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China's miners need more leeway, Zijin's Chen says
September 23, 2017 / 12:30 PM / in 2 months

China's miners need more leeway, Zijin's Chen says

TIANJIN, China (Reuters) - China’s mining industry will shrink if the government does not cut it some slack in return for compliance with strict environmental policies, the head of one of the country’s largest gold miners said on Saturday.

“We don’t have friendly policies in this industry,” Chen Jinghe, chairman of Zijin Mining Group Co (601899.SS), said during a session at the China Mining conference in Tianjin.

He described mining as “risky, harsh and the least profitable industry”, and said China’s mining laws and regulations were “no longer compatible with the new economic and market environment”.

Chen added that he expects the authorities to address the mining industry’s difficulties by revising laws and regulations, including by streamlining processes for issuing and transferring mining permits.

While setting “stringent requirements” for safety and environmental protection, which Chen said miners should approach in a self-disciplined way, the government should give “more leeway for the mining companies in other areas”.

In a mostly off-topic speech that sharply contrasted with the presentations from of fellow panelists, Chen said his own company, which also produces zinc and copper, had “learned very severe lessons” from China’s environmental regulations.

He did not elaborate but Zijin suffered a toxic spill at a copper-processing plant in Fujian province in 2010.

Environmental inspections have this year reached their most severe stage in history, Antaike, the research arm of the China Nonferrous Metals Industry Association, said in a report earlier this month. Both mines and smelters have faced closures.

Li Tong, CEO of BOC International, an investment banking arm of Bank of China (601988.SS), said in the same session that “increasingly strict environmental protection is having a major impact on the mining industry layout, thus accentuating survival of the fittest [and] accelerating low-end capacity elimination.”

Chen welcomed closer engagement from the government with mining companies so that it could better understand the industry. At the moment, the government is reluctant to get too close to the miners for fear of being criticised, he added.

Industry associations could play a very important role in this regard, said Chen, who is also a president of the China Mining Association and vice president of the China Gold Association.

Reporting by Tom Daly; editing by Mark Heinrich

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