Beijing is planning to order the mainland's smallest gold miners to shut down in an attempt to eliminate short-term, profit-focused operators that ignore the industry's new focus on environmental protection.
The Ministry of Industry and Information Technology is drafting industry entry barriers that will include the elimination of miners with daily ore processing capacity of less than 50 tonnes, the official Shanghai Securities News reported, citing an unnamed ministry official who attended a national industry seminar in Wuhan, Hubei province, on Monday.
Since the state does not regulate the gold industry's output, rising gold prices have encouraged mining firms - many privately owned - to join the sector. Many such firms were small and focused on short-term gains, which had led to wastage as they recovered the best ores and left lower-grade material behind, the report said.
Such projects also often lack proper long-term environmental protection planning. Large mines that enjoy economies of scale tend to process lower-quality ore and rehabilitate the mined area properly.
A consultation paper on industry entry criteria is being drafted. It will include 'restricting development' of collieries with less than 100 tonnes of daily ore processing capacity, as well as those that have to source more than half the raw material for processing gold ore from a range of environmentally unfriendly cyanide chemicals, the paper added.
According to the China Gold Association, in 2006 the mainland had more than 1,200 gold mines, of which 739, or 61 per cent, had daily ore processing capacity of below 50 tonnes.