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Beyond China: five up-and-coming mining hubs in Asia
While China dominates the field as a mining superpower and minerals exporter, there are several other countries in Asia ready to step up to the global stage. Yoana Cholteeva looks at some of the other growing mining hubs in the region and their successful development.
Countries rich in mineral deposits have been focused on mobilising infrastructure and refining government policy to make the most out of their natural resources.
According to InEight vice president of industry engagement Rick Deans, Asia’s budding mining hubs are built by “typically (but not exclusively) mature firms with global operations”, possessing “the ability to truly understand costs relative to discovery, development and production”.
As the most critical stage in the life of a mining asset is often development, he suggests that, like in most industries, the cost and timelines of construction can be unpredictable, and could damage the economic assumptions used to justify expenditure.
“Experienced owner-operators mitigate this risk with good process and data, enabling them to be an active collaborator with their engineering and construction partners throughout the development stage,” he says, adding that a digital approach to project cost management could enable operators to forecast costs and predict where operations are headed.
Below are five Asian nations outside of China that have emerged as increasingly important hubs in global mining.
More than half of the country’s coal mines are managed by pro-Russian separatist militia.Credit: DmyTo/Shutterstock.
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India
With its rich mineral deposits, India became the third-largest producer of coal in 2018, standing at 688.8 million tonnes, and the world’s second-largest crude steel producer during the same year, with an output of 106.5 million tonnes.
The country also ranks fourth globally in terms of iron ore reserves, hosting around 8% of all existing deposits. Other mineral resources include bauxite, coal, and considerable opportunities for future discoveries of sub-surface deposits.
The strategic location of the country enables convenient exports to China, Hong Kong and other lucrative Asian markets. Infrastructure development and automotive production have equally influenced the growing sector.
In terms of local regulations, under the Mines and Minerals (Development and Regulation) Act of 1957, the government requires concessions and collects royalty, dead rent and fees, before approving mining activity through budgetary processes. However, in a recent development, the Supreme Court introduced hopes that in the future, the ownership of minerals will be vested with the owner of the land instead of the government.
Overall, India’s mining industry accounts for 2.5% of its GDP and is fuelled by a host of big state-owned companies which have established a monopoly over the sector.The biggest miners in the region include National Mineral Development Corporation mining copper, rock phosphate, limestone, gypsum bentonite, magnesite, diamond, tin and tungsten; Vedanta producing zinc; and Hindustan Zinc mining zinc, silver and lead
Indonesia
Indonesia is another prominent and established part of the mining industry on the continent, producing significant amounts of coal, copper, gold, tin, bauxite, and nickel. With 255.7 million tons of produced coal in 2016, the country is considered one of the world’s largest exporters of thermal coal.
Some of the biggest Indonesian operators include coal-miner Bayan Resources – the world’s 40th largest mining firm by market cap for 2018 – and PT Merdeka Copper Gold.
The country has recently seen limited mining investments, particularly in greenfield projects. While Indonesia has a history of regulatory uncertainty and temporary mining export bans, there is still plenty of opportunity for Indonesia to realise its mining potential, especially considering its 4.2 billion tons of proven coal reserves, and an additional 12.9 billion tons in inferred reserves.
The local long-standing Contracts of Work framework for foreign investment was replaced under the 2009 Mining Law with a new area-based licensing system which influences both foreign and domestic investors and incorporates tendering procedures for granting licences. Now it involves local and provincial governments, as well as the central government.
A 2018 government project was also introduced to reduce bureaucracy in the mining sector and improve Indonesia’s economic competitiveness. Up to March 2018, 32 regulations and 64 requirements for certifications, recommendations, and permits were revoked to reduce duplication, lessen bureaucracy and simplify business activities.
Saudi Arabia
Saudi Arabia's mining sector continues to expand and it provides a growing opportunity for international companies.
The country’s key mineral resources include gold, copper, iron ore and phosphates, with the state-owned Saudi Arabian Mining Company (Ma’aden) being the biggest mineral producer in the country and the largest multi-commodity mining and metals company in the Middle East.
In January 2020, the Saudi Arabian government announced plans to make mining the third pillar of the economy, alongside oil and downstream petrochemical production. The Ministry of Energy, Industry and Mineral Resources is seeking to increase mining’s contribution to GDP from $3bn to $64bn by 2030, and generate more than 25,000 new jobs in the industry.
A previous call for action was the announcement from March 2018 that the Kingdom has $1.3tn worth of mining resources and aims to quadruple the size of its mining, renewables and logistics sectors.
Recent changes in Saudi Arabia’s mining laws have also created conditions that allow greater access to foreign investors. The new laws enable companies to work either with Ma’aden or through joint ventures with local companies.
Malaysia
The mining sector in Malaysia has been playing an important role in the country’s economy ever since it began tin mining expansion in the 1870s. Between 2010 and 2019, GDP contribution from Malaysian mining averaged around $5.8bn. The country is currently among the world’s top ten producers of refined tin, rare earths and mined tin.
In recent years, foreign investors have contributed to the sector, either indirectly or through strategic joint ventures with local firms. Such investments will considerably strengthen the mining sector and increase the country’s prominence as a mining hub. There are currently 98 iron ore mines, 15 gold mines, 14 tin mines and seven coal mines in operation in the country.
Despite progressive growth in the sector, Malaysia could also benefit from increased transparency over the grants of mining leases, concessions and exploration permits, since it often operates with non-disclosure agreements.
Major local mining trade associations include the Malaysian Chamber of Mines, The Kuala Lumpur Tin Market, and the Malaysia Tin Products Manufacturers’ Association.
Most mining and mineral-processing businesses incorporated in Malaysia are privately owned or part of joint ventures with state-owned companies.
Uzbekistan
Uzbekistan’s mining industry is one of the country’s most important and strategic sectors. The country is the world’s eighth-largest producer of gold and the seventh-largest uranium producer. Uranium extraction in Uzbekistan relies on underground (or in-situ) leaching, which can be more environmentally sustainable than traditional open-pit or underground mining methods, with little surface disturbance and no tailings generated.
Uzbekistan also produces copper, silver, coal, phosphate, molybdenum, potassium, tungsten, lead, and zinc. It possesses large reserves of nonferrous, rare, and diffused metals.
Some of the largest mining producers in the country are the state-owned companies Navoi Mining and Metallurgy Combinat and Almalyk Mining and Metallurgical Complex, which Uzbekistan is planning to modernise to speed up gold and copper production operations over the next 10 years. As part of this plan, the country is looking to upgrade its mining infrastructure and pipelines.
In addition, the government intends to encourage joint ventures with Russian and Asian companies in an attempt to improve the country’s mineral and mining sectors.
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