Ethiopian mining is in the bottom of the global industrial mining sector, as Chinese mining activity continues to surge.
The International Mineral Council (IMC) reported Thursday that the mining industry is on a downward trajectory in China.
The Chinese mining sector was valued at $1.4 trillion in 2016.
The country’s central government, the State Council, recently approved a proposal to expand the size of the country’s mining industry by a factor of two.
That’s a drastic increase in the size and scope of mining operations in the past year.
But that growth is only possible through state support.
And, it is the government’s direct involvement that makes the sector vulnerable to China’s economic slowdown.
“The government’s priority has been to increase mining output,” said Jens Schreiber, the CEO of the International Mineral Investment Council.
“But if you increase output you have to do it in a way that will support the local economy.”
The IMC said China’s growth is a result of a growing number of mining firms that have found foreign markets for their ore.
China is the world’s largest producer of iron ore and coal, but its exports have dropped sharply.
The government has not made any effort to diversify its mining sector.
In the past two years, Chinese coal exports have plummeted by 70%.
In 2018, Chinese exports to the U.S. were down 20%, according to the National Mining Association.
China has been one of the world leaders in coal mining.
The IMI estimates that China’s mining sector could shrink by at least 40% in the next decade, but it is uncertain whether that will happen.
China’s central bank has also been pushing for a diversification of mining projects, but experts are skeptical.
“They’re trying to get some of the more profitable projects going, but the rest is in jeopardy,” said Michael Hiltzik, a professor at New York University who specializes in minerals.
The IMCO said China has already increased its mining capacity by more than 40% since 2012.
But China’s new rules, which went into effect in 2020, require that all mines to have a minimum of 10 workers and to have an operating capacity of 3,000 tons per day.