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China to restrict junior gold mining exploration investment
By: Dorothy Kosich
Posted: '01-DEC-06 08:00' GMT © Mineweb 1997-2006



RENO, NV (Mineweb.com) --Quoting a source from the National Development and Reform Commission, the Chinese news media says China will impose restrictions on small foreign investors in the gold mining sector.

“The sector doesn’t need many small foreign investors as there have been a large number of small gold miners,” the sources said. “The new policy is designed to improve the quality of foreign investment to ensure sustainable development of the sector.”

There are more than 100 foreign companies investing in China’s gold mining sector. However, a number of junior companies engaged in prospecting, sold high-grade resources to larger companies, and stopped exploration, leaving unworked low-grade ore. It is estimated that there are 4,134 tonnes of gold reserves in China with more than 1,000 tonnes considered to be hard to treat low-grade deposits.

China’s gold production is expected to achieve a new record of 240 tonnes this year. The Chinese Government hopes to encourage consolidation among domestic gold miners to form larger mining companies. It is estimated than that of the 1,200 gold mines in China, 739 mines have less than 50tpd mining capacity.

In a recent meeting in Beijing, Chen Fumin, President of the China National Gold Group, said large foreign mining companies with their advanced technologies and management expertise will be encouraged to participate in China’s gold sector. Chen’s company produces one-fifth of China’s annual gold output.

China is now the world’s third largest gold consumer after India and the United States. The National Development and Reform Commission predicted that Chinese gold production would increase by 5% annually during the next three years.

Meanwhile, U.S.-based newsletter editor Harry Schultz recently quoted a “well placed Swiss banker” who asserts that China will increase its gold reserves in the next year.

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