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Chinese officials call for more government funds in domestic exploration


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Chinese officials call for more government funds in domestic exploration

WhileChinese overseas mining investments have significantly increased in recent yearsof government initiatives, Chinese officials said the industry should give higherpriority to domestic exploration — particularly in theless developed northwest region.

Fu Ying,deputy director at the Economic Research Center of Ministry of Land and Resources,told delegates at the Xinjiang-Central Asia Mining Development Forum on July 22that mining resources in China's northwest region have been underestimated due toinsufficient exploration.

"Theprice rebound in metals this year is an opportunity to kick off a new round of explorationdevelopment in [the domestic] mining sector," Fu said.

"Thegovernment should provide more support for exploration at the underdevelopedbut resource-rich northwest area," he added.

NorthwestChina consists of five provinces and districts — Xinjiang, Shaanxi, Gansu, Qinghaiand Ningxia — covering around 30% of China's land area.

Thoughthe region contains a large proportion of the country's mining resources, the numberof exploration rights of respective provinces and districts ranked at the lowestlevel in the country, according to Liu Jiaqi of the Chinese Academy of Social Sciences,China's top government think tank.

"Thereare a large number of undiscovered ore deposits in Xinjiang," Liu said, notingthat aeromagnetic measurements only cover around 23% of the surface area of Xinjiang,while the figure of geochemical exploration is around 8%.

Liu alsocompares Xinjiang to South Africa, noting that the regions' minerogenetic conditionis similar to that of the mining-heavy country.

However,the average depth of drill holes in China is around 300 to 500 meters, which comparesto nearly 4,000 meters in South Africa and an average of between 800 meters and1000 meters in top mining countries, according to Liu.

Liusaid that the region's mining industry has been constrained by funding shortageas well as China's lagging behind in exploration technology.

"The government should provide morefunding support for exploration-stage projects in order to introduce more fundsfrom the domestic private sector and foreign companies," Liu said.

Earlierthis month, China relaxedrules for foreign investments in its mining sector, allowing overseas companiesto set up mining or exploration subsidiaries in four free trade zones without approval from authorities.