Abstract: Gold occupies a very important position in the current international reserves of various countries. At the same time, with the active gold spot market and futures market, gold has also become an important investment tool for institutions and individuals. In addition, the continuous development of modern science and technology has made the application of gold in the industrial field continue to expand, and has become one of the important industrial metals, which is widely used in electronic computers, communication equipment, aerospace, aircraft and dental materials. According to data from the China Gold Association, the mainland's domestic raw gold output in 2023 will be 375.155 tons, of which 297.26 tons will be mineral.
1. Definitions and Classification
In nature, gold occurs in the form of elemental gold nuggets or gold grains in rocks, underground veins and alluvium, and gold deposits are natural or processed rocks, minerals or ore aggregates that can produce gold. Gold is solid at room temperature, with high density, softness, brightness, corrosion resistance, and is the most malleable metal, second only to platinum in ductility, and is one of the most malleable metals. Continental gold ore resources are divided into two categories: placer gold ore and rock gold mine.
Second, the business model
1. Procurement mode
The external procurement of materials by gold mining enterprises mainly includes mining services such as production and stripping services, shaft and roadway engineering construction services, as well as production materials such as pyrotechnic materials, steel balls, and flotation agents. Among them, explosives, detonators and other pyrotechnic materials and sodium cyanide and other hazardous chemicals are strictly controlled in the market, but the supply is relatively stable. At the time of purchase, the enterprise shall submit an application to the local public security organ in accordance with the relevant regulations, and after approval, it shall purchase and transport it to a monopoly company with the qualification of legally operating civil explosives supplies and equipment in accordance with the prescribed procedures. The market concentration of other auxiliary material suppliers is low, the competition is relatively sufficient, and the supply and demand sides adopt a market-oriented approach to negotiate prices and purchase in batches.
2. Production mode
In terms of industry access, the mainland implements a strict administrative licensing system for gold mining enterprises, and enterprises need to obtain relevant qualifications such as "Mining License" and "Safety Production License" in accordance with the law before they can carry out production and operation. Most of the enterprises in the industry have formed a complete and mature technological process, established a sound production organization and control system, and strictly implemented relevant national regulations to ensure continuous and stable production.
3. Sales model
The products produced by gold mining enterprises are mainly divided into two categories: standard gold and non-standard gold. Standard gold is traded directly by gold mining companies through the gold exchange. Non-standard gold is sold by gold mining enterprises to refining and processing enterprises with the "Certificate of Identification of Enterprises that Can Provide Standard Gold Ingots", and refining and processing enterprises can refine it into standard gold ingots and trade them on the gold exchange.
3. Industry policy
1. Competent authorities and regulatory system
The competent authorities of the gold mining industry include the National Development and Reform Commission, the Ministry of Natural Resources, the Ministry of Emergency Management, the Ministry of Ecology and Environment, etc., and the industry self-regulatory organization is the China Gold Association.
The National Development and Reform Commission is mainly responsible for the research of the development plan of the industry, the formulation of industrial policies, and the approval and filing of investment projects. The Ministry of Natural Resources is mainly responsible for supervising and managing the exploration and exploitation of mineral resources throughout the country, and managing and registering the application and transfer of prospecting and mining rights in accordance with the law. The Ministry of Emergency Management is responsible for the issuance and management of safety production licenses for non-coal mining enterprises, and reviews the design of safety facilities for non-coal mining construction projects. The Ministry of Ecology and Environment is responsible for the management of mining environmental supervision, environmental quality, pollution source monitoring and the formulation of relevant emission standards, and is responsible for supervising and verifying the simultaneous design, construction, and operation of environmental protection facilities for new construction, reconstruction, and expansion projects.
China Gold Association is a national organization officially approved and registered by the former State Economic and Trade Commission and the Ministry of Civil Affairs in 2001. It is mainly responsible for formulating the rules and regulations of the industry, maintaining fair competition of enterprises, protecting the overall interests of the industry, and improving the overall quality of the industry; accepting the entrustment of the government, participating in the formulation of industry development plans, and putting forward opinions and suggestions on economic policies, industrial policies, laws and regulations, etc.; participating in the formulation and revision of national and industry standards, organizing the implementation and supervision, and helping enterprises improve their operation and management; participating in industry statistics, collecting, analyzing, and publishing industry information according to authorization.
2. Industry-related policies
Gold is of great significance to the development of the national economy, and the mainland has implemented a policy of protective mining of gold resources. According to the provisions of the Mineral Resources Law of the People's Republic of China and its implementation rules, mineral resources belong to the state, and the state implements a license system for the exploration and exploitation of mineral resources. In recent years, the state has successively issued a number of policies such as the "Outline of the Strategic Plan for Expanding Domestic Demand (2022-2035)" and the "Opinions on Further Strengthening the Work of Mine Safety Production" to scientifically study and judge the resource needs of economic and social development, combine the construction of ecological civilization, high-quality development, industrial transformation and upgrading, etc., put forward paths and measures to ensure sufficient, stable and sustainable supply of resources, encourage resource recycling, and promote effective protection of resources. Large-scale development and intensive utilization have played a good role in boosting the development of gold mining and dressing undertakings and gold mining enterprises in mainland China.
Fourth, industry barriers
1. Administrative licensing barriers
The mainland has implemented a strict access system for the mining of gold minerals. According to the regulations, enterprises must obtain an "Exploration Permit" for mineral exploration; applications for gold mining and smelting shall comply with the requirements of gold industry planning, industrial policies and relevant state regulations on investment project approval, safety, environmental protection and other management regulations, have the qualifications and conditions suitable for mining gold resources, and obtain "Mining License" and "Safety Production License" in accordance with the law; enterprises involved in explosive operations shall obtain "Blasting Operation Unit License" and other license documents. Enterprises can only carry out mining within the scope stipulated by the state, and must comply with increasingly strict safety production and environmental protection regulations, which has become one of the important barriers for the industry to enter.
2. Resource barriers
Since gold resources are non-renewable resources and relatively scarce, gold ore reserves are the key factor for gold mining enterprises to maintain their sustainable development, resulting in fierce competition for gold mining enterprises to obtain gold ore resources. Due to the constraints of capital and other aspects, some small and medium-sized enterprises occupy relatively few mineral resources, especially for enterprises that do not have independent mines, the stability of product supply is difficult to guarantee, and enterprises with a large number of high-quality resource reserves will take the lead in the industry competition. For new market entrants, access to high-quality mineral resources has become an important barrier to entry into the gold mining industry.
3. Financial barriers
Each production link of gold mining and dressing requires the purchase of a large number of fixed assets, and the construction of mining areas is accompanied by the construction of transportation, water, electricity and other production supporting projects, all of which put forward requirements for the financial strength of enterprises. With the gradual improvement of the country's requirements for mine safety production and environmental protection, the investment of gold mining enterprises in safety and environmental protection will gradually increase. In addition, in order to ensure the reserve of mineral resources, enterprises need to invest a large amount of money in resource exploration or resource acquisition, thus forming a high financial barrier.
4. Technical and talent barriers
Gold exploration, mining, beneficiation and other links have high requirements for the technical conditions of enterprises. Through technological innovation, enterprises can effectively improve geological prospecting capacity, gold ore mining capacity, mineral processing capacity, etc., so as to reduce production costs and improve the competitiveness of enterprises. At the same time, the professional requirements for gold mining and dressing are high, and it is necessary for gold mining enterprises to hire or cultivate talents with strong professional ability to form a relatively complete technical and management team. Therefore, technological innovation and professional and technical personnel have become important barriers to potential industry entrants.
Fifth, the industrial chain
1. Analysis of the industry chain
The upstream of the gold mining industry chain mainly includes raw materials for gold exploration and mining, mainly including explosives, detonators, steel balls and sodium cyanide. Explosives and detonators belong to civilian explosives, and sodium cyanide is a hazardous chemical, which is strictly supervised in the market supply, with a high degree of industry concentration, and the product quality and market price are controlled by the relevant regulatory authorities. In addition, other excipients are market-oriented products, the market supply is sufficient, and the supplier market concentration is low, and the price fluctuation range is relatively small.
The downstream of the industrial chain is the gold smelting and gold consumption industry. The downstream demand for gold includes the demand for gold jewelry, investment gold, central banking, industrial gold, etc., of which the most important domestic gold consumption demand is gold for gold jewelry. Over the years, the rapid economic growth of the mainland, the increasing disposable income of residents, and the continuous advancement of consumption upgrades have led to an increase in demand for gold jewelry products. At the same time, with the advancement of science and technology, the application of gold in industry and cutting-edge science has expanded, which has also contributed to the continuous increase in gold consumption.
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