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China is rich
in mineral resources, and all of the world's known minerals can
be found here. To date, geologists have confirmed reserves of
158 different minerals. These include 10 energy-related minerals,
including oil, natural gas, coal, and uranium; 54 metallic minerals,
including iron, manganese, copper, aluminum, lead and zinc; 91
non-metallic minerals, including graphite, phosphorus, sulfur
and sylvite. The reserves of the major mineral resources, such
as coal, iron, copper, aluminum, stibium, molybdenum, manganese,
tin, lead, zinc and mercury, are in the world's front rank. China's
basic coal reserves total 331.76 billion tons, mainly distributed
in northeast China and north China, with Xinjiang Uygur Autonomous
Region, Shanxi Province and the Inner Mongolia Autonomous Region
taking the lead. China's 21.36 billion tons of the basic reserves
of iron ore are mainly distributed in northeast, north and southwest
China. The country also abounds in petroleum, natural gas, oil
shale, phosphorus and sulphur. Petroleum reserves are mainly found
in the northwest, northeast and north China, as well as in the
continental shelves of east China. The national reserves of rare
earth metals far exceed the combined total for the rest of the
world.
However, in line with China's accession to the WTO, open door
policy and break-neck growth and infrastructure development, the
one commodity that is in the spot light is iron ore, the basic
material of steel. Steel means building, and there is a lot of
that going on in China. Yet even with such vast reserves, China
cannot keep up with demand, and must import vast amounts of iron
ore to feed the ever expanding steel industry. Even in the face
of government regulation, steel production is at an all-time high.
Obviously
Steel is not the only material required by China, and anyone able
to find reliable offshore supplies of Copper, Zinc, Urea, Tantalite
and, for example, Scrap Metal to feed China's insatiable demand
can do very well financially. The key word here, however, is "reliability".
The days of mutual distrust between Chinese buyers and overseas
suppliers is drawing to an end as China's purchasing power becomes
felt on the international stage, and its banking sector becomes
more sophisticated. China also supplies raw materials to other
parts of the booming world, namely the Middle East. At the top
of that list is Cement, and Clinker, which is shipped from North
Chinese ports to far-reaching destinations like The D.R. of Congo,
South Africa, Dubai, Iran and Egypt.
Face to face relationships are very important in China, as most
everyone knows, so it is essential to have people on the ground
who can take care of one's interests. The need for reliability
goes both ways.
China has
a long way to go before its internal demand for raw minerals and
metals abates since its infrastructure keeps expanding and being
developed. By some estimates, 300 million people will migrate
from the countryside to China's second and third-tier cities by
2020. And that will push along a construction industry that is
already the strongest in the world. The need for iron ore and
other mineral imports will not go away for years to come.
Contributed
by Anthony Robinson, Managing Director, BiField Business Resources,
Ltd., Shanghai. BiField provides market overview and market entry
strategy services to an international clientele from its Shanghai
base, as well as identifying reliable offshore suppliers of minerals
and metals for China's industrial consumption - we both trade
and source. Please visit www.bifield.com
for more information.
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