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China overtook South Africa to become the world’s largest gold producer in 2007 but a large part of the country is still unexplored, says “China Gold Report 2008”, a market research report.

As per the report, China has a strong position in gold industry in terms of consumption too. Gold demand in the country (Greater China) grew by around 24% in 2007, surpassing the US to become the world’s second largest market for gold jewelry.

This report analyzes the gold industry of China in context of global industry. The industry analysis has been done on the basis of the country’s economic stability, gold reserves, production, consumption level, and future growth prospects. It outlines the market trends, growth attractions, challenges and future prospects for the industry. The forecast given in this research study is based on a correlation between past market growth and growth of such base drivers as demand, production and consumption.

Key Research Findings

China is expected to increase its annual gold output by around 7% to nearly 300 Metric Tons this year, which would see it keep its number one position in 2008 as well.
Current gold consumption in the country is mainly centered in the low-end or middle-level jewelry products for the purpose of fashion and decoration. But changing allocation of financial assets will drive the growth of gold market in the country.
Jewelry demand in Mainland China reached 302 Tons in the year 2007, overtaking the US and making China the world's second-largest retail jewelry market after India.
Transformation in the gold industry of China is opening lucrative opportunities for foreign players.
Key Issues & Facts Analyzed in the Report

What is status of gold consumption by respective sectors globally?
What is the production and consumption situation of gold in China as compared to other countries?
What are the potential growth areas and challenges for the gold industry in China?
What are the prospects for the industry?
Key Players Analyzed in the Report

This section provides an overview of key facts of several national and international players, like China National Gold Group Corp., Shandong Gold Mining Co. Ltd, Sino Gold, and Golden China, operating in the country.

Research Methodology Used

Information Sources
Information in this report has been sourced from books, newspapers, trade journals, and white papers, industry portals, government agencies, trade associations, monitoring industry news and developments, and through access to more than 3000 paid databases.

Analysis Methods
The analysis methods used to analyze the facts and figures in this report include ratio analysis, historical trend analysis, linear regression analysis using software tools, judgmental forecasting, and cause and effect analysis.

Table of Contents :-

1. Analyst View

2. Global Gold Industry - An Overview
2.1 Reserves
2.2 Production
2.3 Consumption
2.4 Region
2.5 Investments

3. China – The Leading Gold Producer

4. Major Growth Promoters
4.1 Economic Indicators
4.2 Foreign Investment
4.3 Consumption Pattern
4.4 Inflation
4.5 Consumer Preferences

5. Industry Performance Statistics
5.1 Reserves
5.2 Production
5.3 Consumption
5.4 Trading
6. Potential Growth Areas
6.1 Industry Transformation
6.2 Cost Competitiveness in Mining
6.3 Domestic Jewelry Market
6.4 Mining Opportunities

7. Industry Roadblocks
7.1 Regulatory Barriers
7.2 Autonomy
7.3 Tariffs

8. National Gold Players
8.1 China National Gold Group Corp
8.2 Lingbao Gold
8.3 Shandong Gold Mining Co., Ltd

9. Foreign Players
9.1 Sino Gold
9.2 Eldorado Gold
9.3 Minco Gold
9.4 Golden China Resources Corporation

List of Tables :-

Table 2-1: Global - Top 10 Gold Reserves (in Metric Tons), Q4 2007 & Q1 2008
Table 2-2: Global - Identifiable Gold Demand (in Metric Tons), 2005-2007
Table 2-3: Global - Identifiable Gold Demand (in Million US$), 2005-2007
Table 2-4: Global - Gold Supply-Demand Situation (in Metric Tons), 2005-2007
Table 3-1: Traditional vs Emerging Countries - Gold Production (in Metric Tons), 1997 & 2007
Table 3-2: Global - Gold Demand by Countries (in Metric Tons), 2007
Table 3-3: Global - Growth in Gold Demand by Country (%), H1 2008
Table 4-1: China - Average Distribution of Financial Assets of Urban Residents (in Yuan)
Table 5-1: China - Top 10 Gold Mining Regions (%), Q1 2008
Table 5-2: China - Gold Production in Top Six Provinces (in Tons), 2007
Table 6-1: China - Gold Industry Transformation
Table 6-2: China - Gold Cost Competitiveness w.r.t Australia

List of Figures :-

Figure 2-1: Global - Gold Production* (in Metric Tons), 2005-2007
Figure 2-2: Global - Identifiable Gold Demand by Segment (in Metric Tons), 2005-2007
Figure 2-3: Global - Gold Demand by Industrial & Dental Segment (in Metric Tons), 2005-2007
Figure 2-4: Global - Gold Production by Region (%), 2007
Figure 2-5: Global - Gold Investment by Segment (in Metric Tons), 2005-2007
Figure 3-1: China - Gold Production w.r.t South Africa (in Metric Tons), 2007
Figure 4-1: China - Real GDP Growth (%), 2000-2007
Figure 4-2: China - GDP Per Head (in US$), 2001-2007E
Figure 4-3: China - Personal Disposable Income (in Million US$), 2003-2007E
Figure 5-1: China - Gold Reserves (in Metric Tons), Q3 2002 & Q2 2008
Figure 5-2: China - Gold Production by Province (%), 2007
Figure 5-3: China - Gold Production (in Metric Tons), 2006 & 2007
Figure 5-4: China - Gold Production (in Metric Tons), 2007 & 2008F
Figure 5-5: Greater China - Gold Demand (in Tons), 2006, 2007 & 2010F
Figure 5-6: Mainland China - Gold Demand (in Tons), 2006 & 2007
Figure 5-7: Mainland China - Gold Demand by Use (in Tons), 2007
Figure 5-8: China - Jewelry Export by Province (%), Jan-Nov 2005
Figure 5-9: Panyu - Contribution in China Jewelry Processing Industry (%), 2006E
Figure 5-10: Guangdong - Number of Jewelry Manufacturing Enterprises (2001 & 2006)

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The US Mining Report provides industry strategists, service companies, company analysts and consultants, government departments, trade associations and regulatory bodies with It's independent, 5-year mining industry forecasts and competitive intelligence on leading mining companies in US.

Each Report has been researched at source, and features latest-available data and forecasts to end-2012 covering all headline indicators for mining; company rankings and competitive landscapes covering mining exploration and production; and analysis of latest industry developments, trends and regulatory issues.

Key Benefits

• Use It’s independent 5-Year industry forecast on US
  to test other views - a key input for successful budgeting and planning in this strategic mining market.

• Target business opportunities and risks in US's mining sector
  through our reviews of latest mining industry trends, regulatory changes, and major deals, projects and investments in US.

• Exploit latest competitive intelligence & company SWOTS
  on your competitors and peers in US through our mining company rankings.

Executive Summary

The US is the world's largest economy, and mining is a significant US industry. According to the US Geological Survey (USGS), in 2005 the value of mining sector output was US$73.8bn, which It calculates as representing 0.6% of US GDP. Of this, total industrial minerals accounted for US$35.2bn, coal represented US$22.3bn and metal mining represented US$16.3bn. By individual commodities, after coal the most important were aluminium, copper, molybdenum and gold. The figure of 0.6% of GDP is a rather narrow measure of the industry. The USGS has also separately estimated the value of all mineral materials processed in the US at US$478bn. It said that this production in 2005 came from 1,879 coal mines and facilities, eight uranium mines and 1,965 mines and processing plants for 74 types of non-fuel minerals and materials.

The Bush administration, concerned about the country's reliance on imported energy, has called for a major increase in the supply of traditional fossil fuels and nuclear energy in a bid to head off a looming energy crisis. This has important implications for coal, which currently accounts for roughly one-third of total US energy supply and, with reserves equivalent to 250 years of production at current rates, is one of the country's most plentiful energy sources (although also one of the dirtiest in environmental terms).

US Energy Secretary Sam Bodman on February 5 said the Energy Department wanted to more than double the loan guarantees it could offer for new clean-energy projects, and nudged U.S. lawmakers to approve its existing loan program. The department currently has the authority to make US$4bn in loan guarantees, which is a promise from the government to step in and repay loans made by private lenders in case of default for energy projects. Department officials said the loan guarantees were needed to help offset higher risks of building cutting-edge projects such as refineries that convert wood chips to fuel or low-emission coal-burning power plants.

On a global level, It tracks and forecasts the Goldman Sachs Industrial Metals (GSIN) index, whose movements are then incorporated into our expectations for the value of output/export of specific metals.

Our end-2006 forecast for the GSIN was, at 440, just 1.1% below the actual figure of 445. We have slightly revised our 2007 forecasts in line with our view on global growth, which we see falling to 4.6% in 2006 from our expectation of 5.1% growth last year. Industrial metal prices look particularly weak at present, and we set an end-year target of 380 for the GSIN, a 13.6% fall.

Our forecast for the US is consistent with this environment in which metals and minerals prices fall back over the next couple of years, but nevertheless remain on something of a high plateau. The most important activity – coal mining – will continue to be influenced by strong energy demand and the current and most likely future government's desire to diversify away from excessive reliance on oil. The key here will be the development of cleaner coal technologies, which we expect to take another four to five years.

For our 2007-2011 forecast period, we expect coal production to rise by an average of 2% per annum, reaching a total of 1,270mn short tonnes by 2011. The value of that production will rise to just less than US$36bn by the end of the period. The copper sector on the other hand will be influenced by the current slowdown in the US housing market, and we expect mine production to grow by a modest annual average of 0.4% (which will nevertheless be an improvement on the average fall of 2.7% registered over the preceding give years). Value will reach US$6.1bn by 2011. Gold output will continue falling (-5.0% on average across the forecast period) while iron ore will be on an upward trend (by 2.8% per annum).

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