Over 8,000 illegal mining projects have been shut-down by the end of September in a bid to reform China's mining industry and optimize the utilization of mineral resources, Vice Minister Wang Min of Land and Resources said in Beijing on Tuesday.

He warned at the 2006 China International Mining Conference that clamping down on illegal mines, either unlicensed or conducting unauthorized prospecting and exploitation, would continue to top the agenda of the ministry in years to come.

Wang said that the utilization of mineral resources in China was "getting better" as the year's crackdown campaign had been significant deterrent.

The ministry has so far discovered 65,313 unlicensed mines, 4,509 illegal excavations, 960 unauthorized prospects and 1,365 illegal transfers of mining rights.

A regulation issued earlier this year stipulates that mine developers are liable to secure the rational utilization of mineral resources, treat damaged environment and meet safety production standards.

Mine developers will have to submit what authorities called "environment treatment rehabilitation and treatment reserve" in proportion to their sales revenue.

The specific ratio and other relevant measures are under discussion by the Ministries of Finance, Land and Resources and State Administration of Environmental Protection.

China is the world's largest producer of coal, steel, copper, aluminum and cement. Last year it produced seven billion tons of mineral ore and generated an aggregated production value of 1.48 trillion yuan.

Over the first nine months the production of raw coal, coke, iron ore, non-ferrous metals, phosphorite and cement all registered double digit growth with iron ore growing by the most at 37.7 percent.

China, over the same period, exported 48.07 million tons of coal and imported 109 million tons of crude oil and 247 million tons of iron ore. Last year the import and export volume of mineral products hit 307.5 billion U.S. dollars. This is about 21 percent of the country’s total foreign trade.

"The mining industry, spurred by the robust demand and production capacity, is emerging as a crucial engine of China's sizzling economic growth," Wang said. He observed that only one third of the country's mineral reserves had been proven. 

Vast areas of land in central and western China were to prospected while the exploitation in most of the mines in the eastern region was only conducted at a level about three to five hundred meters below ground, he said.

To optimize the utilization of mineral resources Wang said mergers and acquisitions were "encouraged" citing that the number of collieries and bauxite mines in central China's Henan Province had dropped 62 percent and 64 percent respectively this year.

He reiterated China's policy of opening up the mining industry to foreign investors revealing that Yunnan, Inner Mongolia, Xinjiang, Sichuan, Gansu and Qinghai appeared to be most appealing to overseas investors.

In the Tarim Basin, for instance, nine oil blocks have been open to foreign investors. So far French-based Total Petroleum, the Dutch Shell International and UK-headquartered BG Group have signed joint deals with China.

Wang said China would encourage foreign investors to the mining sector to facilitate the trade of mineral products and services and use the experiences and advanced technology from overseas.

"But the liabilities of environmental protection and rational utilization of mineral resources should never be ignored," he said.

China's central government has planned to channel 753 million yuan this year to environmental treatment of abandoned mines. This is 300 million yuan more than last year.

(Xinhua News Agency November 15, 2006)