“Currently China’s mining industry is at the stage of downturn deep adjustment period, and the key factor affecting the recovery is the downward margin and adjustment duration.The only way out is to deepen reform,speed up structural adjustment, kick off a new round of technological innovation, improve labor productivity, so as to tide over the difficult period.” Wang Jiahua, Executive Vice President of China Mining Association, said at the recent Press Propaganda Work Conference 2014 of the China Mining News that it’s necessary to adopt macro vision to correctly judge the current situation of the mining industry from the perspective of economic globalization.

Regarding the situation of domestic mining industry, Wang Jiahua said “the contribution of China’s mining industry to macro economy has not stopped,the demand for mineral products is still growing, but the growth rate has slowed down.” Judging from statistical figure in the first half of the year, 10 varieties of nonferrous metals increased by 6.7% compared with the same period last year,iron ore increased by 7%compared with the same period last year, oil and gas grew by 1% compared with the same period last year; coal is the only one that maintained same growth as last year. Iron ore import grew by 19%in the first half of the year compared with the same period last year; 10 varieties of nonferrous metals, especially copper, grew by 34% compared with the same period last year.”

Furthermore, the painful period of structural adjustment has produced effects in the mining industry: some ore varieties such as coal have encountered surplus in production capacity;environmental pressure continued to grow;prospecting investment declined by 13.7%,drilling workload dropped by 21.7% compared with the same period last year; mineral assets suffered severe damage, the stock value of primary prospecting company at Toronto TSX Venture Exchange plummeted by about 70%～80%, financing encountered bottleneck,operation experienced unprecedented difficulty,prices of mineral products continued to fall; 14 World Top 500 mining related enterprises in China sustained loss.

Wang Jiahua considered that the critical period to tackle major difficulties for China’s mining industry in deepening reform had begun, and it had generated reverse coercion mechanism. On the issues of walking the path of green development, scientific “walking out”, and establishing China’s venture exploration capital market, China’s mining industry has developed common understanding. “The positioning of mining industry as primary industry has been acknowledged by the academic circle, and developed industry consensus, and Premier Li Keqiang has issued instruction for the research report of China Mining Association.”

“ The contribution percentage of Chinese economy in the global mining economy is the highest, in the downturn it supported prosperity. Without China, it’s impossible to keep iron ore price at USD90/tonne.” Wang Jiahua emphasized, China has no responsibility for the declining prices of mineral products in this year.“ China’s GDP growth rate decreased from two digit to 7.5%, but the absolute number is still growing, which has minimum impact on the international market. However,emerging economies lacked momentum in development, and developed economies recovered slowly; the consequence is extra capacity added by the global mining industry cannot be consumed by more countries within a short period of time,which results in price drop of mineral products.”How long will this downturn last? Will the decade long mining golden period recur?About these questions, Wang Jiahua considered that the length of downturn depends on the“fundamentals” of China’s mining industry,along with the development of other emerging economies, “As far as macro economy is concerned, in the next 15～20 years, China’s rigid demand for mineral products will continue to grow.If India’s GDP maintains 6%growth rate, after 15 years it will enter the historical time node of rapid growth in rigid demand for mineral resources, and take over China’s ‘relay baton’, only in this way can the prices of mineral products keep stable,otherwise, there is not much hope of rising prices of mineral products.”