Mining Opportunities Resulting From
“One Belt One Road”
The recent slowdown in China’s demand for certain mineral resources has caused significant problems to those who had bet on continued breakneck growth. However, the evidence suggests that rather than representing a major decline in demand, current conditions represent a readjustment with considerable potential for profit by those who intelligently position their investments. The massive infrastructure investments China is making as part of its new ‘One Belt, One Road’ policy are the centerpiece of the country’s strategy to transition its economy to a more managed and sustainable growth rate. China has recognized that regionally balanced growth is a necessary condition for their continued economic prosperity. Chinese President Xi Jinping’s prediction of an annual trade volume of $2.5 trillion between China and other participants in the New Silk Road in ten years sets an expectation for significant growth in partner countries.
Mining is often mentioned as one of the specific areas benefiting from One Belt, One Road, but what this means for the industry is still not widely understood. What is clear, however, is that demand for mineral raw materials from China will continue to grow at a brisk pace over the next decade, 6% annually according to Research and Markets. Furthermore, the development of infrastructure in China’s neighbors will also require substantial investments in base minerals and other resources. What was seen as a potentially industry-killing move by Indonesia to restrict the export of ores in order to encourage domestic processing facilities now seems to have been ahead of the curve. Analysts wondering who will invest in these facilities now have a ready answer in a China who is interested in the economic and political benefits of stronger regional growth.
China’s investment RMB are coming but they will only produce the needed effects if investors confront the problems inherent to politically sensitive investment abroad. Asia-Pacific Mining Finance experts have studied the reasons for past difficulties China’s companies have experienced in the mining industry abroad, and are ready with analysis and recommendations to promote success among our partners, so that we may all walk down the New Silk Road toward greater profits.