Investment in stone mines begins with the search for mining resources with economic value. Therefore, prospecting plays a primary role in the development of stone mines. Exploration risk refers to the probability that the economic value of a mine cannot be completely determined based on the characteristics of the mine. To solve exploration risks, professional research institutes or geological prospecting institutes should be hired to reduce the risk of later investment in the mines. Through professional exploration, it is not only for its reserves to explore. At the same time, reasonable planning should be made for its later mining, transportation, production, and processing. In 2020, Huada Stone Mining Research Institute was commissioned by China National Building Materials Group to conduct a professional survey of the XX granite mine in Ethiopia and issue a report.
1. Stone mine operation risks.
Mine output, yield rate, etc. will lead to changes in operating costs. The level of operation and management directly affects the realization of the expected benefits of the mine project. After the development and progress of China's stone industry in recent years, mining equipment and technology have long been ahead of the world, but at the same time, strengthening corporate management capabilities, mastering advanced mining technology, and proficient and correct use of mining equipment and tools can enhance the comprehensive competitiveness of the company.
Large investment and long cycle are the salient characteristics of investment in stone mines. In addition to investment in capital and mining rights, talents are always a topic that cannot be avoided in business operations. This is the case at home, and even more so because of uncertain factors abroad. Cultivating and reserving mine operation and management talents will be the top priority of the company's future development. The establishment of Huada Stone Mining Research Institute will provide all-round systematic guidance and talent training for domestic and foreign stone mining enterprises from operation, management, and mining technology.
2. Infrastructure investment risk.
Since many overseas mining projects to be invested are located in underdeveloped areas, the overall infrastructure is relatively backward, and the necessary water, electricity, transportation, railway, port and other conditions for mining development are not available, and investors need to make their own investment. And these infrastructure investments will make the amount of investment uncontrollable and cause heavy financial pressure. At the same time, the construction, production and living costs of mines are generally high. The cost of production and living is at least 1.5 times the domestic cost. Africa and South America are 2 to 4 times that of China, and 5 to 6 times in some remote areas.
3. The risk of environmental protection.
Another notable feature of stone mines is the inevitable damage to the environment and ecology. With the development of social economy and the improvement of living standards, more and more countries and international organizations pay attention to environmental protection; the requirements for environmental protection are also getting higher and higher, and the environmental protection costs of mineral projects will continue to increase. It may even be forced to close due to environmental issues. The risk of environmental protection is a problem that Chinese companies tend to overlook when they invest in overseas mining, especially in countries and regions with less developed economies. However, with the development of the economy, some international environmental protection organizations have become more and more influential, and their attention to the environment will soon increase. For environmental protection, it is necessary to study and evaluate the environmental status and environmental impact during the feasibility study stage. Environmental protection can be implemented using our national standards or developed countries' standards. As I know, the Jintaide (Laos) marble development project, at the beginning of the project construction, carried out environmental protection in accordance with China's environmental protection policies and standards, and at the same time assisted the Lao government to establish national standards for environmental protection in the stone mining industry.
4. Labor and employment risks.
There are big differences in labor and employment at home and abroad. In many foreign countries, the labor union system is relatively mature, and labor unions play a very important role in labor protection. Therefore, local labor laws and regulations should be implemented after overseas investment, and related risk prevention should be carried out. At the same time, many overseas-invested companies hire professional mine managers, construction personnel, and translators from the country to deploy to the project location, and only hire a certain percentage of low-tech positions (such as drivers) in the local area.
Of course, in some relatively underdeveloped countries to invest in mines, local abundant and cheap human resources are also a advantage.
In summary, with the development of China's stone industry and the continuous enhancement of corporate strength, overseas investment and integration of domestic and foreign resources have become an inevitable trend. At present, under the background of global epidemic control, it has caused many inconveniences to the travel and management of overseas mining investment companies. After experiencing the joys and sorrows of overseas investment and COVID-19 epidemic, Chinese stone companies will also become more mature and powerful and be able to actively and prudently participate in overseas mine investment with a peaceful attitude. As the China's first research institution focusing on stone mines, Huada Stone Mining Research Institute will continue to excavate, train, and export management and technical professionals for the stone mine industry, laying a solid foundation for China's stone mines to go global.
