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Get ready for Shandong's gold rush

Editor: Li Kun 丨CCTV.com

12-03-2015 18:10 BJT

By Tom McGregor, CNTV Commentator

Maybe all that glitters is not gold, but in Eastern China's Yantai City, northeast China's Shandong Province, geologists have uncovered massive reserves of the precious metal underground. Such a find could make prospectors wealthy, but they need a daring spirit, since excavation costs are expected to be higher than normal.

ECNS (English-language China News Service) reports that last week a deposit containing 328-tons/gold was found in Laizhou District, Yantai, marking it the 31st gold mine discovered in the vicinity this year.

Furthermore two weeks ago, the Shandong Provincial No. 3 Institute of Geological & Minerals Surveying had found another gold mine - 470-tons of reserves - 2-km. under north coastal waters near Sanshan Islands in Bohai Bay.

Lucky find, but good luck digging it

Uncovering huge gold reserves in Shandong may offer plenty of riches, but excavations may prove difficult, since mining equipment available in China could not meet the task.

"The cost of shallow mining is lower, the deeper the mining, the higher the costs," said an official at the Yantai Bureau of Land & Resources. "Actual mining is related to the international gold price, the amount of investment and the maturity of mining technology."

The official added, "The depth of gold mining in our country is no more than 1.5-km., but some of the mines found in Yantai are more than 2-km. deep and cannot be excavated currently."

Yet with challenges come opportunities, which is the mindset of Zhang Junjin, a gold mining project manager.

"The discovery of gold deposits lying 2,000-meters under the ocean floor provides incentive for new drilling technology for future gold mining," he said.

As of 2012, geologists have estimated deposits of Chinese gold have reached 8,196.24-tons.

World's top gold producer

Despite such challenges, China ranks number one for the past seven consecutive years as the world's leading gold producer. Chinese companies remain relentless in search of gold and willing to pay extra costs and invent new machinery to dig it out.

Marine prospecting adds greater complications, but global partnerships could play a pivotal role. Beijing and Delhi are in talks to coordinate on deep seabed mining in the Indian Ocean. Both countries are the two world’s largest gold consumers, so they have extra motivation to work together.

Chinese firms can develop new technologies and skills when heading back to Shandong for marine prospecting in Bohai Bay. Meanwhile, geologists have conducted 3-years of surveying off the Chinese coast, which have involved 120-km. of drilling with 67 platforms that employed more than 1,000 drillers and geologists.

SGE secures China's gold

China's gold markets remain lucrative for miners, although international prices have been slipping lately. Perhaps with lower profit margins, Chinese gold prospectors may consider different careers, but the Shanghai Gold Exchange (SGE) can keep them in business.

"The SGE is a physical market with no paper contracts," Terry Hanlon, president of Dallas-based Dillon Cage Metals, told TopWireNews. "By law, all mined and imported gold in China must sell through SGE."

Whereas on the Chicago Mercantile Exchange and London Gold Exchange, gold dealers are required to make paper transactions, such as Futures Contracts, in China a dealer with gold-on-hand can receive immediate cash for the exchange. That makes life much easier for Shandong miners.

Shandong's gold rush benefits China

Chinese President Xi Jinping has endorsed economic structural reforms that encourage more ‘Made in China’ technological innovations.

Digging for gold in Shandong may seem impossible for the time being, but new mining technology introduced through R&D (research and development) efforts could help prospectors find their pot of gold.

Tmcgregorchina@yahoo.com

 

( The opinions expressed here do not necessarily reflect the opinions of Panview or CCTV.com. )

 

 

Panview offers a new window of understanding the world as well as China through the views, opinions, and analysis of experts. We also welcome outside submissions, so feel free to send in your own editorials to "globalopinion@vip.cntv.cn" for consideration.

Panview offers an alternative angle on China and the rest of the world through the analyses and opinions of experts. We also welcome outside submissions, so feel free to send in your own editorials to "globalopinion@vip.cntv.cn" for consideration.


 

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