Mining industry in China

Summary
China is world’s largest producer for coal, gold and most rare earth minerals. Besides the production, China is world’s leading consumer of most mining products. This report highlights key players in China, the role of the government, relevant developments and opportunities for Dutch organisations. Furthermore, this report provides a list of events related to the mining industry in China.

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In total there are more than 10,000 (mostly coal) mines in China, producing a large amount of the world’s supply. China is world’s largest producer for coal, gold and most rare earth minerals. Besides the production, China is world’s leading consumer of most mining products, particularly for commodities like thermal coal and iron ore, approximately 49% and 58% of global total respectively.

Key players in China

The mining industry in China is a fragmented industry, in which many companies operate in the same area. The top is represented by large state-owned firms, which extract and process resources on a provincial or regional scale. Most of the companies are also involved in varies other business activities related to their mining operations. Below are some of the mining companies, divided per resource:

Coal

  • The biggest coal mining company by extraction volume is Shenhua Group.
  • The second biggest coal mining firm is China Coal Energy
  • Others are: Shaanxi Coal and Chemical Industry, Yanzhou Coal Mining, China Coal Technology & Engineering, Kailuan, China National Administration of Coal Geology, Shandong Energy, Shanxi Coal Transportation and Sales, Shanxi Coking Coal, Datong Coal Mine, Xuzhou Coal Mining, Shanxi Luan Mining, Shanxi Jincheng Anthracite Mining, China Pingmei Shenma Energy & Chemical, Yankuang, Huainan Mining, Huaibei Mining, Heilongjiang Longmay Mining, Fushun Mining, Jizhong Energy, Guizhou Panjiang Investment Holdings, Jiangxi Coal, Liaoning Tiefa Energy, Shenyang Coal Trade, CDIC Coal, Henan Coal Chemical Industry, Yangquan Coal Industry, Jilin Coal Industry, Sichuan Coal Industry, Inner Mongolia Yitai, Wanbei Coal-electricity, Yima Coal Industry, Zhengzhou Coal Industry, Pingzhuang Coal Industry, Huating Coal, Yunnan Coal Chemical Industry, China Datang Coal Industry, China Huadian, among others.

Copper

  • The largest copper mining is Jianxi Copper Company. It is also one of the largest gold and silver mining.
  • Tongling Non-Ferrous Metals Group is ranked second in the copper mining industry.
  • Other players are Yunnan Copper, Daye Non-ferrous Metals and Jinchuan,

Gold

  • The biggest gold producer is Zijin Mining. Besides, it is the second biggest copper producer and a large producer for iron ore and silver.
  • Other players are China National Gold (CNGGC) and Shandong Gold Mining

Bauxite

  • Aluminium Corporation of China (also known as Chalco) is China’s largest bauxite mining in China.
  • Other companies active in bauxite mining, are Henan Shenhuo, Qingtongxia Aluminium, Lanzhou Aluminium and Shanxian Jinjiang Mining.

Please note that above list is not complete.

Besides companies, the China University of Mining & Technology relates to the mining industry in China. This university is a national key university and has a worldwide reputation in coal mining technology and researching. The main campus is located in Xuzhou, Jiangsu province, and another campus is located in Beijing.

The China Academy of Machinery Science & Technology provides research and development services for the mining industry. It offers services for machinery manufacturing, automobile, aerospace, environmental protection, chemical engineering and construction fields.

Role of the government

The mine industry is dominated by State-Owned Enterprises via which the government influences policies. Chinese government organizations related to the mine industry are:

  • The People’s Republic of China National Development and Reform Commission
  • Ministry of Science and Technology of the People’s Republic of China
  • Ministry of Industry and Information Technology of the People’s Republic of China
  • Ministry of Land and Resources of the People’s Republic of China
  • Ministry of Commerce of the People’s Republic of China
  • State-owned Assets Supervision and Administration Commission
  • State Administration of Quality and Technical Supervision
  • National Energy Administration
  • State Administration of Coal Mine Safety

Furthermore, various industry association are active in China, such as,

  • China Occupational Safety and Health Association
  • China Coal Miner Pneumoconiosis Prevention and Treatment Foundation
  • China Association of Work Safety
  • China Coal Transportation & Sale Society
  • China Coal Processing & Utilization Association
  • China Coal Economic Research Association
  • China National Coal Machinery Industry Association
  • China Mining Association
  • China Machinery Industry Federation
  • China Construction Machinery Association
  • China Electrical Equipment Industry Association
  • China Council for the Promotion of International Trade Machinery Sub-Council

Relevant development/ actuality

Although mining is an important industry for China, the government aims at closing a part of it. China recently announced that they will shut down more than 1,000 coal mines, with a total production of 60 million tonnes in Guizhou, Yunnan, Heilongjiang and Jiangxi provinces, as parts of efforts to trim production capacity. In 2015, China reached its target by controlling the total number of coalmines within 10,000 and will continue its efforts to reduce outdated capacity this year. Goal of the plan is to develop western regions, protecting the environment, and improving energy efficiency. Besides closing mines, China plans to stop approving coalmines for the next three years. The country produced 3.7 million tonnes coal in 2015 and has an estimated capacity surplus of 2 billion tonnes per annum.

Opportunities for Dutch companies and knowledge institutes

In various subsectors related to mining, foreign investments is encouraged, while in others it is restricted or even prohibited. Foreign investment is encouraged for prospecting, exploitation, utilization and/or beneficiation of coal-bed gas and iron ores and manganese ores. Secondly, it is encourages for the development and application of new technologies for improving the utilization of tailings and the comprehensive utilization of recovery technology of the mine ecology. Thirdly, prospecting and exploitation of unconventional natural gas resources such as shale gas and submarine natural gas hydrate is a subsector in which China encourages foreign investments.

Activities

Throughout the year there are various exhibition and fairs related to the mining industry in China, such as:

  • World Aluminium Conference 2016, May 9-11, Shanghai
  • China International Mining Expo 2016, May 23-25, Beijing
  • China Gold Congress and Expo 2016, July 26-28, Beijing
  • International Field Exploration and Development Conference 2016, August 11-12, Beijing
  • China Mining Conference and Exhibition 2016, September 24-27, Tianjin
  • International Non-Ferrous Metals Expo of China 2016, October 10-12, Shanghai
  • Sustainable Industrial Processing Summit & Exhibition 2016, November 6-10, Hainan
  • Bauma China 2016, November 22-25, Shanghai
  • International Symposium on Digital Rock Physics and Applications 2017, March 30-31, Beijing
  • China Coal & Mining Expo 2017

Sources, further reading

  1. http://www.mining.com
  2. http://www.chinadaily.com.cn/china/2016-01/17/content_23120259.htm
  3. https://www.pwc.com/id/en/asia-school-of-mines/assets/chinas-mining-sector_benson-wong.pdf
  4. http://www.investopedia.com/articles/markets/091615/7-biggest-chinese-mining-companies.asp
  5. http://www.ibisworld.com/industry/china/coal-mining.html
  6. http://www.ibisworld.com/industry/china/copper-ore-mining.html
  7. http://www.ibisworld.com/industry/china/aluminum-ore-mining.html
  8. http://www.reuters.com/article/us-china-energy-coal-idUSKCN0VV0U5

STORM: the EV motorcycle

The Electric Vehicle (EV) revolution is a silent one, in many respects. New energy vehicles, powered by electricity, roam the streets without sound. But more so, the majority of them are designed in small and dedicated garages, distant from the globally operating traditional car-OEMs, without humongous global marketing budgets, lacking an established ecosystem where consumer, producer and supply chain lock them.

The revolution is surely silent in the Netherlands. Year after year, student teams at various Dutch universities are creating award-winning electric cars and motorcycles; research institutes are generating intelligent solutions for mobility and safety; industry is creating solutions that have put the Netherlands at the forefront of car connectivity and Intelligent Traffic System solutions. One example that exemplifies the potential of this complete value chain is Stella Lux: a solar-powered Electric family car that may drive more than 1500 km on a single charge. It has been declared road-legal by the European road authorities and by that it entered a “beyond concept” stage. The fact that no-one has started to move this car towards production is indicative for the silence. Surely one needs a lot of patience to move EV automotive into a truly sustainable direction, even when the solutions on how to do it are presented on a silver platter.

Luckily, revolutionary solutions keep coming out of the Netherlands. This year, an electric motorcycle produced by STORM Eindhoven is going to see the light, and is scheduled to travel around the Northern hemisphere within 80 days. Like Stella Lux, the motorcycle is conceived and built by a team of students from the Eindhoven University of Technology, and supported by a broad network of local and international organizations in the high-tech (semiconductor) and automotive sectors. And like Stella Lux, China is attractive for STORM as well. STORM actually aims to cross China from west to east this summer, visiting numerous cities, where the team will organize numerous events in order to inform as many people as possible about the benefits and potential of electric driving.

The STORM motorcycle has been designed to be a comfortable touring bike, that drives up to 380 km on one full charge. In order to make electric mobility more approachable, the STORM team aims at standardizing and accelerating battery swap systems. One key advantage is that the battery system is modular, and the number of battery modules for each ride can be adjusted to the expected capacity needed. As a result, due to weight reduction on short trips, the motorcycle uses less energy. And, once an industry standard has been set, the ownership, management, charging and innovation within battery systems will be independent of the EV-owner.

It is expected that STORM will gather a lot of attention during the upcoming world tour. The Holland Innovation Network appreciates the support from everyone that contributes to the success of STORM in China. China’s personal transportation sector is still growing, and the Chinese EV sector may have globally the greatest potential. Once EV innovation is unfolding itself in China, the EV revolution will surely become a not-so-silent one. STORM, the most recent ambassador for excellency in the Dutch EV innovation sector, will hopefully inspire to speed up these developments in China.

More info can be found on the website of STORM.
STORM is also on WeChat:

STORM-QR-Code

 

 

Diversification in the Chinese innovation landscape and supercomputers as enablers

Summary

Chinese scientific excellence is developing quickly. Simultaneously, there is a rapid increase in supercomputing capacity. Combined, these may be indicative for the expanding diversification in the innovation landscape in China.

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China is traditionally seen as a country with one dominant, central, top-down administration. As a capital, Beijing has been at China’s heart of governance, finance, science, education, industry and services for many centuries. In recent years, however, China has invested heavily in telecommunication, infrastructure and logistics, leading … Read more

Opportunities for Dutch semiconductor equipment companies in China

The semiconductor industry is extremely important for both China and the Netherlands. China accounts for 56% of the global semiconductor sales market which totals 330 billion US$. In addition, in 2015 China was the only region in the world that showed growth year over year in semiconductor sales, namely +7.7% (see figure below).

There is another very strong indicator of the importance of the Chinese semiconductor industry; in September 2014, the central government set up the China Integrated Circuit Industry Investment Fund (CICIIF/Big Fund). This fund plans to invest more than 160 billion US$ into the Chinese semiconductor industry in the coming 10 years. The target is to reduce reliance on foreign suppliers and domestically produce 40 percent of all chips consumed by Chinese industry in 2020 and 70 percent in 2025 (currently around 30 percent).

These policies are part of China’s ‘Made in China 2025 Policy’ and align with the thirteenth Five Year Plan’s goals to become stronger in high tech and R&D. This policy of support for the domestic semiconductor industry gives particular attention to IC design and production. In the complex area of high-end semiconductor equipment where a high level of knowledge and skills are necessary for development, it will be more challenging and probably take longer to close the technology gap with global leaders. Therefore, the Chinese semiconductor industry provides huge potential for Dutch semiconductor companies.

 

Dutch semiconductor equipment industry

Although the Netherlands is not a big market for semiconductor sales, the semiconductor industry is very important in the Netherlands. For example, Dutch companies are very strong in semiconductor equipment manufacturing. The global market for semiconductor equipment sales is more than 30 billion US$ and about 20% of all equipment is delivered from the Netherlands, mostly to Asia.

Of course, these numbers are heavily impacted by ASML being the dominant player in lithography equipment with a global market share of more than 80%. But also in other areas, especially at the high-end side like high-resolution imaging and atomic layer deposition, Dutch industry plays a very significant role. Some other Dutch companies active in the semiconductor equipment sector are ASM International, BESI, Boschman Technologies, Bronkhorst High Tech, Jiaco Instruments, Mapper Lithography, NTS Group and Sempro.

The semiconductor equipment sector is by far the largest private R&D investor in the Netherlands with total investments exceeding € 1 billion annually, more than one sixth of total private R&D investments in the Netherlands. In addition, many universities and institutes are doing research related to semiconductor equipment. The long-lasting collaboration between industrial laboratories, research institutes and academia, together creating a large informal network, allows the effective utilization of resources and results in joint product development, roadmaps and ecosystems.

 

Collaboration between Chinese and Dutch semiconductor companies.

Considering the importance of the semiconductor industry for both China and the Netherlands, the current investment climate, and the excellent capabilities of Dutch semiconductor companies, there is a huge potential for Sino-Dutch collaboration.

During the week of Semicon China, an exposition offering the latest in technology and innovation in the electronics industry with more than 50,000 attendees, the Holland Innovation Network at the Consulate-General in Shanghai organized a seminar to stimulate Sino-Dutch collaboration in the semiconductor industry. The seminar was attended by more than 30 participants including from Boschman, Bronkhorst High Tech, Jiaco Instruments, NTS Group and Sempro, and from more than 20 Chinese companies and organizations.

After an introduction by Taake Manning, Counsellor for Innovation, Technology and Science at the Dutch embassy in Beijing, Barry Peet, managing director of Business Cluster Semiconductors Netherlands (BCS) and Holland High Tech China Center’s (HHTCC) general manager Ronnie Li, provided an overview of the semiconductor industry, potential areas for collaboration and HHTCC’s existing facilities and infrastructure in China to assist in this kind of cooperation. Professor Yang of Guilin University of Electronic Technology shared the current state of affairs of the Chinese semiconductor industry and its key players and Philipp Barth of the EU Delegation to China shared information about the EU China research and innovation co-funding mechanism, which can be used to get funding for collaboration projects.

After these presentations, Consul-General Anneke Adema kick-started an informal discussion about opportunities for collaboration and there was plenty of time for networking and getting to know each other better. Many of the Dutch companies arranged follow-up meetings with interested Chinese parties to discuss the potential for collaboration and new business opportunities.

 

Exploring new opportunities and intensifying collaboration

To intensify cooperation between Dutch and Chinese semiconductor industry Business Cluster Semiconductors Netherlands and Suzhou IC Industry Association signed a Memorandum of Understanding (MoU) at the Semicon China exhibition. With the MoU both parties agree to strengthen the international scope of their members’ portfolios and support and facilitate collaboration between their members. The MoU was signed at the Holland High Tech booth at the Semicon China exposition where many Dutch semiconductor companies were among the exhibitors.

The day after Semicon China, Holland Innovation Network arranged two company visits for the Dutch companies that attended the seminar on Monday and the Semicon China exposition. At their Shanghai facility NTS Group explained how they successfully operate in China as a Dutch company providing assembly and testing of high-tech mechatronic modules. Advanced Micro-Fabrication Equipment Inc. (AMEC), a manufacturer of etch equipment, gave us an introduction about their company, their product and technology offerings and plans for the future. Based on the meeting and discussion with relevant counterparts, two Dutch companies made follow up meetings with AMEC.

China’s 13th Five-Year Plan: focus on innovation

It’s nothing new, but it’s on (official) paper. China’s focus for the upcoming five year is on “innovation”. The second chapter (just after the guiding principles, main objectives and development concepts) in the 13th Five-Year Plan is how to implement the strategy of an innovation-driven development in China. Science and technology’s contribution to economic growth in 2020 is pinpointed at 60%.

Every five year the Chinese government announces a “Five-Year Plan”. This plan describes goals and targets for upcoming years, and identifies main sectors to focus on. Recently the 13th Five-Year Plan, for 2016 till 2020, has been announced. Innovation is highlighted as the main driver for economic success.

Some specific goals related to innovation are: R&D spending should be 2.5% of GDP, the number of patents per 10,000 persons should be 12, and the contribution of science and technology to economic growth should be 60%.

The government would like to achieve such by encouraging (business/ tech) startups, strengthening the protection of intellectual property rights, increasing the import of advanced technology and equipment and promoting innovative, coordinated, green, open and shared development. Sectors mentioned in the plan: railway and road construction, water conservancy projects, urbanization, agricultural modernization and hydropower, nuclear power, smart grids, among others.

Three topics stand out in the 13th Five-Year Plan, namely:

  1. The active involvement on air quality. There is a binding advice on PM2.5 density decrease as well as on the amount of days with good or excellent air quality in cities.
  2. Following the Made in China 2025 policy, there is a specific focus on intelligent manufacturing.
  3. In line with the Internet Plus strategy, online-to-offline (O2O) and full coverage of access to broadband is highly encouraged. China expects that 70% of all households will have a fixed broadband by 2020, and 85% mobile broadband users.

Sources, further reading

  1. https://www.chinadialogue.net/article/show/single/en/8696-13th-Five-Year-Plan-is- the-first-to-include-PM2-5-targets
  2. The report on the work of the government. Key points. March 5, 2016.
  3. Working translation based on the 05 March 2016 draft of the 13th Five-Year Plan. Key Indicators of Economic and Social Development During the 13th Five-Year Plan Period and 13th Five-Year Plan’s Table of Contents.