Research report on three mining companies in Liaoning Province

Liaoning Province is a province with relatively developed mining industry in my country. Here, many mines were built early and have a relatively high degree of modernization. In July 2006, I investigated the Anshan Iron and Steel Group Mining Company (hereinafter referred to as Anshan Iron and Steel Mining Company), Tiefa Coal Industry (Group) Co., Ltd. (hereinafter referred to as Tiefa Coal Company) and Hongtoushan Copper Mine 3 Mining companies conducted research. The research report is briefly described as follows.

(1) Basic information of the three mining companies

(1) Anshan Iron and Steel Mining Company is the main iron ore production base of Anshan Iron and Steel Co., Ltd. It is an enterprise integrating mining, mineral processing, sintering, machinery manufacturing, It is a large-scale state-owned mining enterprise that integrates power repair and construction installation industries and is a wholly-owned subsidiary of Anshan Iron and Steel Group Corporation. As of the end of 2005, it had 4 large iron mines, 4 large mineral processing plants, 1 sinter production line, 1 activated carbon production line, 4 auxiliary material mines, as well as mining research, design, mining machinery, transportation equipment repair, power, mining Construction and other related auxiliary industries, including 8 main production plants and mines (Table 4-1).

Table 4-1 Production Scale of Angang Mining Company

(2) Tiefa Coal Company was established in October 1999 and implemented a debt-for-equity swap in August 2002. It is a It is a large-scale diversified coal enterprise group that focuses on coal production and integrates coalbed methane development and utilization, construction and installation, machinery manufacturing and processing, building materials, and electric power.

The predecessor of Coal Industry Group, Tiefa Mining Bureau, was founded in 1958. The mining area consists of three coalfields: Tiefa, Kangping and Kangbei, including 8 pairs of production mines. The approved production capacity is 22.65 million tons, and the actual production capacity has reached more than 21 million tons. As of the end of 2005, the group company's total assets were 9.35 billion yuan, with an asset-liability ratio of 46.37. The total number of registered employees is 44,000, and there are 18,000 collective employees (Table 4-2).

Table 4-2 Production Scale of Tiefa Coal Company

(3) Hongtoushan Copper Mine is now a large-scale non-ferrous metal mining enterprise in Northeast China that combines mining, dressing and smelting. . Design capacity: mining 550,000 tons/year, daily processing capacity of 1,300 tons of mineral processing, and smelting capacity of 6,300 tons/year; actual capacity: mining 650,000 tons/year, daily processing capacity of mineral processing 1,800 tons, and smelting capacity of 12,000 tons/year. The current annual output level of mineral products is 8,000 tons of copper concentrate, 9,000 tons of zinc concentrate, 200,000 tons of sulfur concentrate, 12,000 tons of blister copper (containing 200 kilograms of gold and 13 tons of silver), 50,000 tons of sulfuric acid; in 2005, the total industrial output value was 538 million yuan (Table 4-3).

Table 4-3 Hongtoushan Copper Mine Product Output

The above three mining companies have the same characteristics: ① They are all state-owned enterprises, among which Angang Mining Company and Hongtoushan Mining Company Toushan Copper Mine is invested by a state-owned enterprise, while Tiefa Mining is jointly invested by the State-owned Assets Supervision and Administration Commission of Liaoning Province and Cinda Asset Management Company. ② They are all mining companies with a relatively long history. They were established in the early days of the founding of New China and the late 1950s. In the early days, the state provided mineral resources free of charge. ③ They all implement first-level financial management at the company headquarters to form a strong investment center and profit center. A financial reimbursement system is implemented for the affiliated mines, wellheads and pitheads, forming a manufacturing cost center. However, they also have differences. They are mainly based on primary mineral products and extend backwards. Their industrial chains are of different lengths: ① Coal enterprises have the shortest chain, which is sold directly from the pit mouth; ② Iron ore can be formed after three processes. Internal commodities, that is, mining, mineral processing and sintering processes; ③ The industrial chain of copper ore extends to smelting, that is, mining, mineral processing, and smelting, to form commodities.

(2) Mining companies’ absolute dependence on mineral resources and the resulting initiative

Compared with other industries, the most important feature of mining is that grassroots mines have fixed points and timing of mineral resources. demand and one-time supply for many years of use. This feature determines that a mine should be built based on a specific mineral location. Once the production capacity is formed, it will be relied on for life. If it is continued in a different place, it is equivalent to a new mine. This enables mining companies to play a great active role in excavating mineral resources locally and nearby.

It can be said that solving the problem of connecting resources locally and nearby is the extension of the life of the enterprise and the best economic and social benefits. In this regard, the three companies we investigated all have outstanding performances, and each has its own characteristics, which are worth learning from:

(1) Anshan Iron and Steel Mining Company mainly relies on breakthroughs in mineral processing technology to convert minerals that were previously difficult to utilize Make full use of the "red ore" (hematite). Red ore accounts for 2/3 of the company's 2.8 billion tons of iron ore reserves. Therefore, this breakthrough is equivalent to a reserve increase of twice the original available reserves (magnetite). This patent is not only internationally leading, but also provides a barrier for the protection of mineral resources. Because this type of ore can only be used by Anshan Iron and Steel Co., Ltd., as long as Anshan Iron and Steel Co., Ltd. does not purchase it from outside, the local area will not mine it indiscriminately.

(2) Hongtoushan Copper Mine has made major breakthroughs mainly through on-site prospecting. In the early days of the mine's construction, the copper reserves handed over by the state were only 9.85 million tons (metal content); in 2005, they had accumulated proven geological reserves of 29.56 million tons. The newly added 19.71 million tons of geological reserves were all solved by themselves, giving a new life to the mines that were about to be closed. Today, the company still has more than 9 million tons of geological reserves and continues to search for them. The main direction is deep prospecting and peripheral prospecting.

(3) Tiefa Coal Company is mainly prospecting for ore in the periphery on the one hand, and prospecting for ore in the outer areas (Inner Mongolia) on the other hand, using a two-pronged approach to increase continued resources. Its deployment is: ① It is inferred that on the south side of the Great Wall Wobao mine field, there is the possibility of coal existence within a burial depth of 1,000 to 1,500 meters and an area of ??24 square kilometers. It is predicted that the thickness of the coal seam is 5 to 7 meters, and the coal reserves are 180 million tons. , ready to start work. ②The Changtu Coalfield has a coal-bearing area of ??3,750 square kilometers, an area of ??50 square kilometers that has reached census level, and a Class D reserve of 230 million tons. The company has applied to be included in the overall planning scope of Tiefa Coal Industry Group and has applied for support and approval from the land and resources department. ③The coal-bearing area of ??the eastern census area of ??Tiefa Coalfield is 347 square kilometers, with C-level reserves of 42.682 million tons. This area has also been included in the overall planning scope of Tiefa Coal Industry Group.

The above examples illustrate that mining companies have made solving the problem of continued resources a major issue, creating a strong counterforce (the positive effect is that it consumes mineral resources), and achieving results that exceed expectations. It is understood that this powerful motivation mainly comes from the need for enterprises to safeguard their own interests, and this self-interest of enterprises is closely linked to the interests of all employees of the enterprise, their families, and even local residents. And move the whole body. This is a powerful incentive mechanism. This active role of mining enterprises in mineral resources makes us deeply feel that the increase of my country's mineral resources cannot rely solely on independent geological exploration units, but also on existing mining enterprises. The main role of enterprises in mineral exploration cannot be shaken.

(3) The mining industry is facing unprecedented opportunities

Enterprises aim to maintain and increase the value of capital and pursue profit maximization. The current mining companies are facing their most powerful period in history precisely with this goal in mind. The profits of these three mining companies have rebounded since 2000, and have experienced extraordinary growth since 2003, reaching the best level in history (Table 4-4~Table 4-6).

Table 4-4 Profit status of Angang Mining Company

Table 4-5 Profit status of Tiefa Coal Mining Company

Table 4-6 Hongtoushan Copper Mine Profit situation

Except Tiefa Coal Company, the after-tax profits of the above three companies are all around 20, and they are relatively stable. Tiefa Coal Company has suffered from long-term losses due to its poor resource endowment. Now it has not only turned a loss into a profit, but also has a very high profit, and its income growth has also been considerable. It is understood that these profits mainly come from the increase in mineral product prices.

Among them, Anshan Iron and Steel concentrate rose from 262 yuan per ton in early 2003 to 560 yuan in 2005, an increase of 11; sinter ore rose from 343 yuan per ton in 2003 to 650 yuan in 2005, an increase of 88; the average price of coal mines , in 2003 it was 138/yuan ton, in 2005 it was 248/yuan ton, an increase of 80%; the average price of copper mines increased from the original 15,000/yuan ton to the current 60,000/yuan ton, an increase of 300%. The increase in mineral product prices this time is mainly caused by the increase in demand, which provides a broad space for an increase in profits; and the increase in profits greatly enhances the strength of the company, benefiting many parties. This is reflected in the following three aspects:

First of all, enterprises have increased their investment. Tiefa Coal Industry Company's total investment in production from 2003 to 2005 was 281 million yuan, 316 million yuan, and 397 million yuan (a total of 990 million yuan), and its total safety investment was 65.25 million yuan, 81.96 million yuan, and 238.36 million yuan respectively. yuan (a total of 3,855.7 billion yuan). This has been rare for many years. Since 2003, Ansteel Mining Company has invested 30 million yuan in supplementary exploration of Dagushan Iron Mine, Dong'anshan Iron Mine, Mianyanshan Iron Mine and exploration of Lazishan Iron Mine. Some of the work has not yet been completely completed, and the resource reserves are estimated will increase by more than 200 million tons. In 2004, Anshan Iron and Steel Mining Company acquired the mining rights of five Xi'anshan Iron Mines and used them as backup mines. In 2005, the Heishilazi Iron Mine exploration rights transfer agreement was signed with the Liaoning Provincial Metallurgical Geological Exploration Bureau, which is intended to be used as a continuation resource for the backup mine. Hongtoushan Copper Mine has invested 8.19 million yuan and 10.87 million yuan in technical transformation. It is estimated that 150,000 tons of mineral reserves can be recovered, with benefits reaching more than 18 million yuan.

Secondly, it will benefit the majority of enterprise employees. From 2003 to 2005, the average annual income of employees of Anshan Iron and Steel Mining Company increased from 13,000 yuan to 18,000 yuan; the average annual income of employees of Tiefa Coal Industry increased from 15,969 yuan to 25,054 yuan. This was the period during which the living standards of employees improved the fastest since the establishment of the mine.

Once again, the country benefits. The taxes paid by the three mining companies were 667.36 million yuan in 2003, 129.35 million yuan in 2004, and 1309.13 million yuan in 2005, an increase of 96% in three years. In addition, mineral resource compensation fees have also increased year by year.

In addition to the above-mentioned benefits, the improvement of the awareness of mining company leaders and employees to cherish mineral resources is more fundamental and long-term.

(4) Mining companies’ awareness of cherishing resources has been transformed into actions

It is understood that the motivation for mining companies to cherish mineral resources comes from the company’s own economic interests, especially in the medium and long term. Economic benefits; derived from the improvement of workers’ living standards and the expectation of sustained and stable employment. These dynamics have formed effective mechanisms and produced good results. Ansteel Mining Company's iron ore mining is mainly open-pit mining, with a recovery rate of over 95% and almost no losses. Most of the reserves mined by Tiefa Coal Company belong to thin coal seams, but the mining loss rate is still not high. It was 39 in 2003, 28 in 2004, and 29 in 2005. In the 1980s and 1990s, the mining dilution rate of Hongtoushan Copper Mine was 20-26, the loss rate was 12-14, and the copper supply grade was 1.2-1.3; in the first half of 2006, the copper supply grade reached 1.56, The recovery rate reached 97, creating the best level in history.

Their main methods are:

(1) Strengthen management during the mining process. The main measure is to strengthen the implementation of the loss management system. At present, Hongtoushan divides the calculation of mineral loss into three parts: mining loss, unmined loss and write-off mineral volume. Unmined losses are divided into normal losses (design losses) and abnormal losses (losses due to safety and other reasons). These losses will be implemented through the implementation of indicators and implementation of responsibilities. At the same time, the management of residual ore recycling has been strengthened and achieved good results.

(2) Strengthen management during the mineral processing process.

By optimizing flotation and changing selection, the zinc flotation process has been improved to increase the recovery rate of zinc by 15%; by applying polyurethane screens to ensure accuracy and using crushing instead of grinding, the grinding efficiency has been improved; by transforming the dehydration process, the metal flow rate has been reduced; through ceramic The filter replaces the pleated belt filter to reduce the loss of concentrate; through the transformation of the trench and its facilities, the trench ore can be recovered to the maximum extent.

(3) Strengthen management during the smelting process. This includes strictly controlling the copper loss in blast furnace slag and reducing the copper content in blast furnace slag; developing and utilizing "electric precipitator" to rationally utilize resources; using plastic and woven bags to soak copper concentrate to reduce the loss of copper concentrate. losses etc.

(4) Make full use of tailings to recover mineral resources. Hongtoushan Copper Mine has three tailings ponds, storing a total of 3.7 million tons of tailings. When the company discovered that the sulfur content in the tailings reached 3 to 7%, in 1993 and 1996, two sulfur dressing plants were built between the dressing site and the underground, and between the tailings reservoir and the underground, realizing the entry of tailings. By re-selecting sulfur before underground filling, the sulfur content can be recovered up to 30,000 tons per year, creating an annual output value of more than 4 million yuan. As early as 1997, the company had put in some work, conducted systematic sampling, determined the contents of various precious metals and rare metals, and compiled drawings and reports, laying the foundation for the utilization of tailings.

The above-mentioned examples of cherishing mineral resources and rationally utilizing mineral resources show that the role of enterprises is the most important. Some people say that corporate profit maximization constitutes an obstacle to the rational utilization of minerals, but this is not entirely true. The three mining companies under investigation are all independent enterprises, and they all pursue profits. However, they are not eager for quick success, exploiting the rich and abandoning the poor, or mining the big and abandoning the small. On the contrary, Hongtoushan Copper Mine is still in the process of increasing the price of mineral products. In higher periods, narrow-vein ores with higher costs are mostly mined, leaving rich ores and thick-vein ores to be mined when prices are low. The production capacity of Tiefa Coal Company has reached 23 million tons per year, but they have always controlled the mining volume at about 21 million tons and did not suddenly increase production because of high prices. The reason why they do this is to consider the current interests and long-term interests of the company. The long-term interests of enterprises are completely consistent with the country's requirements for mineral resource management.

(5) Issues to consider

(1) Mineral resource compensation fees are collected too little. Ansteel Mining Company's total output value in 2005 was 5.5 billion yuan, with a profit of 780 million yuan. The resource compensation fee paid was only about 10 million yuan. Theoretically speaking, mineral resource compensation fees represent the rights and interests of the state as the owner of the resources. However, if these rights and interests are not in place, the contradiction has become increasingly prominent when the price of mineral products has increased significantly. In this regard, we neither remedied it in time nor lacked the necessary understanding. This is really a management error.

(2) The theoretical basis for the government to collect mining rights prices is unclear. According to my country's current laws, the price of mining rights includes two sources: one is formed by the state's investment; the other is formed by explicit differential income. But now the local government has expanded the scope, and the government must also implement "compensation" for mining rights formed by companies using their own capital. For example, in the Hongtoushan Copper Mine, the 9.84 million tons of copper reserves, which were originally provided free of charge by the state, have long been used up. The 9.58 million tons of copper reserves currently maintained are entirely formed by the company's own investment, and the investment costs have been included in the mineral products. cost. Nowadays, it is "paid" for it, which is really "unreasonable". Because although the Hongtoushan Copper Mine is owned by the state, once the state-owned capital enters the enterprise, it becomes the property of the legal person, and the investor cannot take it back at will. This problem is actually closely related to the previous one, that is, if the resource compensation fee is not in place, the price of mining rights will be used to make up for it. However, such remedies will have serious consequences in the long run, namely weakening ownership and causing legal confusion.

(3) Angang Mining Company holds too many iron ore reserves and may form a monopoly. According to the arrangements of the Liaoning Provincial Party Committee and Provincial Government, the Liaoning Provincial Department of Land and Resources has provided special support for the iron ore reserves needed by Anshan Iron and Steel. It already has 2,846.9 million tons of reserves, which were obtained free of charge in the past; it obtained 4,716.8 million tons of reserves with compensation, and the sum of the two is 7,563.7 million tons, but it has only produced 538.28 million tons of reserves.

The remaining reserves, based on the current annual production scale, are enough to be exploited for 10 years. This obviously means that the resource occupancy is too large, and it is likely to form a regional monopoly in the future, which is not conducive to the reform trend of the market economy.

(4) At which stage the rights and interests of state ownership of mineral resources are realized requires in-depth study. According to international practice and the provisions of my country's Mineral Resources Law, the realization of ownership rights and interests in mining resources is in the mineral product sales link. This makes sense: first, only in this link can the quantity and quality of the country's mineral resources be realized. Obtain confirmation; secondly, only in this link can it be easily borne by the enterprise without the need to advance a large amount of funds. However, now the resource owners' rights and interests collected by local governments in the name of mining rights must be paid in one lump sum, which results in financial expenses (bank interest) that are unbearable for enterprises. According to Angang Mining Company, the Hujiamiaozi iron ore they purchased from the government requires a payment of 300 million yuan within six years and a useful life of 30 years. This is equivalent to paying now for mineral reserves 30 years from now. This payment method, if the annual interest is calculated as 6, will cause them to bear financial expenses of more than 10 million yuan every year.

(5) Whether the utilization rate of mineral resources is high or low requires detailed analysis. For a long time, the utilization of mineral resources has left people with the impression that my country's mineral resources are severely lost and wasted. However, according to what we have seen, the utilization of existing resources by these three mining companies is far higher than the national regulations. For example, Anshan Iron and Steel Mining Company has mined all hematite with an iron content of 20, while in the past it was mined off-balance sheet. Another example is that at the Hongtoushan Copper Mine, people use woven bags to pick up lost slag and use brooms to clean the mineral powder in the tunnels. These are all conscious actions. Therefore, we should re-understand the current situation of mineral resource utilization.

(6) Understanding and Suggestions

(1) Have a comprehensive understanding of mineral resources and the role of mining. It has at least four effects on local economic and social development: ① Increase wealth benefits. Since the net value of mineral resources is the net remainder after deducting various inputs and average profits from the sales revenue of mineral products, whoever develops it will definitely increase local wealth. ②Economic growth effect. The total industrial output value formed by mineral development can directly increase the development rate of local GDP. These three mining companies created an output value of 1.6 billion yuan in 2005, an increase of 20% over 2004. ③Fiscal revenue effect. In 2005, these three mining companies provided a total of 1.57 billion yuan in taxes. ④ Provide employment effect. In 2005, the three mining companies had 68,000 employees. Governments at all levels should understand the concern for mineral resources from these perspectives and guide them in the direction of strengthening the long-term development of the mining industry.

(2) Management and services should be strengthened according to the characteristics of differential returns in the mining industry. Mining is an industry that uses mineral resources as raw materials, and the endowment of mineral resources has always been unbalanced. Coupled with the differences in geographical location, there are not only horizontal differences (between different regions) in the income from its origin, but also vertical differences (development within the mining area). different stages). We were deeply touched by these differences in this survey. Therefore, in the management of mineral resources, we cannot rely on "one time and one place" to determine mining policies. We must target this differential income to encourage the development of inferior resources and regulate the development of superior resources to achieve the purpose of comprehensive and rational utilization of domestic resources.

(3) Mineral exploration must be returned to the mining industry. Mineral development's dependence on mineral resources is different from the general industry's dependence on raw materials. It is mainly used for many years at a time. Once it is continued in another place, most of the original equipment will become useless. This dependence inspires mining companies to pay extraordinary attention to the continuity of mineral resources, just like a person cares about his own life. We were deeply impressed by this when investigating these three companies, and then realized that wouldn’t it be better if all commercial mineral exploration was returned to the mining industry, and the government only made necessary macro-regulations? The role of the market should be given full play.

(4) Mineral resource management should be extended to the management of mining industry. Judging from these three mining companies, mining, as an industry that mainly produces mineral products, has chains of varying lengths. The longest chain is the copper mine, which goes all the way to smelting; the shortest chain is the coal mine, where commodities come out of the pit.

The management of mining is to be responsible for the entire process of mining production, because every process of mining production has issues of rational utilization of resources and protection of resources. However, when we emphasize the need to manage the mining industry, we do not require the government to specifically manage every process of mining production, but to apply management efforts to the main body of management, that is, mining enterprises, so that they can actively build a system for saving and rationally utilizing mineral resources. mechanism to cultivate a corporate culture of cherishing mineral resources. Give full play to the active role of enterprises that use mineral resources in rational utilization of mineral resources, and formulate corresponding incentive and restraint policies on this basis, instead of the government itself directly managing it, and the more detailed the management, the more detailed it is.

(5) The role of geological work must be correctly evaluated. Geological work plays a vital role in the discovery and exploration of mineral resources. In a certain period, it can advance or delay the discovery of mineral resources and increase or decrease the reserves of mineral resources, but it cannot create mineral resources. The practice of mineral resources in Liaoning Province has proved that although there are nearly 20,000 professional geological teams looking for minerals, there have been basically no major breakthroughs in the exploration of bulk minerals such as non-ferrous metal mines and coal mines in the past 30 years. As a result, the original 8 non-ferrous metal mines have Seven mines have been closed down, leaving only one in Hongtoushan, and its resources were found by the mines themselves. This fact shows that geological work must respect geological laws and economic laws. The law of geology is that minerals can be found where they are generated; the law of economics is that there are cost constraints for mineral prospecting. If the cost of prospecting exceeds the unbearable cost of mining companies, it will not work under the market economy system. When we strengthen geological work, we must respect these two laws. We cannot think that as long as we increase investment in geological work, we can solve the problem of mineral resources.