The selection of exploration projects is the key to the success or failure of Chinese enterprises engaged in overseas mineral exploration. Through the research and analysis of the characteristics of overseas exploration projects, combined with the reality of Chinese enterprises "going out", the author summarizes the following key points to be considered in the selection of overseas exploration projects:

resource endowment

Finding rich and large mines is not only the ultimate goal of overseas mineral exploration, but also the starting point of overseas mineral exploration. Good resource endowment is the primary condition for Chinese enterprises to select overseas exploration projects.

Mineral resources are natural geological bodies that exist in the earth's crust according to certain geological laws and can be developed and utilized by human beings. The distribution of mineral resources in the world is uneven and large and medium-sized deposits are concentrated in important metallogenic zones. Taking copper ore as an example, among the 138 copper deposits with a copper metal content of more than 5 million tons in the world, 86 are in the Pacific Rim metallogenic domain, 20 are in the Tetteth metallogenic domain, and 11 are in the Laaja metallogenic domain. There are 21 Gondwana metallogenic domains (Figure 1). Therefore, in the well-known mineralization zone, the risk of prospecting around the existing production mines or in areas where prospecting breakthroughs have been made in recent years is relatively low, and the probability of finding rich and large mines is also high, which is an important basis for project selection.

However, there are great differences between different industrial types of ore deposits in terms of mineralization scale, requirements for mining and dressing technology, and industrial utilization value. Still taking copper ore as an example, there are many types of copper ore in the world, of which porphyry copper ore contains the most copper, accounting for about 55% of the world's basic copper reserves; followed by sand shale type, volcanic massive sulfide mineral type and copper nickel sulfide type, accounting for about 29%, 9% and 3% of the world respectively. Other copper ore types, such as iron oxide-copper-gold type (IOCG), skarn type, natural copper type, vein type, carbonate type, etc., are less than 4% of the world's basic copper ore reserves. Porphyry copper deposits have become the most important industrial deposit type since the 20th century because of their large-scale mineralization and low-cost open-pit mining. When selecting overseas exploration projects, we try our best to select the types of deposits that are easy to form large-scale deposits, easy to pick and choose, and have high industrial utilization value.

The judgment of the size of the deposit and the grade (quality) of the ore is different from that in China, and the overseas project cannot be measured by domestic standards. China's iron, gold, copper, lead, zinc and other important metal minerals generally present in the majority of small and medium-sized ore deposits, ore grade is low, associated with many components, refractory characteristics. Take iron ore as an example. At present, the average grade of domestic iron ore is less than 30%, which is far lower than that of countries such as Brazil and Australia, and also lower than the world average. It is considered as a rich and large ore deposit in China, and it is likely to be "not considered as a mine" abroad ". Therefore, the project selection is based on the resources of the country where the project is located, with reference to the appropriate international reserve standards, through comprehensive economic and technical evaluation, objective and rational judgment of the true value of the project.

Development conditions

Mineral exploration projects only make sense if they are eventually transformed into economically exploitable mines. Therefore, when choosing a mineral exploration project, it is necessary to consider whether there are conditions for mine development, otherwise even the best mine can only be "dull mine" and cannot be developed and utilized.

Mine development conditions include not only natural and geographical conditions such as hydrogeology, ecological environment, and climate types, but also infrastructure conditions such as water conservancy, electricity, and transportation, as well as human conditions such as labor supply, folk customs, economic development, industrial structure, and military deployment. The above-mentioned development conditions shall be fully considered in the selection of overseas exploration projects abroad.

As far as natural geographical conditions are concerned, mineral exploration and development should be avoided in places with high risk of geological disasters, fragile ecological environment and harsh climatic conditions.

In terms of infrastructure conditions, hydropower is a necessary condition, but different minerals have different requirements for transportation. For precious metals, diamonds, and minerals with extremely high tonnage value, they can be transported by helicopter, and the requirements for transportation conditions are relatively low; for non-ferrous metals with high tonnage value such as copper, lead, zinc, nickel, and tin, they can be used Truck transportation requires higher road infrastructure; and for bulk minerals such as coal, iron ore, bauxite, and potash, the tonnage value is only a few hundred dollars, the requirements for transportation are very high, and a strong transportation system is needed, such as railways and deep-water ports.

As far as human conditions are concerned, indigenous issues and military restricted areas that require special attention. When selecting mineral exploration projects, we must ensure that the location of the project is not in or near the place of special significance to the local aborigines and the military restricted zone, otherwise the exploration work will be difficult to carry out.

investment environment

There are differences in the mining investment environment in different countries and regions, which have a significant impact on the development of mineral exploration projects.

The United States, Canada, Australia, New Zealand, Greenland and other developed countries and regions are rich in mineral resources, have sound legal systems, have mature commercial mineral exploration operation systems, and public welfare geological work services are in place. Mining regulations and policies are conducive to risk exploration and mining development. The administrative procedures are transparent and efficient, and the cost of mineral exploration is easy to control, but the entry threshold is high, environmental protection requirements are high, and aboriginal problems are prominent.

Intelligence, Peru, Argentina, Brazil, Mexico and other Latin American countries occupy an important position in the global mineral exploration market. Copper, gold, silver, lead, lead, nickel, iron, oil and other mineral resources are very rich. Mining laws and regulations and supporting laws are in line with international practice, with a high degree of marketization and relatively low entry threshold. However, in some countries, the tendency of national protectionism is rising and social stability is poor, increase the risk of exploration investment.

ASEAN countries such as Indonesia, Malaysia, the Philippines, Thailand, Papua New Guinea, and Middle East countries such as Turkey, Saudi Arabia, and India also have relatively good prospecting potential. Mining regulations are relatively sound, but the degree of geological work is generally low, and some countries have political stability. Poor, medium risk of mineral exploration investment.

Russia, Ukraine, Kazakhstan, Uzbekistan and other former CIS countries and Mongolia, Vietnam, Laos, Cuba, Romania and other countries are all countries that have transformed from a planned economy to a market economy. The mining laws and regulations are not sound, unstable, and lack Commercial mineral exploration culture, low efficiency of government agencies, unclear administrative procedures, and high risks.

Africa is rich in mineral resources and low labor costs is an important destination for global mineral exploration, but there are generally poor social stability, imperfect mining regulations, and lack of basic geological data, and the risk of mineral exploration is high.

The investment of global commercial mineral exploration funds can reflect the investment environment of mineral exploration in various countries or regions from the side. Areas with more investment in exploration funds usually have a better investment environment and less risk (Figure 2), but they cannot be generalized and need to be comprehensively analyzed and judged.

In addition, some research and consulting agencies will regularly publish analysis reports on mineral investment environment in various countries, such as the University of Dundee Energy Mining Law and Policy Research Center (CEPMLP), the Canadian Metal Industry Group (MEG), the University of Denver Natural Resources and Environmental Law Group (NRELP), the World Bank Mining and Industry Group (Mining and Mining Unit), and the Swiss Raw Materials and Minerals Group (RMG). The reports of these research institutions can be used as a reference for Chinese enterprises to select countries for overseas mineral exploration.

Market trend

The global commercial solid mineral exploration and investment market has a certain periodicity, which is positively correlated with the trend of gold price (Figure 3). Grasping this cyclical change law and trend can help enterprises make correct investment decisions.

The internal motivation of the cyclical change of the exploration market is that the investment of exploration funds will change with the change of the supply and demand of mineral products. It is a long cycle for a deposit to be discovered, explored, pre-feasibility study, feasibility study, mine construction to mine production, usually more than 10 years. When the supply of mineral products exceeds demand and the price rises, it will stimulate the increase of exploration investment, so that new deposits are discovered and put into production, the supply of mineral products is surplus, the price of mineral products is down, and the enthusiasm for exploration investment also decreases. Due to the limited life of the mine, when the production capacity of a number of mines decreases, there will be a shortage of mineral products again and prices will rise, which will lead to an increase in investment in mineral exploration. However, global macroeconomic trends, financial market fluctuations, emergencies and other systemic external factors tend to interfere with the normal mining cycle and change its basic trend.

When the exploration market is in the rising stage, the enthusiasm of global exploration investment is high, and the funds flowing into the exploration market increase, and the requirements for exploration projects are also reduced. The "green space projects" with low exploration degree and some boundary grade projects with poor quality can also obtain exploration financing, thus expanding the scope of project selection. But at the same time, it is also prone to the phenomenon of "fish-eyed mixed pearls" in the exploration market, disorder and overestimation of the value of the project.

When the exploration investment is in the downward stage, the enthusiasm of global exploration investment decreases, the funds to enter the exploration market are insufficient, and the requirements for exploration projects are also increasing. The exploration degree is higher and the prospecting prospect is clear. Projects that may enter the production stage to generate cash flow in the short term become the focus of exploration investment. Primary exploration companies have suffered heavy losses, at the same time, it also breeds more opportunities for project mergers and acquisitions.

In a word, the cyclical changes in the commercial mineral exploration market make mineral exploration investment present different characteristics and opportunities at different times. Whether in the upward stage of the exploration cycle or the downward channel, suitable exploration investment objects can be found. The key lies in the accurate judgment of the trend of cyclical changes.

Mineral characteristics

There are many kinds of mineral resources. China alone has discovered more than 170 kinds of minerals, and nearly 240 kinds of sub-minerals are calculated. 156 kinds of minerals have been identified, including 10 kinds of energy minerals, 54 kinds of metal minerals and 92 kinds of non-metallic minerals. The global distribution of various mineral resources, the supply and demand situation, the conditions of exploration and mining, and the degree of favor of the international mineral risk exploration capital market vary greatly. Chinese enterprises engaged in offshore risk prospecting, the choice of minerals is an important factor that can not be ignored.

First of all, for the bulk minerals with huge global resource reserves, high degree of international monopoly, harsh development access conditions, and a small proportion of the international risk exploration capital market, such as coal, potash, and iron ore, it is difficult to obtain competitive high-quality projects., We should be very cautious when investing in overseas venture exploration of these minerals.

Secondly, base metals (base metals) such as copper, lead, zinc and nickel, which are large in industrial consumption, complex metallogenic conditions, high in value per ton of ore, and favored by the international risk exploration capital market, can be used as the focus of overseas risk exploration, and the target is targeted at high-quality projects with industrial types, high-grade and good mine development conditions that have the conditions for forming large-scale deposits and are easy to mine.

Third, gold, as a hard currency, is the focus of global mineral risk exploration. It has always been at the top of the global risk exploration investment list, accounting for more than 40% of the total exploration budget of non-ferrous metals (plus diamond) in the world. There are many projects and they are widely distributed. However, the real high-quality projects are still one in a hundred, which requires "discerning eyes and pearls" and careful due diligence on preliminary projects.

Fourth, rare, rare, rare earth and some "small metals" as additives generally have the characteristics of large market price fluctuations and easy to form monopoly. Generally speaking, the risk is high. Among them, rare earth, tungsten, lithium and other minerals, because of their important position in strategic emerging industries or national defense science and technology, the international exploration market is also paying more and more attention to them, so we can consider adding some appropriately to the investment portfolio of overseas projects.

Fifth, uranium is a special mineral that is both loved and feared. I love it because it is an important raw material for nuclear power clean energy, and it is a magic weapon for mankind to solve the shortage of energy supply and control global warming; it is afraid that it is the security threat that its huge radiation brings to mankind cannot be completely ruled out. Affected by this complex sentiment and some nuclear power plant leaks, the price of uranium mines and the enthusiasm for investment in uranium mines in the international exploration market have shown greater volatility in recent years.

Sixth, diamond in the global mineral exploration investment, although it occupies a certain proportion, due to the increase in attention to base metals, in recent years, the proportion of global exploration investment tends to decrease. Diamond has high requirements for exploration technology, low success rate of prospecting and high risk. When enterprises choose overseas exploration projects, if they do not have rich experience and technology in diamond prospecting, they need to enter carefully.