Top Biz News

New rules to make gold shinier industry

By Gong Zhengzheng (China Daily)
Updated: 2006-11-30 08:56

China, the world's fourth-biggest gold producer, will raise the threshold for foreign investors in the gold mining sector to improve the sustainability of the industry, a regulator said.

According to a source from the National Development and Reform Commission (NDRC), China will impose restrictions on small foreign investors in the sector while welcoming larger ones. The source declined to reveal what measures will be taken, only saying an announcement would be made before the end of the year.

The regulator also declined to define "small" versus "large" investors.

"The sector doesn't need many small foreign investors as there have been a large number of small Chinese gold miners," the source said on condition of anonymity. "The new policy is designed to improve the quality of foreign investment to ensure sustainable development of the sector."

There are more than 100 foreign companies investing in China's gold mining sector, according to industry data. However, most of them are small, meaning they often withdraw quickly after making a profit.

Cui Lin, a gold analyst with Antaike Information Development Co Ltd, said many small foreign companies invested in gold prospecting in China. But they sold high-grade resources to big investors and stopped prospecting, leaving low-grade gold ore unused.

"This has generated immense waste of precious gold resources, which is harmful to the sector's sustainable development," Cui said.

There are 4,134 tons of found gold reserves in China, ranking it No 8 in the world. However, more than 1,000 tons are low-grade and hard to smelt.