China’s NDRC Fortifies Mining Sector to Secure Critical Minerals for its Development

In the context of intensifying rivalry among big powers for resources, technology and markets, China’s National Development and Reform Commission (NDRC) took the strategic decision to centralize and coordinate overseas acquisitions and deals for securing #CriticalMinerals via Guangyan International Investment.

Guangyan, which can be translated as Big Rock, was established in 2024 with a capital of RMB 60 billion ($9B). Actually, the parent company of Guangyan is China’s mining giant China MinMetals Corporation, which is itself a major state-owned enterprise under the direct supervision of the central NDRC.

Last month, China’s Central Government also convened a meeting with mining majors and indicated to them that they will be eligible for state backing for overseas investments. Companies targeted include Zijin Mining, China Non-Ferrous, China MinMetals, Jinchuan, China Molybdenum, China Amperex Technologies, and Baowu Steel. On the other hand, smaller firms will face stricter control given their weaker ability to handle geopolitical risks and meet the operational challenges ahead.

Previously, Chinese mining companies sometimes competed against each other and drove up acquisition prices unnecessarily. They often duplicated efforts for due diligence on a mining asset. Their understanding and application of the ESG framework were a little haphazard and inconsistent. They faced challenges to secure the levels of financing that characterize mining projects.

To address the above shortcomings, the NDRC is introducing a coordinating layer in Guangyan. If necessary, Guangyan may even take a direct stake in an overseas mining project to exercise closer control with a seat on the board. In the future, NDRC envisages several firms pulling together as a group to invest overseas, as opposed to playing solo.

Thus, Guangyan will consolidate China’s mining resources to produce greater leverage and stronger bargaining power. It is also expected that the implementation of mining projects will accelerate thanks to the bigger financial muscles and better coordinated actions.