Foreign mining investment in China tops $175 billion

spur-ventures.jpgIntierra Resource Intelligence has released updated figures on foreign mining investment levels in China. The Intierra mining database identified that more than 60 companies with primary listings outside of China and Hong Kong have a direct market interest in quoted mineral resources in China. Foreign investments make up approximately $175 billion worth of total Chinese resources at today’s commodity prices. Intierra’s Managing Director, Peter Rossdeutscher, said: “Foreign investment in the Chinese mining sector is an evolving practice. Today, the major foreign investments are in phosphate, gold, coal and silver, but over time as more outside money flows into the market, those commodity rankings will likely alter.”

Companies listed on the TSX/TSX-V have $121 billion worth of quoted mineral resources in China, of which the TSX-V market attracts $14 billion. TSX-listed Spur Ventures for example, owns 80% of the 75 Mt Yichang phosphate project in the Hubei Province, which is scheduled to come online in 2013.

Companies listed in the US invested approximately $21 billion. US-listed coal companies are very active in production, with current output of over 2.2 Mt/y from Chinese operations. Some of these companies include SGB International (Quanzhou City), U.S. China Mining Group (California), China Energy Corporation (Hohhot City) and China Natural Resources (Hong Kong).

Australian company Dragon Mountain Gold is one of the most active ASX companies in China, with an 87% interest in the 4.3 Moz Lixian Gold Project, where mineralisation remains open at depths beyond 250 m. Whilst London-listed Griffin Mining has a 60% interest in the Caijiang zinc/gold mine, which made the company a profit after tax of $8.8 million in 2010.

Rossdeutscher summarised the ongoing opportunity for foreign firms: “Naturally there are challenges for exploration and mining companies looking to invest in China, but the potential investment rewards for those who get it right can be significant.”