Reorientation of the mining industry

China’s surplus capacities

Summary: Due to its gigantic appetite for commodities, China has been a source of big profits for the global mining industry. But now the growth has apparently come to an abrupt end, resulting in overcapacities not only in China but also in the countries that supply China with raw materials. The mining industry has experienced an unexpected hard landing. This report presents the latest trends, based on the examples of the iron ore, coal, gold and copper industries. 

1 Introduction

At the beginning of this year, economic news sources carried the story that China intends to axe about every sixth job in the mining industry due to the substantial overcapacities in its coal and steel industries. The National Development and Reform Commission (NDRC) plans to decommission about 500 million tonnes per year (mta) of coal production capacity and approximately 120-150 mta of steel production capacity in the next 5 years. According to these plans, 1.3 million jobs will be axed in the coal industry alone, as well as 0.5 million in the steel industry. Several mines are...

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