Thoughts on the development of small and medium-sized mining companies

Shiwei Zhang

(Henan Xinhui Mining Co., Ltd.)

This year marks the 60th anniversary of the founding of People's Republic of China (PRC). Geological work has gone through 60 years of ups and downs with the Republic of China. After several generations of hard work and unremitting efforts, geological work has laid a resource foundation for national economic and social development. It has been fully affirmed by the party and the state.

At present, China's modernization is facing a shortage of mineral resources, and the external dependence of oil and iron ore is rapidly increasing, especially the external dependence of iron ore has reached 7 1%. The bottleneck of mineral resources has increasingly become one of the biggest constraints of China's modernization, and alleviating the bottleneck of mineral resources is the primary task of geological exploration. To alleviate the resource bottleneck, we must seize the rare historical opportunity, deepen the reform of geological prospecting units, solve the contradictions and problems in geological prospecting work, and submit the mineral resources urgently needed by the country.

In the current discussion on the reform and development of geological prospecting, how to "put on the hat of career and embark on the road of enterprise" is a problem that geologists, especially leading cadres of geological prospecting units, need to seriously consider. Although everyone is unwilling to face it, it is really in front of everyone, and it is time to answer.

First, mining companies are a better choice for the reform of geological prospecting units.

(A) the separation of public welfare undertakings from business activities is a basic principle of land and resources industry reform.

Since 1998, in order to meet the needs of socialist market economy and make geological work better serve economic construction, geological units have been reformed. It can be divided into two parts: first, the geological exploration team of the former Ministry of Geology and Mineral Resources and relevant industry departments implement localized management; Second, according to the principle of separating government from enterprise, geological work is divided into two parts: basic, public welfare, strategic and commercial, which are undertaken by geological "field troops" and mining (exploration) companies respectively. As a relatively independent public welfare undertaking, the basic and public welfare geological work provides its work results for the use of the whole industry and society. Commercial geological work includes mineral resources exploration, hydrogeological investigation and engineering geological exploration, which is market-oriented and based on technical and economic evaluation, with paid services and paid transfer of results. The field army has become a high-quality, professional team, with capable and relatively stable personnel, excellent equipment and high-tech support. It can undertake major strategic tasks and be good at fighting tough battles. The overall scale is about 1.5 million people. Although there are still some relationships between public geological work and commercial geological work, between central and local public geological work, and between central and local public geological teams that need to be straightened out, it is an indisputable fact that the vast majority of geological prospecting units and their staff cannot be classified as field troops. Most geological prospecting units will engage in commercial geological work.

The geological team has invested well in recent years, and the days have been relatively moist. However, it should be noted that the requirements for the enterprise reform of geological prospecting units have not stopped for a moment, and the reform task of enterprise management is far from being completed. Article 15 of the State Council's Decision on Strengthening Geological Work clearly states: Deepen the reform of state-owned geological exploration units. Further implement the State Council's plan on the reform of the management system of geological prospecting team, and promote the reform of state-owned geological prospecting units according to the principle of separating government from enterprise. The purpose of the localization and enterprise system reform of geological prospecting team is to promote the geological prospecting team to make better use of market mechanism, to combine with local economic development more closely, to give full play to various functions of geological work and to serve economic and social development in an all-round way. Although the reform will be difficult and risky, it is imperative. There is no way out without reform, and there is no way out without retrogression. The fundamental policy is to make good use of the current preferential policies, vigorously deepen internal reforms, change management methods and operating mechanisms, lay a good foundation, create conditions, and prepare for new challenges. Reform will be promoted sooner or later. Instead of passive reform, it is better to take the initiative to reform and attack. But don't erode the will of reform and innovation because of the good situation.

(b) The main body of an enterprise is a mining company.

The reform and development course of our bureau in the past 20 years is worth reviewing. In the early 1980s, Henan Nonferrous Geology and Minerals Bureau reorganized its specialty around the requirement of "focusing on geological prospecting", and established professional teams such as geological exploration, geophysical and geochemical exploration, comprehensive research and metallogenic prediction, forming the existing geological prospecting unit pattern that lasted for nearly 20 years. With the national economic system gradually shifting from planned economy to commodity economy and then to market economy, the geological prospecting team system of our bureau has also experienced a difficult exploration process. From simplifying administration and decentralizing power, solving the problem of separating government from enterprise, to the transformation of leasing operation, contracting operation and internal management mechanism, it is difficult to establish the main position of geological prospecting units in commodity economy and market economy, which makes the reform look pale and ineffective and has little effect. In the late 1990s, due to the drastic reduction of national tasks, geological prospecting fell to a historical low point, and a large number of technicians left geological prospecting units in order to make a living. In order to make up for the shortage of geological prospecting funds, the bureau actively explored the industrial prospecting market, developed diversified businesses, ran many unfamiliar industries and took many detours. In the new century, with the establishment of the concept of integration of exploration and development, we have spent some energy to invest and cultivate mining industry. However, the elements of these industries are all distributed and operated according to geological prospecting units, and the problems of similar industries and backward management mechanism have not been solved for a long time.

After the promulgation of "the State Council's Plan for the Management System Reform of Geological Prospecting Team", the direction of the system reform of geological prospecting units has been clarified. But how to promote enterprise management? What mode to choose to realize enterprise? What is the main body of the enterprise? Once again, it is right in front of us. Over the years, we have taken geological prospecting units as the basic units and enlivened each geological prospecting unit as the starting point to promote enterprise reform. In fact, these geological prospecting units were established under the conditions of planned economy and in accordance with the principles of professional division of labor, metallogenic belt and administrative division. Under the condition of market economy, this organizational form of geological prospecting units has not adapted to the objective requirements of socialized mass production. Years of reform and development practice have repeatedly proved that it is impossible to invigorate every geological prospecting unit, and it is unrealistic for geological prospecting units to promote enterprise as a whole. We should start with invigorating the whole geological prospecting economy, take the bureau as the unit, take excellent assets as the link, and take advantageous enterprises as the leader to promote the organizational structure adjustment and asset reorganization of the team. Therefore, only by separating the production factors that adapt to the market from the geological team matrix, reorganizing around the main business with the bureau as the unit, cultivating the backbone and leading enterprises that can drive the development of the industry, and establishing a modern enterprise system, can the enterprise be truly realized. The main body of realizing enterprise is not geological prospecting units, but industrial entities.

After nearly 20 years of enterprise reform and exploration, our bureau has gradually formed an industrial pattern of mineral exploration, industrial exploration and construction and service industry, and the market operating income has accounted for more than half. To realize enterprise, we must first establish the main body of enterprises entering the market. In 2004, through restructuring, the Bureau formed an industrial group (geological and mineral company, geotechnical company and survey company) with a certain scale and strength, which is the main body of the overall implementation of the enterprise. It can be said that the company of geology and mineral resources is an inevitable choice for the practice of reform and development in the past 20 years.

(3) Mining companies are effective carriers for knowledge, technology and management to participate in distribution and achieve "getting rich".

At present, geological prospecting units are still wearing career hats and are bound by the original policies. The salary of geological prospecting staff can only be based on the relevant national wage system, and can not cross the line. Geologists struggle with cold, heat and rain, and the wages of employees are out of proportion to their contributions. If it goes on for a long time, it will not retain talents, which is not conducive to the sustainable development of geology and mineral resources. Therefore, increasing employees' property income is one of the effective ways to improve the overall income of geological prospecting employees and an important means to retain talents.

There is a policy basis for improving the property income of non-ferrous geological prospecting workers in Henan Province. Article 19 of the State Council's "Decision on Strengthening Geological Work" clearly states: gradually establish a new mechanism in which knowledge, technology, management and other elements participate in the distribution of exploration and mining income according to their contributions, so as to create a good environment for stabilizing the ranks of geological talents. There are specific methods to improve the property income of non-ferrous geological prospecting workers in Henan Province. At the working meeting in 2009, Henan Nonferrous Metals Bureau of Geology and Mineral Resources put forward that "actively explore the forms and methods of capital, technology, management and information participating in the distribution of interests in exploration and development, and gradually increase the proportion of property income in the total income of employees." Support employees to participate in the business projects and the restructuring of bureaus and teams run by individual capital, and enjoy the corresponding rights and obligations of owners. "Therefore, mining companies are an effective carrier to realize the participation of knowledge, technology, management and other factors in distribution and complete' getting rich'.

To sum up, the establishment of mining companies conforms to the state's major policy on the reform of geological prospecting units, is an effective carrier to improve the income of employees, and is the result of more than 20 years of difficult screening by our bureau.

Second, the opportunities and challenges faced by mining companies

The establishment of mining companies for business activities has good policy support. Article 13 of the State Council's "Decision on Strengthening Geological Work" makes it clear that the exploration mechanism of commercial mineral resources should be improved. Establish the dominant position of enterprises in commercial mineral resources exploration. Encourage state-owned geological exploration units to cooperate with social capital in joint ventures, set up mining companies or geological technology service companies, and encourage the development of commercial mineral resources exploration companies with various ownership systems and flexible exploration enterprises. Standardized mining companies have perfect corporate governance structure and flexible operating mechanism. This mining company has an active, young and energetic staff.

However, we should also see that the newly established mining companies are also facing many challenges: the capital strength is not strong, the potential mining rights are few (almost zero), the technical strength is still relatively weak, and the core competitiveness is not strong. There is no market access certificate for geological work: geological exploration qualification certificate, etc.

Third, the development path of mining companies

(A) the integration of exploration and development is the correct way for the development of mining companies.

How should mining companies develop and what kind of development path should they take? Different people will give different answers at different times. As a geological and mineral company separated from geological prospecting units, more people will give the answer to engaging in geological prospecting and related geological technical services. It should be said that this answer is in line with common sense: geological prospecting units have been engaged in prospecting for decades, have a set of molding working procedures, and are familiar with the work. However, resource development is another discipline and a downstream industry. I didn't have much contact before, and at the same time, the current development environment is not excellent, and I am afraid of difficulties.

In fact, exploration and development are integrated rather than antagonistic. Exploration and development are different stages of mining industry. Exploration is the foundation of development and development is the result of exploration. Recently, geological prospecting units are vigorously promoting the integration of exploration and development from top to bottom. This is very correct and necessary. From the reality of Henan Nonferrous Metals Bureau of Geology and Mineral Resources, geological exploration is our advantage. It is an indisputable fact that it has its own core technology and excellent exploration strength in the field of geological exploration and occupies a place in Henan Province and even the whole country. On the other hand, development is our "short board". Whether it is ideology, personnel status or work experience, we are still not adapted. To this end, the bureau has stepped up efforts to promote the development of mining industry from the requirements of realizing the "fission" development of the economy, requiring a team (institute) and a mine. Exploration can only solve the problem of survival, exploration is a "part-time economy" and development can be "fission". Mining companies should also change their concepts, truly establish the concepts of "establishing a career through exploration" and "developing industries to enrich the people", accelerate the transformation of industrial structure from exploration to development, supplemented by exploration, and devote themselves to building ore bodies of different sizes.

As we all know, Zijin Mining is a mining company with gold as the leading industry, exploring, mining, beneficiation, smelting and selling mineral products. On May 3 1, the Financial Times published the latest list of the world's top 500 enterprises in 2009. Zijin Mining became the world's top 500 enterprises for the first time, ranking 243rd. Its holding companies are located in more than 20 provinces, municipalities and autonomous regions in China and 8 overseas countries. It took only nine years for Zijin Mining to implement the shareholding system reform in August 2000, to be listed in Hong Kong in February 2003, and then to become one of the top 500 companies in the world. Zijin Mining has achieved great success, and started to embark on the fast and sustainable development of golden road, becoming a vibrant and energetic company in the gold industry at home and abroad. When talking about the most important reason for the rapid development of Zijin Mining, the chairman of the company said: For mining enterprises, whoever has resources will have tomorrow. The success of Zijin Mining lies in the success of resource strategy. Zijin Mining is a successful example of integration of exploration and development.

Therefore, "optimized exploration talents, technology and information+social funds (including other funds)+optimized development talents and technology" is the ideal operation mode of mining companies.

In addition, mining enterprises should also grasp the relationship between the present and the long-term, based on the present, but pay more attention to the long-term. Only based on the current situation and obtaining certain economic benefits as soon as possible can we get the support of the company's shareholders and be conducive to the smooth development of the work. Only by focusing on the long-term, can we formulate a development strategy that conforms to the company's reality and provide strong support for the company's shareholders to obtain sustained returns. The key to success is to acquire occupied resources and develop them effectively.

(2) Constantly cultivate their own brands and form core technologies.

At present, there are not less than 30 exploration units with geological exploration qualifications in Henan Province. There are only 10 nonferrous metal geology and mineral resources bureaus in Henan province, all of which work in Xindi Building, Zhengdong New District (only with different floors), and all adopt the same charging standard-China Geological Survey 2006 edition. If the mining right owner has no other reference standards except different floors when choosing exploration units, and if the geological exploration methods have no their own characteristics and the methods and means are the same, then the acquisition of exploration projects is the result of the mining right owner's wrong elevator number selection. How unfortunate! In the market, exploration units not only need to face the competition of different systems at the same level, but also need to face the competition of exploration units in the same system. How to make consumers choose you not because they press the wrong floor, but because they only have you in their ideology? There is only one way: create your own differentiated advantages and brand yourself! In-depth analysis of the basic situation of your own unit, find out your own advantages, optimize and refine, form your own company's unique insights, and then spread this insight to let the mining rights people know that you are different. Other things being equal, people are always most interested in that unique unit. As we all know, in our bureau, to carry out two-dimensional seismic work and find an external cooperation team, we will immediately think of the coalfield geophysical team without hesitation. This is the brand!

Everyone is shouting that there are no good resources at present. Is that really the case? Take the gold mine as an example, all mine disasters that are easy to open can be obtained. If there is no way to start, of course, no resources can be found. Why Zijin Mining can occupy more resources in recent years is to rely on technological innovation and technological innovation. The projects they participate in are either low-grade or difficult to choose, and technological innovation has won them great development space. For example, in the Shuiyindong Gold Mine in Guizhou, a foreign company spent 20 million to 30 million yuan on exploration and dared not do it again. Zijin Mining has solved the problem of refractory dressing and smelting of Carlin-type gold deposits. At present, the gold metal reserve of Shuiyindong is 68.3t, which has become one of the three major gold mines in Zijin Mining. The main business cost is 42.98 yuan /g, far below the average level of other gold mines in China. At present, Zijin Mining has made breakthroughs in dressing and smelting technologies such as low-grade oxidized gold ore, low-grade copper ore, fine disseminated refractory gold ore and complex copper sulfide gold ore, and successfully developed and utilized a number of "dead mines" that cannot be developed or have no development benefits, which not only fills the technical gap in the industry, supports the development of various mines in Zijin Mining, but also provides reliable technical preparations for Zijin Mining to control and develop other low-grade refractory mines in the future. These technologies have become the core competitiveness of the company. The wall-cutting and filling mining method adopted by Henan Farende Mining Company in Shagou silver-lead mining area of Luoning County has made an important contribution to the company's profit. Relying on advanced technology, the gold and metal reserves of Zijinshan gold and copper mine, the birthplace of Zijin mining, will be dug up more and more! At present, the accumulated reserves reach 300t. At present, Zijinshan Gold Mine has become the gold mine with the largest available reserves, the largest mining scale, the largest gold output, the lowest ore grade, the lowest unit ore treatment cost and the best economic benefit in China, and it is also the only world-class super-large gold mine in China! That's because they have mastered key technologies, including Jin Gangzuan!

For small and medium-sized mining companies, the core technology that needs to be cultivated or mastered at present is the value and prospect of mining rights, which can basically be "clear at a glance".

(3) Establish and improve the mechanism and system of attracting talents.

Technology comes from talents. The competition of talents is directly manifested in the competition of policies to attract talents. But the fundamental thing is the competition of the mechanism of cultivating, attracting and using talents. The market mechanism of talents is the fundamental goal pursued by mining companies. We should have a multi-dimensional view of talents, that is, find and use talents from multiple channels and angles. We should have the concept of talent flow, that is, to establish an open and flexible talent flow mechanism. Make every effort to build a talent "reservoir".

Reform the income distribution system and advocate distribution according to production factors (distribution according to the quantity and quality of production factors and their contribution rate). For a long time, the distribution form of distribution according to work in state-owned enterprises is basically salary+bonus+allowance, and most of the mining companies reformed by geological prospecting units are still distributed in this mode. Due to the limitation of social and historical conditions, the historical limitations of distribution according to work and the disadvantages of long-term distribution mechanism, distribution according to work, whether it is wages, allowances or bonuses, has a strong egalitarian color.

In standardized mining companies, we must break through this traditional distribution mode, actively explore the forms and methods of distribution according to production factors that reflect the unity of responsibilities and rights of operators and adapt to the modern enterprise system, and constantly mobilize and stimulate the enthusiasm and creativity of enterprise operators. Such as the implementation of annual salary system, stock option system, scientific research achievements, proprietary technology, intellectual property rights and other factors to participate in the distribution. Taking the post as the reference system, through the dynamic shareholding principle of holding shares by post and exchanging shares by post, the human resource elements are capitalized, so as to realize the measurable realistic value of potential resources, successfully improve the quality of enterprises from human resource management to human capital management, and promote the harmonious development of employees and enterprises based on the same interests.