By Koos Jansen, BullionStar
The largest ever gold deposit in China has been found in the East China Sea, near the Sanshan Islands in the Shandong province, at a depth of 2,000 meters, the People’s Daily Online reported on Tuesday.
The Shandong Provincial No. 3 Institute of Geological and Mineral Survey announced on Monday the massive gold deposit in the sea near the city of Laizhou holds 470.47 tonnes of gold. The vice director of the Shandong Provincial No. 3 Institute, Ding Zhengjiang, said the gold deposit is part of a belt that lies deep at the sea bottom.
“It’s very difficult to locate and set up the drilling platforms at sea,” Ding said. The project manager Zhang Junjin said, “drilling holes into underground rocks that are more than 1,000 meters deep is a big challenge. Normally in China, gold mine prospection is conducted within 800 meters underground. The discovery of a gold deposit lying 2,000 meters undersea provides new drilling technology for future gold mining,” (Quotes by the People’s Daily Online).
Owned by Laizhou Ruihai Mining Ltd, the preparations for China’s first undersea gold mine took three years and involved more than 120 kilometers of drilling, with 67 sea drilling platforms and nearly 1,000 geological workers.
At a current gold price on the Shanghai Gold Exchange of ¥225 yuan per gram for gold having a fineness of 9999, the deposit is worth ¥105.9 billion yuan, or more than $16 billion US dollars. However, if the Chinese want to mine the gold at the bottom of the ocean the costs would be very high, assuming they can develop the technology for off-shore mining.
As on-shore gold reserves are globally being depleted, off-shore gold mining initiatives are increasing. In June 2015, The Times Of India reported exploration has begun for mineral deposits and precious metals like gold and silver in the Southern Indian Ocean at a geological junction where three tectonic plates meet near Mauritius.
In 1949 China’s domestic mining output was a little over 4 tonnes a year. Currently, China is the largest gold miner globally; in 2014 China produced 452 tonnes of gold. The China Gold Association recently disclosed domestic mining output reached 357 tonnes in the first three quarters of 2015, which is 476 tonnes of gold annualized, up 3.5 % y/y.
Most notably, Chinese domestic mining has increased significantly since the late seventies when the country started to open up under the guidance of Deng Xiaoping. It’s being thought that half way the nineties China became a net gold importer. Ever since China has not exported its domestic gold mining output and ramped up gold import to well over 1,200 a year since 2013.
Estimated above ground gold reserves in China are at least 13,743 tonnes, of which 1,723 tonnes are owned by China central bank the People’s Bank Of China, and 12,021 tonnes owned by the private sector.