Chinese get close look at Canadian mining

A small delegation of Chinese high-level officials recently toured Canada, talking to government and mining people and visiting a few operating mine sites. What most impressed the visitors, the leader of the delegation told The Northern Miner in a Toronto interview, was the underground mining, its management and high efficiency.

“You have good equipment, appropriate methodology and the technicians are all relatively highly qualified,” Xu Da Quan, vice-minister of the Ministry of Metallurgical Industry and president of the State Gold Bureau of China, said through an interpreter.

What the group was unable to see firsthand, in part because of time restraints, was a mining operation featuring geology similar to the “fractured” zones of Chinese mines in the Shandong Peninsula region in the country’s northeast, the most popular gold-mining area.

The delegation, which arrived March 21 and departed 10 days later, visited the Nickel Plate mine of Corona Corp. (TSE) in British Columbia, and a number of operations in the Timmins, Ont., area, including the Dome mine of Placer Dome (TSE), the Hoyle Pond mine of Falconbridge Gold (TSE) and the operations of Giant Yellowknife Mines (TSE). A trip to the Hemlo gold camp north of Lake Superior was postponed because of the weather.

Discussions took place with government officials in both British Columbia and Ontario, and with manufacturers of mining equipment and representatives of engineering services companies. The delegates also toured the Vancouver and Toronto stock exchanges.

Xu (prounced “shoe”), a graduate mining engineer, said a priority of his State Gold Bureau, charged with the task of formulating policy for development of the nation’s gold-mining industry, is to expand the country’s gold production. The bureau’s goal is to double production and revenues within the next five years.

While he would give no specific figures, Xu said Chinese production during the last few years has increased by more than 10% annually. (Investment dealer Shearson Lehman Hutton reports China turned out an estimated 60 tonnes of the yellow metal in 1987.)

Average size of the country’s 600-700 gold mining operations is about 500 tonnes per day, Xu said, with the largest mine processing about 1,000 tonnes per day of material grading 6 g per tonne (0.175 oz per ton). Known reserves throughout the country carry grades from 3 g (0.086 oz) on up to 20 g (0.58 oz).

The gold mining industry in China employs an estimated 300,000 people, he said. Most of the gold mining there is of the narrow vein variety, and more than 80% of the mines are underground operations.

While on the lookout for new equipment used to extract and transport ore to the surface, the Chinese also expressed interest in milling techniques, particularly developments in the modernization of cyanidation. The country’s first carbon-in-pulp mill was only recently installed.

Also of interest is heap leach technology, a subject about which the delegation should learn more as it tours mining operations in the relatively warmer climes of the United States and Australia before heading home.

Smuggling of gold inside his country is a serious problem, Xu said. The government is the principal mining producer, but there are other, smaller producers, including mines operated by provincial and municipal corporations, rural co-operatives, metal mines where the gold is produced as a byproduct, and placer operations which are generally run by rural and farming groups.

All gold produced in the country is supposed to be sold to the Bank of China, at a domestic price which is lower than the world price.

“Because of the smuggling, we have passed a law to eliminate those individual operations in China,” Xu said of the legislation which came into effect last November.

While purchasing mining equipment from Canadian and other manufacturers is not a problem for the Chinese, acquiring spare parts is. With that in mind, negotiations are under way with Canadian companies to build manufacturing plants in China.

Direct foreign involvement in gold mining and production has not been allowed by China in the past, but that situation may be changing. Xu said Corona has suggested a possible joint venture operation involving opening new mines in Canada, China or a Third World country. (Late last year, Galactic Resources and Can-Pacific Rare Earths announced their own exploration plans for China.)

Hosting the delegation’s visit was the Canadian government, in particular External Affairs and Energy, Mines and Resources, under the aegis of the Canada-China Working Group on Ferrous Minerals and Metals.

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