Mining market in China

• China has over 1,500 major mining operations
• Approximately 75% of all major Chinese mining operations are underground
• China's mining industry produces over USD 400 billion/year
• In 2020, the national resources tax revenues totaled USD 27 billion (RMB 175.5 billion), accounting for 1.1% of the national tax revenues
• China spends approximately USD 200 billion/year on mine supply and services

In the past decade, the Chinese government has issued a series of policies and incentives to promote green mines construction. By 2021, 1,254 mining companies have been listed on the national green mine directory.

With almost 40,000 mines in China, the green mining market represents great opportunities for Canadian mining and services companies.

71 demonstration projects on intelligent mines have been identified nationwide. The market size for coal mine stock processing alone can reach trillions of RMB, of which the intelligent equipment market is about RMB 800 billion, and the infrastructure and integrated platform market related to intelligent development is about RMB 200 billion.

As the non-coal sector continues to expand, China's green mining industry is expected to grow by 30%-50% in the next 20 years.

Key opportunities for Canadian mining companies in China:

• Deep mining (>1,500 meters) technology - Chinese mining companies are interested in technology that could deal with accidents in deep mining operations due to rock bursts, gas outbursts, high in situ and high temperature, etc.
• Water and soil remediation - China continues to aggressively move forward in its commitment to environmental protection and remediation. Thus, Canadian expertise in soil (especially heavy metal contaminated soil) and waste water treatment solutions have significant potential to strike new partnerships in the China's mining sector.
• Energy saving and emission reduction technology and products: e.g. alternatives to cyanide for gold extraction - Due to environmental and safety concerns, Chinese gold mining companies are seeking for cost-effective cyanide-free gold recovery alternatives.
• Local context - China's culture and business practices differ from Canada's. As you start or expand your business in China, understanding Chinese business etiquette and local customs is important to your success.
• Intellectual property - Every firm should implement a strategy to protect their intellectual property rights in China, and that starts with registering IP: patents, trademarks and copyrights.
• Due diligence - For Canadian companies looking to do business in China, no matter the business model, whether through trading, investment or joint research, the key is to find the right partner. Due diligence is a prerequisite for any transaction with Chinese parties.

Notable challenges for Canadian mining companies in China:

• Local context - China's culture and business practices differ from Canada's. As you start or expand your business in China, understanding Chinese business etiquette and local customs is important to your success.
• Intellectual property - Every firm should implement a strategy to protect their intellectual property rights in China, and that starts with registering IP: patents, trademarks and copyrights.
• Due diligence - For Canadian companies looking to do business in China, no matter the business model, whether through trading, investment or joint research, the key is to find the right partner. Due diligence is a prerequisite for any transaction with Chinese parties.

China business landscape:

China's mining industry is enormous. It is the world's leading producer, often by a large margin, of more than 20 metals, including aluminum, cement, coal, gold, graphite, iron and steel lead, magnesium, rare earths, and zinc.

The United States Geological Survey estimates China has accounted for 40-50% of global demand for minerals over the past 3 decades.

While large amounts of minerals are imported into China, domestic production makes up a good portion of supply for almost all commodities.

Summary

China is an attractive market for foreign products and services that can help the local industry reach the dual carbon target. Canadian mining supply and service (MSS) firms are already having success in the market, but there is significant scope for growth.

Given the scale of China's mining industry and the push toward green and intelligent mining, Canada's MSS sector is well positioned to provide the services and expertise needed by focusing on a smaller segment which will allow for more targeted strategies.

For more information on mining in the Chinese market please contact bejingtdinfocentre@international.gc.ca.