It is difficult to overstate the importance of China to the future of the world's mining and metals industries. China's energy and mineral consumption accounts for 15% of world consumption, second only to that of the United States. China is already a key factor in world metals and minerals and is set to become of still greater importance in the future, whether as a buyer or a seller. The government of China appears to be embarked on a program to stem the uncontrolled growth of its mining and metallurgical sectors and to force them to conform closer to international standards.

Market overview

In a remarkably short time, China has risen to become the world's largest producers and consumers of steel and it is the second largest consumer of non-ferrous metals such as copper and aluminum. It is currently the world's largest buyer of copper on international markets, the second largest buyer of iron ore, and the third largest buyer of aluminum. At the same time, it is one of the world's largest producers and exporters of tin, lead, zinc, magnesium and a host of minor metals and industrial minerals, as well as a fast-growing exporter of coal.

Opportunity for Canadian Mining Business

China imported $5.8 billion CAD in Canadian resources products in 2008, including more than $2.2 billion in mineral and metal commodities. By 2009, Chinese investment in Canada had exceeded Canadian investment in China by a large margin, and this trend will only continue in the years to come. Canadian resource companies stand to be the major beneficiaries of such increased Chinese investment. Chinese investment in Canada takes various forms, from private investment in public equity to hostile or friendly takeover, earn-in arrangement, or asset purchases and direct acquisition of exploration or mining permits. Most Chinese companies are likely becoming comfortable with non-controlling stakes.