Mining fever of the popular imagination is all about the gold rush – the chaos of thousands of prospectors descending on places like the Klondike in the Yukon or the Sierra Nevada in California in hope of making their fortunes.
Where once there were panhandlers, there are now ‘Heads of Exploration’. The battle for mineral resources today is a lot less romantic – and less about gold than the raw materials needed to fuel industrial economies. Major multinationals and, increasingly, sovereign governments struggle for access to scarce commodities.
So a feature in the Southern Weekly earlier this month, describing the exploits of the “Guanyang Gang”, seems like a throwback to the old days of mining capitalism at the frontier. From the most impoverished of beginnings, the Gang has established a reputation as a leading domestic force in the mining of non-ferrous metals like tin and bauxite.
Guanyang is a small county of 270,000 people in the northeastern part of Guangxi. The locals got their first taste of future rewards with the opening of the state-owned Lamu tin mine in the early 1950s. Even back then, the mine offered lucrative employment. Jiang Jingchen, who began working as a 12 year-old more than half a century ago, still chuckles with delight in recalling that some workers earned more than the local party secretary.
Where Gang members really began to profit was in copying the techniques learned in their day jobs to dig shafts (often illegal ones) of their own. In these low-tech operations the ore was cracked manually, then filtered through a bamboo griddle, and sifted with water in wooden basins.
It sounds primitive but it was an essential education for the expertise now concentrated amongst the Gang’s 30,000-strong community. “We Guanyang people are able to determine the grade of the ore and give the price with the naked eye alone,” boasts one mine owner.
The Gang took these skills further afield. In a prospecting trip to a mine in Yunnan, for example, they found themselves in a bidding war against a group from another province. Whilst the rival prospectors took the ore back to their provincial capital for examination, the Guanyang team made the inspection on the spot. “When they came back, we’d already settled the deal,” one owner laughs.
In the early 1990s the Gang had a Klondike moment of its own, with the discovery of rich mineral resources at Nandan Dachang in Guangxi Zhuang Autonomous Region sparking the “chaotic era of getting rich overnight.” Thousands of Guanyang miners fought (sometimes literally) with groups from Jiangxi and Yunnan to win contracts on state-owned excavations. The Gang dusted down some of its tested tactics, digging shafts into areas abandoned by the state-owned mines, and even allegedly bribing its way into existing ones.
By the late 1990s the Nandan government had succeeded in forcing out most of the Guanyang locals. But the Gang had diversified and by 2005 its stakes in a range of mining operations across the country were paying rich dividends. As the price of non-ferrous metals began to soar on international markets, luxurious villas began to appear across the county. BMWs and Mercedes began to appear on Guanyang’s dirt roads.
But along with wealth came increased scrutiny, especially from a central government now determined to prevent the level of commercial “leakage” suffered during the cowboy 1990s. New mining permit regulations required safety assessments and environmental impact reports. The Gang found itself locked out of potential projects.
So it switched tack again, focusing on recovering ore from mine tailings (the scrap heap of materials not deemed worth processing). It also begun to look overseas, shipping ore from frontier markets like Vietnam, Myanmar and North Korea back to Guanyang for processing.
Today, the Weekly reports, Guanyang town’s smelters, machinery workshops and ore processing plants make it look like a heavy-industrial outpost in the wilderness.
But the Gang’s ambitions are hardly provincial. According to the Southern Weekly, the coffee shops on the town’s Mining Machinery Street buzz with business chatter, and the beeps of the incoming mobile phone alerts that bring the latest commodity prices from the London Metal Exchange.
“Wherever there are ores, there are the footprints of the Guanyang Gang,” one of the bosses boasts.
© ChinTell Ltd. All rights reserved.
Sponsored by HSBC.
The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.