MAC: Mines and Communities

China Update

Published by MAC on 2006-09-29

China Update

29th September 2006

Once again this week our focus is on China's involvement with the rest of the world - which pretty much means all of us.

* The country's largest titanium sponge producer, Zunyi Ti has been found guility of a chlorine gas leak which sent 158 people to hospital in early September. The company sells not only within China but also exports to the US, Japan and Europe.

* Chalco (the country's biggest aluminium producer) and state-owned Minmetals have been in talks with "Toxic Bob" Friedland's Ivanhoe Mines, aimed at securing 90% of copper concentrate from its prospective Oyu Tolgoi mine in Mongolia.

* Jiangxi Copper Corp also says its "developing" a small copper mine in Canada with a domestic company - but hasn't told us who it is.

* BHPBilliton and the Chinese Ministry of Land and Resources have been head-to-head discussing closer collaboration. The ministry says it wants to open up the country further to foreign companies. Chip Goodyear of BHPBilliton says he's happy to oblige, although the company hasn't yet discovered a major iron ore deposit to suit its own purposes

* - Nor has Brazil's CVRD as yet, but it's making its first investment in the country's steel industry

* Official figures on aluminium trades show that, in the first six months of this year, the country exported more than double what it imported (590,000 tonnes against 230,000 tes).

So why is China both sending out and bringing in? Most of its exports are unfinished aluminium , while most of its imports consist of scrap, alumina and bauxite.

From where does it buy- and to whom does it sell? Just about everyone . The Dutch buy, the US buys; Australia sells, India sells - even the Philippines makes a modest picking.

These days it seems we're all on a fast boat to (and from) China.

[Information for this summary comes from Interfax China, September 23-29 2006].

CVRD Goes To China

R.M. Schneiderman, Forbes Magazine

29th September 2006

Shares of Companhia Vale do Rio Doce rose during Friday trading, after the Brazilian mining giant said that it's making its first investment in iron ore in China.

CVRD said Thursday that it will invest $4 million and receive a 25% stake in Zhuhai YPM, the owner of a new iron ore pelletizing plant in Zhuhai, Guangdong, China. CVRD will make the investment through its subsidiary, Mineracoes Brasileiras Reunidas.

The other partners in the joint venture are Zhuhai Yueyufeng Iron and Steel with a 40% stake, and Pioneer Iron & Steel Group with a 35% stake. When the plant begins production, likely in 2008, CVRD will supply at least 70% of its iron ore over the next thirty years.

In a press release, the company said the move "illustrates CVRD's strategy to support the development of the steel industry, especially in the field of palletizing in which CVRD is already a market leader." In Friday trading, shares of CVRD rose 23 cents to $21.56.

Group Monitors China's Water Polluters Using Online Mapping

Ke Zhang , China Watch (Worldwatch)

26th September 2006

On September 14, a Beijing-based environmental organization began operating China’s first public database of nationwide water pollution. The so-called China Water Pollution Map enables users to survey water quality, monitor pollution discharges, and track pollution sources using digital mapping. Data are available for 2004, 2005, and 2006 and are taken mainly from the 2004 China Environmental Statistics Communiqués and from regional bulletins on environmental and water quality.

Ma Jun, director of the nongovernmental Institute of Public & Environmental Affairs, which is building the database, says the main goal of the mapping is to expose the worst polluting businesses and to push them to shoulder their environmental responsibilities. Ma is the author of China’s Water Crisis, a 1999 book that has been likened to Rachel Carson’s Silent Spring in terms of its impact in awakening the Chinese public to environmental concerns. A former investigative journalist, he is an expert in water pollution issues and was featured in the 2006 edition of Time Magazine’s “100 Most Influential People.”

Ma believes that water pollution is one of China’s most serious environmental concerns. Statistics reveal that more than 70 percent of all rivers and lakes in the country have been polluted, and more than half of urban groundwater is contaminated. According to China’s top environmental authorities, one water pollution incident takes place every two to three days, on average. The high frequency of such accidents is attributed in part to the nation’s poor industrial layout. Of the more than 20,000 petrochemical enterprises nationwide, 14,000 are located along the Yangtze and Yellow Rivers (China’s two major east-west water arteries), and 2,000 are situated at drinking water sources and in highly populated regions.

Ma Jun believes that to control water pollution, China must strengthen its law enforcement. But doing so will require breaking the existing links between special interests, he notes. The government will also need to allow for broader public participation and to make environmental information available to the public. Constructing the new water pollution database is an important first step toward greater transparency of information, Ma says.

The database currently lists more than 2,500 polluting enterprises, including many influential ones. For Beijing, for example, the category “who’s poisoning our hometown rivers” lists several prominent local enterprises, including Beijing Guixianghe Soybean Industry Corporation and Beijing Automobile Works Co. Ltd.

The database also tracks sewage treatment facilities, which have been pervasively dysfunctional across the country. The list of “factories that fail to meet the standards for water quality” includes treatment plants in Yinchuan and Guyuan cities.

The map is far from complete in its coverage, Ma admits, explaining that the next step will be to collect more regional water pollution information, to locate polluters, and to enter them onto the digital map.

His organization will work with other environmental groups in China to carry out field investigations and to monitor water quality as well as pollution sources and discharges.

Ke Zhang is a senior journalist with China Business Network Daily.


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