Will Chinese Renminbi (RMB) replace Dollar in International trade?

China with its emerging economy is all set to put a challenge to the so far undisputed place of US dollars in international trade. China consumes about half of the base metals produced in the world. It buys almost 42% of the total copper produced in the world and about one billion metric tons of iron too. Recently China became the largest importer of oil in the world and all set to pass the record of India as the largest importer of gold. 

Chinese Currency

In such a condition nobody will get surprised if the Chinese RMB got approval as the currency for international trade. This currency is being used as a settlement currency in Australia and this practice has been increased in the near past. According to HSBC, RMB will become the third largest unit used for trade by 2015. Although China had to suffer severely during the treasury shutdown in US as it was the major holder of US treasury bonds, it could recover from the fall very fast.

Now, China is one of the most sought after manufacturing hubs in the world. With cheap labor and availability of raw materials China attracts manufacturers from world over to its soil to start units. Excellent infrastructure and comparatively well maintained public disciple are the other two factors which turn the decision in favor of China when the question is about to start a manufacturing unit.

After making their domestic economy stable now the dragons are all set to conquer the world of business with RMB. A recent commentary in China’s state media is considered as a sign of this. During treasury shutdowns in US, media in China called for a de-Americanised world where small and big countries will have their key interested protected and will get an equal treatment.

When we go by the history of China, it is proven that they have achieved almost everything they aspired for. If the history has to repeat once again, we can see Chinese Renminbi (RMB) in the place of US dollars very soon.

The Mozambican Answer for Environmental Issues Related to Mining

Mining may be the sector that attracts maximum number of protests from the environmentalists. It is the same sector that has been held responsible for many environmental issues all over the world. We cannot deny the fact that mining causes an ecological imbalance and affects the natural environment of the region. However, we cannot stop mining for the sake of environment as it is one of the most important sectors that are responsible for the life today.

People from different walks of life depend on mining to continue living either directly or indirectly. You cannot even think about living without oil, metals and several other minerals which are used in the production of many articles we consider as essential things to live. So the best solution is to avoid the damages to the nature or minimize it.

Rising to the occasion, many mining companies have implemented various measures to minimize the effects on ecology. They are investing more on Eco-friendly mining equipments and tools and trying to avoid cutting down trees in the area as far as possible. Recently, LNG trucks have been introduced at many mining fields to minimize the pollution caused by diesel vehicles. 

Mozambique

Now the government in Mozambique has come out with a unique project to protect the environment in the Tete Province. 60% of this region is allocated to coal mines and many environmental activists and agencies have raised concerns many times in the past. The nation was not in a position to declare a ban on coal mining as it constitutes major part of its total revenue. After a series of discussions and debates the government has planned to start up a national park spreading across an area of 350,000 hectors here. The parks will have Hippos, Elephants, Lions and Tigers among other animals. As the area selected for building national park is with lot of trees and other geographical structures, it will not take much time to start the park.

Mozambique, which has one of the largest coal resources in the world, attracted the attention of many mining companies from the western hemisphere of the earth. Many well reputed mining giants have interests in this soil. Now they are in bit confusion on the government’s decision to balance the environment. They are worried but not started protesting against this new move of the government. Anyway, environmental activists and organizations are welcoming this initiative wholeheartedly.

Dragon Dance Continues

China has emerged as a economical power within a short span of time. When the authorities started removing iron curtains slowly by the end of the last century, even they will not have thought that the nation will become a force to reckon with in the next century. Despite the rumors that China is planning a slowdown in developmental activities, experts at different sectors predict a substantial growth for China in each sector.

Mining industry too started turning China oriented. Energy and Metal Analysis firm, Wood Mackenize reports that China will be the largest consumer for base metals (Non-ferrous, non-precious metals) in the world by 2017. According to their calculation, China will be consuming about 52 % of the quantity of base metals consumed by the entire world. Presently it is about 46%.

Even now China is a determinant factor in base metal mining industry as the major customer. The fast developments the nation experienced in the last two decades and relatively flexible rules promoted industrialization in China. Now it has become a manufacturing hub with manufacturing units for almost everything in the world. Availability of raw materials and comparatively cheaper labor charges make it a favorite destination for many manufacturers. In real, manufacturers from other countries are experiencing a tough competition from Chinese products.

The prediction by Wood Meckenize clearly indicates the fact that the country has a strong financial base and will not have to worry about the happenings in rest of the world. And by this year end, almost all the mining companies worldwide will start concentrating in China. China too is looking for this opportunity when they can bargain strongly for a better deal. According to the head of base metal department in Wood Mackenize, Helen Mathews, more demand will be for the metals such as Zinc, Aluminum, Copper, Lead and Nickel.

Another Positive Move from the Mongolian Government

There were reports earlier about the changes brought by the Mongolian government in the existing mining law which is supposed to give a boost to the industry. Although everyone concerned to this industry hailed the decision, still there were some doubts about how much the amendment will help the mining sector.

The major reason for this apprehension was the dispute going on between the government and the Canadian mining company, RIO TINTO over the underground expansion of Oyu Tolgoi copper and gold mine. Government holds 34% of the share in this mine while the rest is owned by the Canadian company.

The dispute has aroused over a number of issues such as cost overruns, employment and pay of Mongolian workers etc apart from the ownership issue. Entire mining industry was eagerly waiting to see how the government will handle the dispute and whether the final outcome will send a positive signal to the rest of the world. 

Anyway, the new CEO of the company, Craig Kinnell has taken initiative to solve the issue and he expressed his willingness to talk with the authorities to find out a solution which will not harm the interests of both the parties involved. The meetings are beginning today and the world mining industry is waiting eagerly to know the results.

As Mongolia experienced a sudden fall in direct foreign investment, the government has come up with several modifications in the existing mining laws to bring in more foreign investment in that sector. Mining, being the major source of revenue the government cannot stand rigid on these issues for a long time, say many industry watchers.  

Good Opportunities for Iron Ore Exporters

There was a rumor quite some time back that China’s economy is experiencing a slowdown. This rumor dearly costed the iron ore industry as China being the largest consumer in the world for iron ore. It is estimated that China alone consumes the same quantity of iron ores as consumed by the rest of the world. However, it proved to be a sheer rumor as China has imported almost 74.58 million tons of iron ore during September 2013. This is an all time high figure and it denotes that China’s economy is growing as far as the iron industry sector is concerned.

The production rate of steel in China has increased and it is estimated that about 2.4 m tons were produced every day in September. As the demand for the steel from China keeps on increases, the production will catch up momentum in the near future. This indicates that more China may require more iron ore in the future. Realizing the situation the new Chinese leadership has opened the mining industry for market forces. Although this new policy paid well initially, the high mining cost and poor quality of the ores available in the domestic mines haunts China.

This news has created a new enthusiasm among the miners all over the world. Many mining companies engaged in iron ore mining have started increasing their production and as a support to them, mining equipment and tools manufacturers have come up with new technologies to increase productivity and to reduce the mining costs. Fuel efficient and fast drilling hydraulic blast hole drilling rigs are good examples. There is no doubt that the days to come will witness more development in technology to support high productivity.