China hungry for mining investment, says CEO
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The CEO of Chinese state-controlled mining firm MMG has stated that the nation is "hungry" for new investment in the mining sector, with the company set to be one of the main sources of funding.
MMG Ltd, the international mining arm of state-owned China Minmetals Corp, has been selected as the country's preferred developers of mining projects overseas following a trial and now receives government support for investment in commodities of which the country is short.
Speaking for the first time in Melbourne, Australia after taking over the CEO role from Andrew Michelmore, Jiao stated that China's new drive to increase its number of electric cars, as well as its One Belt, One Road initiative, is likely to boost the country's commodities investment.
As such, he argues that securing a safe supply of resources is high on the government's agenda. "We now face a new improving cycle and I am optimistic for demand," Mr Jiao said. "I worry very much, however, about where the supply will come from."
Mr Jiao added that MMG is the ideal vehicle for foreign investment into international resources that China currently requires such as copper and zinc, both of which have contributed to the company's 75 per cent share price gain this year.
However, despite their current base, the firm has announced it will direct Chinese investment towards less established mining nations, such as those along the One Belt, One Road region and those south of the equator in Africa or Latin America.
Regarding electric cars, Mr Jiao said that he was in no doubt that they would prove as successful as the advanced solar panel market, adding that he is sure they will take off in China before they make headway elsewhere in the world.
He argues that this can only mean positive things for the future of the commodities industry, particularly in terms of copper. "Usage of copper and other base metals in electric vehicles is six or seven times the intensity (compared to petrol-fuelled cars) … I feel copper will be the most beneficial commodity," he said.
Minmetals has already been praised for its successful investment in and development of the Las Bambas copper min in Peru and a zinc mine in northern Australia, both of which are expected to contribute towards MMGs predicted annual production level of 560,000-615,000 tonnes of copper and 65,000-72,000 tonnes of zinc in 2017.