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China Will Tap Copper Reserves In Eastern Tibet
Wall Street Journal
December 6, 2006
BEIJING -- As China's demand for copper soars, it is preparing to tap
reserves in a remote area of Tibet previously considered too
inaccessible to develop.
Deposits in the Tibet Autonomous Region, close to the Himalayas, contain
more than one-tenth of China's reserves of the metal, a crucial
ingredient in the country's development and industrialization.
The opening of the Qinghai-Tibet railway this past summer will lower the
cost of transportation and assist in the development of the reserves,
including the Yulong project, projected to be China's biggest copper
mine and the second-largest in Asia after Freeport McMoRan Copper & Gold
Inc.'s Grasberg mine in Indonesia.
"The Yulong copper mine will be an important supply source for China if
it can get up and running," said Wan Ling, a senior analyst at China
state-owned research firm Antaike. "And it won't necessarily stop there
-- technology has improved, investment in mining exploration is
increasing, and it's likely we'll see more copper operations developed
in Tibet."
Since 2000, China has accounted for about 65% of the world's growth in
copper consumption, using the metal to produce cable, wire and
electrical products for its electrical and building industries, as well
as pipes for plumbing, heating and ventilating. But domestic ore
reserves are in short supply and global inventories are dwindling.
The copper reserves, in the eastern Tibetan village of Chunyido, Jomda
county, in an area traditionally known as Kham, were discovered not long
after the dispute over the area's sovereignty began in the 1950s. But
shortly afterward, mineral exploration in China was cut, as developing
the country's mining sector wasn't a government priority.
The high altitude -- the average in Tibet is about 4,000 meters -- also
prevented China from mining the copper. The reserves are located in an
area of dense forest that has attracted the attention of Chinese
environmentalists concerned about the potential damage from mining.
As a result, a project to develop a copper mine there has been debated
for several years, before finally getting the go-ahead from China's
State Environmental Protection Administration in June. Tibetan reserves
are estimated at 6.5 million metric tons, and the country's total copper
reserves are 62.7 million metric tons.
The reserves will be developed by Yulong Copper Industry Joint-Stock
Co., a grouping of five Chinese entities. They are Zijin Mining Group
Co., a gold company; privately owned Western Mining Co. and Tibet Mining
Development Corp.; the Xizang Geology and Mining Survey Bureau; and the
Xizang Changdu State-Owned Assets Administration.
Western Mining, the largest shareholder in the consortium, estimates
production could reach between 150,000 and 200,000 metric tons of
electrolytic copper a year. Electrolytic copper is the purest form of
copper production.
Infrastructure, including water, housing, electricity and
communications, has been largely completed, Western Mining said,
including a power station on the Mekong River.
"It's become a small city," said Liu Xing, general manager of Western
Mining's local subsidiary in Tibet, Western Mining Tibet Resources
Investment Co.
Mr. Liu said the company is exploring the region for further copper
deposits. "We're certain we can find another Yulong in the area, and
we've been working with foreign companies to attract investment," he
said.
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