Editor's note: In early December 2021, the Central Politburo meeting proposed to ensure energy and mineral security during the review of the national security strategy. This is the first time that such a high-level conference has put mineral security and energy security on par, which means that mineral security has been elevated to a national strategy.
And this year's government work report will also enhance the domestic resource production guarantee capacity, accelerate the exploration and development of resources such as oil and gas, and minerals as one of the key work priorities for 2022.
Behind the emphasis on key minerals is the increasing demand for them, such as the global energy transition. With the increasing market expansion of industries such as electric vehicles, energy storage, and chips, the demand for raw materials is also growing. However, in the international market, the concentration of key mineral supplies as raw materials is high and the investment cycle is long, resulting in a supply-demand gap and supply stability issues that urgently need to be addressed.
In fact, the international community has already begun to pay attention to and layout key mineral resources. In November 2021, the United States Geological Survey revised its list of key minerals, separating "rare earth elements" and "platinum group elements" and adding nickel and zinc (+20, -5! The US government has released a new version of the 50 key mineral list! Click to view details). The final draft of the directory was released in February 2022, marking the second revision in three years by the United States. In addition to the United States, countries and regions such as Japan, the United Kingdom, the European Union, Russia, and Australia have also established key mineral lists in order to layout and safeguard key minerals.
In this context, it is not difficult to understand why the representatives and members of the two sessions are concerned about key minerals. The mining industry has sorted out the proposals and motions put forward by some representatives and committee members. Let's take a look at what issues the representatives and committee members are concerned about and what suggestions they have put forward?

Ding Shiqi, deputy to the National People's Congress and deputy general manager of Tongling Nonferrous Metals Group, believes that key mineral resources in the new energy industry are an important material basis for achieving China's "double carbon" goal, and suggests further improving the supply guarantee system of key mineral resources in China's new energy industry.

Ding Shiqi stated that given the rapidly increasing demand for energy rich mineral resources such as copper, lithium, nickel, and cobalt globally and their strategic importance, the national mining management department should coordinate and plan accordingly. He suggested that policies related to the development of key mineral resources in new energy should be further improved.
Ding Shiqi suggested that the government should strengthen its leading role in the allocation of key mineral resources for new energy. He stated that the supply guarantee of key mineral resources also involves the security of national strategic emerging industries. In the process of promoting ecological civilization construction and "dual carbon" action in China, the development and utilization of key mineral resources in new energy must also shift towards green and low-carbon. The government regulatory authorities should strengthen their leading role in the allocation of key resources, and give priority to allocating key mineral resources to large backbone enterprises with strong technological capabilities, ensuring efficient and intensive development and utilization of key mineral resources, and effectively and prudently protecting the ecological environment.
In addition, Ding Shiqi suggested that support policies for the entire industry chain of key mineral resources in new energy should be increased. The state should formulate corresponding support policies in the production, processing, key technology research and development, intelligent production and manufacturing of key mineral resources. We will vigorously support "specialized, refined, and innovative" enterprises in the field of new energy in areas such as finance, taxation, and technological innovation.
To maintain the good development momentum of China's new energy vehicle industry and actively cultivate the new energy vehicle market, Ding Shiqi suggested delaying the subsidy policy for new energy vehicles and continuing to exempt the purchase tax and vehicle tax until 2025. At the same time, we will vigorously accelerate the construction of supporting facilities for new energy vehicles to ensure the healthy and rapid development of the industry.

Xue Guanglin, a member of the National Committee of the Chinese People's Political Consultative Conference and founder of Guanghui Petroleum, suggested establishing a special fund for strategic materials to strengthen the reserve of strategic materials such as oil, natural gas, coal, and iron ore.
Xue Guanglin pointed out that strategic materials such as oil, natural gas, coal, and iron ore are the lifeblood of the national economy and will directly affect national security, sustainable economic development, and social stability. Especially in recent years, the significant fluctuations in commodity prices have had a significant impact on China's energy and strategic material supply pattern.
Xue Guanglin stated that in 2021, China's crude oil imports reached 513 million tons, with a foreign dependence rate of 72%; The import volume of natural gas is 169.9 billion cubic meters, with an external dependence of about 42%; The import volume of coal increased by 6.6% year-on-year, reaching 323 million tons, ranking first in the world; The import volume of iron ore is 1.12 billion tons, with a high degree of external dependence of 82.3%. In the face of increasing import dependence, it is necessary to have sufficient strategic material reserves in order to effectively cope with international market fluctuations and avoid rising costs of strategic material supply in China due to supply shortages, price surges, geopolitical conflicts, and other reasons.
Xue Guanglin suggested that the national finance allocate 1 trillion yuan to establish a special fund for strategic materials, with several specialized companies operating under the responsibility of the National Development and Reform Commission and the National Energy Administration, to carry out market-oriented operation mode. 20% of the funds should be used to expand the investment and construction of storage and transportation infrastructure such as reserve warehouses and oil and gas pipelines, and the remaining 80% of the funds should be used for "low absorption". Whenever strategic resources are low-priced, imports should be increased, and when they rise sharply, they should be promptly "sold high" to ensure the security of national energy supply and safeguard the national economic construction.

Wang Zhiliang, a member of the National Committee of the Chinese People's Political Consultative Conference, put forward suggestions on accelerating the development of key marine minerals in China.
Wang Zhiliang pointed out that the current "dual carbon" target has become an important lever for leading China's economic transformation internally and demonstrating its great power responsibility externally. The energy transition is in full swing, and the concept of "green mountains and clear waters are as valuable as mountains of gold and silver" has deeply penetrated people's hearts. As more fields begin to use and popularize new energy, the world's demand for key minerals continues to increase, especially lithium, nickel, cobalt, copper, zinc, and so on. Many key minerals are more abundant in the ocean, therefore, the country needs to coordinate relevant departments and industries to effectively research and develop key minerals in the ocean.
Wang Zhiliang believes that China has initially formed the design and equipment research and development capabilities for deep-sea polymetallic nodule mining systems, while also considering the research and development of cobalt rich crust and polymetallic sulfide mining technology and equipment. However, it also faces bottlenecks in basic theory, core technology, and equipment.
Wang Zhiliang stated that onshore mineral resources are limited and the supply-demand imbalance continues to widen, while the potential for marine mineral development is enormous. Multiple institutions predict that the total reserves of nickel, cobalt, and manganese in the ocean are tens to thousands of times higher than their corresponding reserves on land. By 2030, the global deep-sea mining market is expected to grow from $650 million in 2020 to $15.3 billion, with an annual growth rate of up to 37.1%. In addition, the green transformation of energy has become the main driving force for the growth of demand for some key minerals; The production and supply capacity of key mineral resources on land is subject to multiple constraints; The supply-demand gap will exist for a long time and have an expanding trend, therefore, he proposes the following suggestions:
 
Secondly, it is suggested that relevant national departments take the lead in conducting comprehensive investigations and research on key mineral resources in China's territorial waters and exclusive economic zones, to understand the marine resource potential and economic value of key minerals in China, and to study development plans in the high seas.
Thirdly, it is suggested that relevant national departments accelerate the research and development of basic theories, core technologies, and key equipment for the development of key marine minerals, overcome scientific research difficulties, and establish demonstration projects for modern mining and commercialization.
Fourthly, it is recommended that relevant national departments coordinate with advantageous enterprises to explore and develop key marine minerals. To break down barriers and administrative divisions between industries and enterprises, and strive to gather advantages for efficient development.
The fifth suggestion is for relevant national departments to study creating a favorable external environment and international institutional support for the development of more key minerals in the high seas.

He Wenbo, member of the National Committee of the Chinese People's Political Consultative Conference, Secretary of the Party Committee of the China Iron and Steel Association, and Executive Chairman, will submit proposals such as "Proposal on Implementing the 'Cornerstone Plan' to Enhance China's Iron Resource Guarantee Capability" at the Two Sessions, aiming to further enhance China's iron resource guarantee capability.
According to He Wenbo, the steel industry is an important foundational industry of the national economy. At present, China's steel industry has built world leading production process equipment, with a steel production and consumption scale of 1 billion tons, and a large demand for iron resources. Overseas mines, domestic mines, and scrap steel are the three main sources of iron resources in China's steel industry. In 2021, China's steel production was 1.035 billion tons, imported iron ore was 1.124 billion tons, domestic iron concentrate was 285 million tons, and scrap steel consumption for steelmaking was 230 million tons. Currently, 61% of the iron resources required for crude steel production come from imported iron ore, compared to 62% in the previous year. The insufficient domestic supply and high dependence on overseas imports have posed a threat to the development and industrial foundation of the steel industry due to the weak upstream supply chain of steel.
The country attaches great importance to the security of strategic mineral resources. In the future, China's steel demand intensity will continue to be at a high level, and the high dependence on foreign iron resources will have a negative impact on the stable operation of the steel industry chain and supply chain. Measures must be taken to fundamentally improve it, "said He Wenbo.
It is understood that the theme of the "Cornerstone Plan" is to use 2-3 "Five Year Plans" to effectively change the composition of China's iron resource sources and fundamentally solve the problem of resource shortages in the steel industry chain.
The proposal to be submitted by He Wenbo this time mainly includes three aspects:
One is to open up a green approval channel and accelerate the development of domestic iron ore resources. The National Development and Reform Commission, together with the Ministry of Industry and Information Technology, the Ministry of Natural Resources, the Ministry of Ecology and Environment, the Ministry of Emergency Management and other departments, has formed an inter ministerial coordination and promotion system to urge local governments to establish corresponding work mechanisms, strengthen comprehensive coordination, open up green channels, solve problems in project approval and development and construction, promote the development of important mineral belt resources, and ensure that a number of projects with superior resource endowment, large scale, and strong cost competitiveness are completed and put into operation. Adjust and optimize the collection method of mining rights transfer income, reduce the value-added tax rate of iron mining enterprises, expand the scope of value-added tax deduction, and reduce the operating burden of iron ore enterprises. Intensify financial support, establish special funds and national level technology centers, strengthen key research and development of cost reduction technologies, and actively promote the comprehensive utilization of iron ore resources.
The second is to prevent investment risks and accelerate the development of overseas iron mines. It is suggested that the country and relevant departments attach great importance to the development of overseas iron ore resources, support relevant enterprises to accelerate development and construction, solve financing obstacles, and provide financial support on the premise of effectively preventing investment risks and ensuring benefits. Adhering to opening up to the outside world, strengthening and developing cooperation with the international mineral resources industry remains an important principle that should be consistently upheld.
The third is to support the development of the scrap steel industry and accelerate the recycling of scrap steel resources. Suggest relevant departments to promote the concentration of the scrap steel industry and cultivate leading enterprises; Promote the improvement and enhancement of the recycling, processing, distribution, and circulation system of scrap steel resources; Implement the value-added tax policy for comprehensive utilization of resources, etc; Study the value-added tax preferential policies for imported recycled steel raw materials to create conditions for expanding imports.

Jiang Weiping: Suggestions to accelerate the development and utilization of lithium mineral resources in Sichuan and strengthen international economic and trade exchanges and cooperation

Jiang Weiping, deputy to the National People's Congress and chairman of Tianqi Lithium, believes that accelerating the development and utilization of lithium resources in Sichuan Province is an important measure to ensure the safety of the supply chain of important national strategic resources and achieve the national goal of "double carbon". He suggested actively guiding enterprises with development conditions to accelerate the transformation of resources into production capacity, promote the large-scale, intensive, and green development and utilization of lithium mineral resources, and orderly promote the construction of national lithium resource bases.
Jiang Weiping pointed out that China has become the world's largest producer and consumer of basic lithium battery materials. China's lithium resource reserves are among the top in the world, and the variety of resources is relatively abundant. However, there is a shortage of domestic lithium raw material supply and a high degree of external dependence. Jiang Weiping believes that accelerating the green and efficient development of lithium resources in China is of great strategic significance for ensuring the development of the lithium battery industry.
Jiang Weiping pointed out that Sichuan has abundant lithium mineral resources, with the largest pegmatite type spodumene deposit in China, located in the Ganzi Prefecture of Sichuan Province. The lithium mineral resources have a large reserve scale, high grade, and great potential for comprehensive development and utilization. The proven reserves of lithium resources have reached 1.8877 million tons. The Lijiagou spodumene mine in Jinchuan County, Aba Prefecture, Sichuan Province has a proven lithium resource reserve of about 510000 tons, and the lithium mineral resources in the Sizemuzu area are nearly 520000 tons. Therefore, accelerating the development and utilization of lithium mineral resources in Sichuan Province is an important measure to ensure the security of the national strategic resource supply chain and achieve the national "dual carbon" goal. It is also an inevitable choice to accelerate the transformation of Sichuan's resource advantages into production capacity advantages, fully utilize the window period of energy structure reform, and better promote economic structural adjustment and energy consumption transformation.
Jiang Weiping suggested establishing and improving a guarantee system for the development and utilization of mineral resources. Improve the guiding documents for the development and utilization of mining rights in mining areas, accelerate the extension, clearance, and cancellation of various types of mining rights that have not been built, have been shut down for a long time, have not applied for renewal upon expiration, have been shut down, or have not been cancelled. Optimize and improve industrial development policies in ethnic areas of northwest Sichuan, actively guide enterprises with development conditions to accelerate the transformation of resources into production capacity, promote the large-scale, intensive, and green development and utilization of lithium mineral resources, and orderly promote the construction of national lithium resource bases.
In addition, in terms of international economic and trade exchanges, Jiang Weiping also suggested strengthening cooperation and exchanges at the government level, accurately grasping the window period of the world economic recovery strategy, carrying out practical cooperation in areas such as smooth international industrial and supply chains, enhancing the image of Chinese funded enterprises, and safeguarding their development rights.
Regarding the potential political, economic, and legal risks that may arise in the early, middle, and later stages of strategic resource mergers and acquisitions projects, Jiang Weiping suggests that government departments and industry associations should strengthen guidance and assistance to "going global" enterprises, establish close communication mechanisms, and actively coordinate and resolve relevant issues. At the same time as resolving risks related to international mergers and acquisitions, further enhance the ability of Chinese enterprises to "go global".