China produced more than 70% of the world's tungsten, was the largest producer and exporter of rare earths, the largest producer of cement, tin and, steel, and a world leader in the production of antimony. Intensive geologic exploration has yielded greatly expanded mineral reserves. This increase in known subsurface resources was reflected in production rises for China's most important mineral products—coal, petroleum, iron ore, copper, lead, zinc, tungsten, mercury, antimony, tin, molybdenum, barite, fluorspar, magnesite, and rare earths. In 2000, China produced a total of 7.51 million tons of 10 nonferrous metals, 14.6% more than in 1999; production in all 10 metals increased. The production of iron and steel was China's leading industry in 2002, coal production ranked second, and petroleum, cement, and chemical fertilizers were among the top eight. Mineral fuels ranked fifth among export commodities. GDP grew by 8% in 2000 and 7.1% in 1999, due mainly to a strong turnaround of exports.
Iron ore production in 2000 (gross weight) was 224 million tons, down from 268 million in 1997. Virtually all iron mining was carried out north of the Yangtze River, and the country's total resources totaled 55,000 million tons, the largest reserves being in Liaoning, Hebei, and Sichuan. The largest producers— Anshan Mining Co. (in Liaoning, Anshan) and Shoudu (Capital) Mining Co. (Beijing)—had annual capacities of 30 million tons and 20 million tons, respectively. As domestic iron deposits were of a low ore grade (less than 35% on the average) and required concentration, China has imported more than 50 million tons of ore in the past several years, and steel enterprises continued to look for joint-venture possibilities for iron mines in other countries. Officials from Heilongjiang Province and the Jewish Autonomous Republic of Russia discussed developing the Kimkan iron ore deposit (Khabarovsk, Russia), whose reserves totaled 189 million tons.
Tungsten output in 2000, mainly from Jiangxi, was 37,000 tons (metal content), up from 31,100 in 1999 and 25,000 in 1997; 9,276 tons of tungstates were exported, worth $43.8 million. China National Nonferrous Metals Industry Corp. had a capacity of 60,000 tons per year in Guangdong, Guangxi, Hunan, Jiangxi, and Zhejiang. China's output had a major influence on world prices and, in an effort to control production and exports, the government forced major producers to reduce output, closed 145 illegal mines in 1999 and 2000, and decreased the export quota in 2000 to 17,000 tons. The government approved the export of tungsten by 13 companies, six producers, and seven trading companies in 2001.
Copper output (metal content) was 590,000 tons, up from 520,000 in 1999, 487,000 in 1998, and 439,000 in 1996. Because domestic concentrates supplied one-half of the country's rising demand and 40% of smelters' needs, China imported 1.8 million tons of concentrates in 2000, 45% more than in 1999. Three major copper mining development projects would add 100,000 tons of output capacity by 2003. The Ministry of Land Resources announced the discovery of a large porphyry copper deposit in eastern Tianshan (southwest of Hami City, in Xinjiang Uygur Autonomous Region) that contained 10 million tons of copper ore (0.5%–1.5% copper), 3,000 tons of silver, 100 tons of gold, and a significant amount of molybdenum. Also in Xinjiang Uygur, near Habahe, the government approved the construction of the Ashel Copper Mine; the mine, which also contained iron and zinc, planned to produce 2,000–3,000 tons per day of ore and concentrates that contained 25% copper and 53% zinc for the duration of its projected 38-year life. The Xitieshan Mining Bureau, renamed Western Mining Co. Ltd., had a lead and zinc mining capacity of 1 million tons per year (Qinghai Province), and was approved to develop the Saishitang Copper Mine, northwest of Xining, and China's largest undeveloped copper deposit, Yulong (6.5 million tons reserves), in Xizang Autonomous Region. Jiangxi Copper Co. Ltd. planned to expand one mine, acquired another, and bought the exploitation rights to a third.
Other metallic ore outputs were: tin (chiefly in Yunnan), 97,000 tons, up from 80,100 in 1999 and 67,500 in 1997; antimony (from Guangxi, Guizhou, and Hunan), 98,700 tons, down from 131,000 in 1997; bauxite (gross weight), 9 million tons, up from 6.2 million tons in 1996; lead (metal content), 570,000 tons, down from 712,000 in 1997; molybdenum, 28,900 tons; mercury, 200 tons, down from 830 in 1997; and zinc, 1.7 million tons, up from 1.27 in 1998. China also mined alumina, bismuth, cobalt, gallium, germanium, gold, indium, manganese, nickel, platinum-group metals, silver, uranium, and vanadium. Pingguo Aluminum Co. received approval for its expansion plans, which would increase output capacities to 700,000 tons per year of alumina in 2005 (from 400,000); 2.4 million tons per year of bauxite; 100,000 tons per year of nonmetallurgical grade alumina; 300,000 tons per year of aluminum; and 50,000 tons per year of graphite block. Henan geologists discovered a bauxite deposit in western Hunan Province that could contain reserves of 50 million tons and a significant amount of gallium. Another bauxite discovery, in Jingxi County, Guangxi Province, could contain reserves of 82 million tons (37 million tons of which could be economically developed), 100,00 tons of gallium, and a significant amount of niobium, scandium, and titanium.
The government planned to reform the gold sector by easing restrictions on foreign investment and establishing a gold exchange market by 2002. Domestic producers were required to sell all their gold to the Central Bank at a fixed price; the bank would gradually withdraw from its gold monopoly position. The establishment of gold mining companies that were wholly owned by foreign investors was not permitted. A joint exploration and development agreement was signed to explore for gold and silver in the Hulunbeier League; the Canadian partner in the agreement, Naneco Minerals Ltd., had to provide the capital for further exploration and development of the Errentouligai gold and sivler deposit, near the Jiawula polymetallic deposit. Alaskan Exploration Corp., a subsidiary of Vega-Atlantic Corp., of Germany, and Yunnan Northeast Silver Industry Co. Ltd., formed a joint venture to develop the Luomachang silver mine, in Yunnan Province; the mine, which had operated for three years, at a capacity of 17 tons per year, had reserves of 9 million tons at a grade of 221.9 grams per ton of silver.
The output of rare-earth oxide content—60% from Nei Mongol, 18% from Sichuan, and 17%, Jiangxi—was 73,000 tons in 2000, up from 60,000 in 1998; more than two-thirds was exported, the major destinations being France, Japan, and the United States. In Nei Mongol, rare-earth concentrate, known as Baotou rare-earth concentrate, was the byproduct of producing iron concentrates, and contained oxides of the light rare-earth group—lanthanum, cerium, praseodymium, neodymium, samarium, europium, and gadolinium. In Mianning and Dechang (Sichuan), rare earths were mainly bastnasite, and, in Ganzhou (Jiangxi), the rare earths were of the ionic absorption type. A joint venture in Jiangsu province was to produce vanillin. The largest producers—Gansu Rare Earths Co. (in Jiangxi, Nanchang) and Baotou Iron and Steel and Rare Earths Corp. (in Nei Mongol, Baotou)—had capacities of 32,000 and 25,000 tons, respectively. China's rare-earth processing capacity expanded from 50,000 tons per year in 1995 to 130,000 tons per year in 2000. Rare earths remained a highly controlled sector, and a rare-earth quota was introduced in 1999 to control exports. China also produced 65,000 tons of rare-earth products (46,700 exported), including 32,000 tons of high-purity individual rare-earth oxide.
Hydraulic cement production was 583.2 million tons, up from 511.7 million tons in 1997 and 491.2 million tons in 1996, although many of the manufacturing plants were old and inefficient; export of 6.06 million tons earned $190 million. Other industrial mineral production included fluorspar, 2.45 million tons (1.2 million tons exported, for $117.9 million); barite (from Guizhou, Xiangshou), 3.5 million tons (2.52 million tons of barium sulfate was exported, worth $79.4 million); magnesite, 2.5 million tons (2.04 million tons exported, worth $266.4 million); gypsum, 6.8 million tons, down from 9.1 million tons in 1997; graphite, 400,000 tons, up from 300,000 in 1999 and 185,000 in 1996 (333,460 tons exported, for $51 million); talc and related materials, 3.5 million tons, down from 3.9 million tons in 1999 (710,000 tons exported, for $58.5 million); mine boron (boron oxide equivalent), 100,000 tons, down from 137,000 in 1998 and 157,000 in 1996; asbestos, 245,000 tons; and bromine, 42,000 tons. China also produced diamond, diatomite, dolomite, kyanite and related materials, lithium minerals, nitrogen, phosphate rock and apatite, potash, salt, sodium compounds, and sulfur.
The government in 2000 approved the opening of a diamond exchange market in Shanghai. China in 2000 became the world's eighth-largest consumer of precious stones (actual figures were difficult to ascertain because of smuggling and overseas purchases), and "Great China," which included Hong Kong and Taiwan, was believed to be the world's third-largest diamond market, after the United States and Japan.
In 2000, the government issued several laws and regulations to improve the country's investment environment and foreign investors' confidence. The laws and regulations dealt with, among other things, mineral resource exploitation planning, land exploitation, mine ownership transfer, customs law, gold mining, Sino-foreign contractural joint ventures, foreign capital enterprises, and mineral-resource deposit size classification standards. The government continued its efforts to restructure the mining and metal sectors, abolishing nine bureaus, transferring responsibilities to industrial associations, dissolving three state-owned nonferrous enterprises, and, to help the industry become more efficient, ceding management to provincial and city governments. The government also offered incentives to companies—exemption from income tax, tariffs, and import value-added tax (VAT)—to invest in the poorer western provinces. It also began to phase out the preferential taxes for foreign enterprises, prepared to draft a "zero tariff rate" policy for exports, issued guidelines to allow foreign enterprises to conduct mineral exploration in China, and agreed to eliminate import quotas and dismantle export subsidies. China planned to increase production of cement, copper, fertilizer, iron, lead, nickel, salt, soda ash, and zinc, and expected to retain its dominance in the world market for antimony, barite, fluorspar, magnesite, rare earths, and tungsten.
The iron and steel trade was valued at $14.1 billion, out of 2000's trade total of $474.3 billion; nonferrous metals at $10.1 billion; and nonmetallic minerals at $7.1 billion. Exports of cement, copper products, coal, coke, steel products, and zinc and its products rose by more than 10%. Export duties for unwrought antimony declined from 20% to 5%; and unwrought zinc, 25% to 0%. The government decided in 2000 to provide a full VAT rebate for 80,000 tons of copper concentrates and 200,000 tons of copper anode for three years.