China: The Authorities Encourage Low Grade Phosphate Rock Exploitation

China will enhance phosphate ore resource exploitation in the coming years and the low grade phosphorus ore exploitation is encouraged.

According to the Development Plan of Chemical Mining Industry, released by the China Petroleum and Chemical Industry Federation (CPCIF) in June 2011, China will focus on the exploitation of phosphorus, sulphur and potassium resources in the 12th Five-Year Plan which goes from 2011 to 2015.

The Plan establishes that China aims to realize phosphorus ore self-sufficiency by achieving an annual output of 75 million tonnes by the 2015. In order to achieve the target, the CPCIF suggests rising the utilization rate of phosphorus resource by means of levying lower resource tax to encourage the exploitation of low grade phosphorus ore and raising the entry criteria of phosphorus ore exploitation on scale. Meanwhile, it suggests that the Chinese authorities should improve the phosphorus resource reserving mechanism to protect phosphorus resources.

China produces over 60,000 tpa of phosphate rock concentrate and its reserves are estimated in some 3.7 billion tonnes rock, about 6 percent of the global reserves. In the first half of the current year, China exploited 36.78 million tonnes phosphorus ore, increasing by 25.5% year on year. Hubei, Yunnan, Guizhou and Sichuan are the main production areas. According to the announcement of the Sate Council in June 2011, the Sate Council will continue to encourage phosphorus resource exploitation in the Yichuan of Hubei Province, the middle part of Yunnan Province and Kaiyang of Guizhou Province to develop local phosphorus chemical industry and set up phosphate chemical bases.

Besides levying lower resource tax, the government also directly rewarded companies on encouraging low grade phosphorus ore exploitation. In February 2011, the Ministry of Finance and Ministry of Land and Resource jointly rewarded US$ 1.55 million to the Hubei Dayukou Chemical Co. which has made great advances in mining and using low grade phosphorus ore.

Moreover, the Chinese government will continue to implement a phosphate rock export quote system in the coming years to protect the country’s phosphate resources and to forward a phosphate industry sustainable development.

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