China’s mining industry is experiencing a “golden age” that has seen its profits soar by a third in the past five years, a report released Thursday by an international research institute found.
The report from the London-based EcoMax Group, a research organization, found that the average profit margin for Chinese mining companies has increased from $20 per metric ton in 2014 to $28.25 in 2020.
The EcoMax report was based on data compiled by EcoMax and the International Centre for the Study of Radicalisation and Political Violence (ICSR), a Washington, D.C.-based research organization that supports anti-China and anti-capitalist views.
The study also said that the Chinese government’s crackdown on corruption has had a huge impact on the mining industry.
“This is a golden age in Chinese mining,” said Mark Evans, director of EcoMax’s global research group.
“China is the largest coal and gas producer in the world, and has become the biggest producer of renewable energy in the last decade.
It is also a major supplier of hydroelectric power.”
While the average annual profit for mining companies increased by more than 50 per cent, the amount of money invested in mining remained relatively flat.
“Despite the boom in profits, it is important to remember that the growth rate has been almost flat since 2014, while the average monthly profit has gone up by less than 5 per cent,” Evans said in a statement.
The findings were based on the 2016 Global Energy Outlook, a forecast prepared by the International Energy Agency, the United Nations agency responsible for climate change and other environmental issues.
The forecasts show that China is set to become the world’s top energy producer by 2035.
Evans said that mining has become “a big business” for the Chinese economy and it is a major source of income for the government.
“The government’s decision to increase the share of coal mining in the economy in the next 10 years is a big risk for the industry and it needs to be understood in this context,” he said.
The government in Beijing has increased the share in the industry from 10 per cent in 2014, to 17 per cent today.
“In the last 10 years, the government has increased its share of the coal mining industry from 25 per cent to almost 70 per cent of the industry,” Evans added.
The figures are based on a total of 5,721 companies in the sector, and include only companies operating in China.
Companies that have not yet filed their 2018 financial statements, or have not filed a financial statement for the past year, are not included in the figures.
The Chinese government has long sought to increase investment in the country’s economy and the number of mines, but the number is steadily declining.
In the last three years, China has had only 5 per a year growth in the mining sector.
The latest figures showed that the total investment in mining in China had fallen by 7.9 per cent year-on-year, the lowest annual rate since 2007.
Evans noted that while mining has grown, it has also become more expensive.
“It is a highly regulated industry, with stringent safety and quality standards,” he added.
“As a result, there are now more risks associated with mining than ever before.
This is a real risk.”
The report said that while the Chinese mining industry had grown significantly over the last few decades, it still faced significant challenges in the early years.
The industry faced a number of issues including corruption and an “extreme shortage of skilled labour,” Evans explained.
“While the government is taking steps to combat corruption, the fact remains that a high percentage of the workforce remains underpaid, vulnerable to blackmail and under-qualified for the job,” Evans noted.
Evans stressed that the sector needed to be more open, transparent and transparent about its finances.
“There are huge gaps in the public record and we need to find ways to make sure we have accurate information about our industry and how we make money,” Evans continued.
“We must ensure that the public is aware of the role that mining plays in the overall economy.”
Evans said the report was “an important reminder” of the need to support the industry’s development.
“Our sector faces an enormous challenge to ensure that it is not pushed to the edge and the growth of the mining boom is not jeopardized by corruption and weak labour standards,” Evans concluded.