robust, with deal volume increasing by 12% from the previous quarter to 121 deals, and rising by 36% compared to the same period in 2015. According to the EY report, global mining and metals M&A deal volume in the third quarter of 2016 increased by 36% compared to the same period in 2015. The top three most active acquirers were Canada (with 59% of deals involving gold mines), Australia (with 44% involving gold mines), and China (covering a wide range of mineral types). The top three destinations for M&A deals were Canada (primarily gold mines), China (with a broad spectrum of minerals involved), and Australia (also primarily gold mines). In the third quarter of 2016, fundraising in the global mining and metals sector was also exceptionally active, with total funds raised surging by 53% to reach 50 billion yuan, and the number of financing deals increasing by 60% compared to the same period in 2015.

　　From the perspective of the domestic market, first, demand is robust and prices of mineral products are rising. Since April 2016, domestic coal prices have staged a strong rebound from years of sluggishness, with supply falling short of demand. According to monitoring by the China Iron and Steel Association, steel prices have generally been on the rise since 2016. Nonferrous metals have also experienced a collective surge, with prices broadly catching up after earlier declines. Second, according to findings by the Department of Land and Resource Regulation and Monitoring, mining rights transfer fees in the first three quarters of 2016 rose year-on-year. Third, overall import trade in mineral products has shown a recovery trend. Fourth, the overseas M&A performance of Chinese enterprises has drawn considerable attention. A major example is China Molybdenum’s acquisition of Anglo American’s niobium and phosphate assets in Brazil for US$1.5 billion. As of September 10, 2016, Chinese companies had announced and completed a total of 55 overseas energy and mineral investment projects (excluding failed or withdrawn projects), with total announced and completed investments amounting to US$19.722 billion. On November 20, 2016, General Secretary Xi Jinping signed three major mining deals in Peru, sending shockwaves through the entire mining industry. Currently, more than ten domestic mining companies and investment institutions have expanded their overseas operations, covering a wide range of mineral resources—including oil and gas, ferrous metals, and nonferrous metals (such as gold, copper, and aluminum)—showing a truly diversified and widespread presence. Moreover, fixed-asset investments in the coal, petroleum, and ferrous metals sectors increased month-on-month by 16%, 10%, and 18.1%, respectively. Experts believe these developments can be interpreted as significant signals that the global mining industry is bottoming out and beginning its recovery.

　　1.2 Prospects Analysis of Mining Development

　　Since the founding of New China, and especially over the past 30-plus years since the reform and opening-up policy was launched, China’s economy has grown at a rapid pace, with its total economic output now exceeding 10 trillion U.S. dollars, making it the world’s second-largest economy after the United States. On average, China’s economic growth has contributed about 30% annually to global economic growth, making it a key engine driving the world’s economic expansion. Among these achievements, the development of the mining industry has played an indispensable role. Today, China has become the world’s largest producer, consumer, and trader of mineral products, providing strong support for China’s economy.

　　Regarding the current situation in the mining industry, the author tends to favor the view of “cyclical fluctuations in the mining cycle.” In other words, the current global downturn in the mining sector is still driven by cyclical adjustments. As we know, the industrialization of the United States gave rise to the “first cycle” of mining development, while the industrialization of Europe ushered in the “second cycle” of mining development. Now, the unprecedented demand for mineral resources fueled by the industrialization of emerging economies—led by China—has placed the global mining economy squarely in a “super third cycle.” This cycle is far from over. The current overcapacity in the mining sector is primarily a short-term phenomenon resulting from the global economic slowdown and China’s intensified efforts to restructure its economy and upgrade its industries. Looking ahead, the mining sector will still experience a period of relatively rapid growth. The specific evidence supporting this view includes the following points:

　　As is well known, a major characteristic of urbanization is a production and consumption pattern that is highly resource-intensive. Currently, the global middle class is estimated to number around 1.85 billion. According to analyses and forecasts by various international organizations, this figure could rise to 4.88 billion by 2030. By 2050, it is projected that the urban population in China, India, and the six ASEAN countries will increase by an additional 1.3 billion. As emerging economies, over the next decade and beyond, the BRICS countries—including China, India, Russia, Brazil, and South Africa—as well as the Next Five countries—including Vietnam, Indonesia, South Africa, Turkey, and Argentina—will see their demand for mineral resources grow at an unprecedented and rapid pace, driven by their rapid economic development.

　　China is still in the mid-to-late stages of industrialization. At the same time, the urbanization rate has just surpassed 40%, far below the 70% to 80% seen in Western countries, indicating that urbanization is only just beginning. Relevant authorities predict that by 2020, the number of people migrating from rural areas to cities in China will reach approximately 320 million. In other words, during the next several decades of rapid growth, hundreds of millions more people will move into urban areas. As industrialization, urbanization, and agricultural modernization accelerate, there will be a pressing need to build essential infrastructure such as highways, railways, and airports. Moreover, addressing the issue of farmers moving into cities will require the construction of a large number of new residential units. This, in turn, will inevitably boost demand for construction materials like steel, cement, and glass, as well as for consumer goods such as home appliances and furniture. All these products rely on mineral resources as either materials or raw ingredients. Meanwhile, as the “world’s factory,” China also consumes vast quantities of mineral resources to manufacture machinery, equipment, and daily-use products for countries around the world. Furthermore, the implementation of the Belt and Road Initiative likewise depends on mineral resources as a crucial support.

　　The “National Mineral Resources Plan (2016–2020),” recently released by the Ministry of Natural Resources and the Ministry of Land and Resources, assesses China’s current mineral resource situation as follows: For most major mineral resources, the reserve-to-production ratio is relatively low. Per capita recoverable reserves of minerals such as oil, natural gas, iron, copper, and aluminum are significantly below the global average, indicating a relatively weak resource base. By 2020, China’s primary energy consumption is projected to reach approximately 5 billion tons of standard coal, with iron ore demand at 750 million tons of benchmark ore, refined copper at 13.5 million tons, and primary aluminum at 35 million tons. Affected by the international mining market, domestic exploration investment has been trending downward, thereby increasing the risks to the secure supply of China’s mineral resources.

　　The author believes that although the global mining market has experienced a significant contraction and downward trend compared to the robust boom of previous years, the fundamental outlook for the mining industry and resource-based sectors remains fundamentally unchanged. For quite some time to come, global demand for resources will continue to remain strong. Over the next 15 to 20 years, driven by consumer demand from China, ASEAN, India, and other emerging economies, the global mining sector is very likely to enter a new round of growth. Only after China and other emerging economies have largely completed their industrialization and urbanization processes will global economic development gradually reduce its demand for mineral resources.

　　2 New Changes and Emerging Issues in Mining Development

　　In recent years, the global mining industry has exhibited several new trends that differ from previous patterns. Jiang Daming, Minister of the Ministry of Natural Resources, has summarized these trends into three key aspects: First, new areas of development are continuously expanding, while the capacity of traditional markets is relatively shrinking; second, new drivers of growth are emerging, whereas traditional growth engines are gradually losing momentum; and third, new cooperation mechanisms are showing promising signs, while conventional governance models are becoming increasingly weak. For the development of the mining industry, as the global economy recovers, these new trends could evolve into a new normal.

　　Currently, a new industrial revolution is taking shape. From the perspective of technological revolutions and shifts in scientific paradigms, there is a growing consensus that advancing multidisciplinary integration and synthesis—centered on the study of global change and the interactions among Earth’s various spheres—is essential. Innovation-driven development offers an opportunity to transform traditional geological sciences into modern Earth sciences centered on Earth system science. Meanwhile, technologies such as big data, cloud computing, and mobile internet provide crucial opportunities for profound changes in mining exploration concepts, methods, and tools. Moreover, the continuous emergence and rapid advancement of modern Earth observation and exploration technologies are making it increasingly easier for humanity to explore not only the Earth and oceans but also outer space. This could lead to the establishment of a three-dimensional exploration technology framework—from the air to the ground, from the surface to deep subsurface, and from Earth to space—greatly enhancing the depth, precision, and scope of exploration. As a result, the capacity and range of mineral resource exploration and mining operations will be significantly expanded.

　　At the 2016 National Conference on Scientific and Technological Innovation, General Secretary Xi Jinping emphasized that “advancing into the deep interior of the Earth is a strategic scientific and technological issue that we must address.” In September 2016, the Party Leadership Group of the Ministry of Natural Resources formulated a “four-in-one” strategy for scientific and technological innovation—comprehensively implementing deep-earth exploration, deep-sea exploration, deep-space Earth observation, and land engineering technology—thus sounding the rallying call for China’s geological work and mining development in the new era. Indeed, in the face of the rapid advancement of modern science and technology, major countries around the world—especially developed Western nations—are all seeking breakthroughs in scientific and technological innovation to seize the initiative and gain a leading edge in future technological development. Therefore, we must seize the initiative, target the cutting-edge frontiers of global geology and mining technology, concentrate our efforts on tackling core technologies, accelerate the application of research findings, and promote industrialization. We should strive to quickly rise to the world’s forefront in key areas such as deep-earth, deep-sea, and deep-space exploration.

　　3 China’s Response Measures

　　Under the new normal of economic development, China’s mining sector is increasingly facing deep-seated contradictions and problems, which are mainly reflected in the following aspects: First, structural contradictions are particularly prominent. There is overcapacity in coal production, while supplies of clean energy sources such as oil and gas remain insufficient. Major metal minerals like iron, copper, and aluminum lack strong competitiveness in the international market, and the development level of strategic emerging mineral resources such as rare earths and crystalline graphite remains low. Second, resource exploitation lacks sufficient intensity and scale. The issues of “many small-scale, scattered operations” persist; nationwide, mines of small size or smaller account for as much as 88.4%, yet their production capacity accounts for less than 40%. Third, the scientific and technological foundation of the mining industry is weak, innovation capabilities are insufficient, innovation platforms are incomplete, and both the quality and efficiency of development need to be improved. Fourth, ecological and environmental issues are particularly acute. Coordination between resource development and ecological protection is inadequate; the environmental impacts resulting from intensive mineral extraction coexist with long-standing legacy problems, imposing enormous environmental costs. Fifth, there are diverse and conflicting interests, with persistent disputes between mining enterprises and local communities. These issues seriously hinder the healthy and sustainable development of China’s mining industry.

　　The 13th Five-Year Plan period marks the decisive stage for China to fully build a moderately prosperous society in all respects. In September 2016, Minister Jiang Daming explicitly stated at the 2016 China International Mining Conference held in Tianjin that we should develop “five types of mining”: reform-driven mining, green and safe mining, inclusive and shared mining, innovation-driven mining, and open and mutually beneficial mining. This can be understood as the country’s overall guiding principle or goal for the future development of the mining industry. To break out of the current predicament of low- and mid-end positioning, move toward the mid- and high-end levels, build new core competitiveness, and achieve comprehensive, coordinated, and sustainable development, China’s mining sector must earnestly implement the spirit of ecological civilization advocated by the central authorities. In particular, it must take the new development philosophy proposed at the Fifth Plenary Session of the 18th CPC Central Committee as its guiding principle, truly understand and grasp the recently issued policies and regulations from the state and relevant departments aimed at promoting the scientific development of the mining industry.

　　The “National Mineral Resources Plan (2016–2020),” recently released by the Ministry of Natural Resources, actually provides top-level design and clear arrangements and deployments for the development of the mining industry over the coming period—particularly during the 13th Five-Year Plan period, or the next five years.

　　According to the plan, the overall guiding principle for China’s mining development over the next five years is to be led by the five new development concepts and integrate them throughout the entire process of mining development: namely, adhering to innovative development to boost new momentum for mining growth; pursuing coordinated development to optimize the pattern of mineral resource exploration and protection; embracing green development to strengthen resource conservation, intensive use, and circular utilization; promoting open development to foster win-win cooperation in the global mining sector; and upholding shared development to ensure that mineral resources benefit and serve the people. By doing so, we aim to basically establish a secure, stable, and economically viable resource保障 system by 2020; essentially form a green mining development model characterized by resource conservation, efficiency, environmental friendliness, and harmony between mining activities and local communities; and basically build a modern mining market system that is unified and open, features orderly competition, and is full of vitality. This will significantly enhance the quality and efficiency of mining development and substantially achieve the overarching goal of establishing a new paradigm for resource security and mining development.

　　In promoting the transformation and upgrading of the mining industry, the “Plan” makes arrangements primarily in five areas: first, adjusting the structure of resource development and utilization; second, optimizing the spatial layout of mineral development; third, strengthening the efficient, intensive, and circular use of resources; fourth, vigorously advancing scientific and technological innovation in the mining sector; and fifth, fostering and developing mining enterprises with market competitiveness.

　　In accelerating mining sector reform and enhancing the vitality of mining development, the “Plan” outlines seven key initiatives: First, opening up the markets for oil, gas, and uranium exploration and development; second, expanding the scope of competitive bidding for mining rights; third, promoting the devolution of authority for approving mining rights; fourth, advancing reforms to the tax and fee system for mineral resources; fifth, reforming the regulatory approach for mineral resources; sixth, strengthening macro-management of mineral resources; and seventh, improving the modern mining market system.

　　Of course, to thoroughly address the deep-seated contradictions and problems that have accumulated over the long term in the mining sector, we need to remove institutional barriers, strike a proper balance between the market and the government, unlock the benefits of reform, and invigorate and boost the development of the mining industry. This involves multiple departments and various stakeholders, and thus calls for systematic planning, a step-by-step approach, and comprehensive advancement.

　　4 Conclusion

　　In summary, the author believes that, given the current shift of China’s economy into a “new normal,” the traditional mining development model—relying on factor-driven growth and scale expansion—is no longer sustainable. We cannot expect the mining sector to continue its explosive growth trajectory as it did in previous years, nor can we rely on speculative trading of mining rights to reap huge profits. However, this does not mean that China’s mining industry has reached its end. As long as we accurately grasp the overall trends of economic development now and in the coming period—especially the broader trends in mining development—and strictly adhere to a green mining development model characterized by resource conservation, efficiency, environmental friendliness, and harmony between mining activities and local communities, while properly balancing the relationships among government and market, short-term and long-term interests, local and global perspectives, resources and the environment, and domestic and international markets, we can remain calm in the face of challenges, seize opportunities, and adopt scientifically sound policies. Under these conditions, the mining industry can certainly achieve great success in an even wider range of fields and spaces.