Xinjiang

Benefits

12th Five-Year Plan Continues to Require Mineral Demands in the Region

In the 12th Five-Year Plan period, new projects, like new urbanization plans, affordable housing construction, and other infrastructure projects, will boost steel demand. Over the past few years, the steel industry in Xinjiang has developed rapidly; the annual production capacity is expected to be increased 7 million tonnes to 23.5 million tonnes. At present, the Xinjiang local iron exploration rate is 30 million tonnes a year, in contrast to the annual demand of 200 million tonnes9.

The price of raw materials produced outside the province is higher than that produced within Xinjiang, so the local steel enterprise is always a better choice. The annual production capacity of steel at Ili and Kashgar is expected to reach 10.57 and 6 million tonnes a year respectively. By 2015, the annual production capacity of crude steel in Xinjiang is expected to reach 34.4 million tonnes10.

World Gold Council (WGC) Far East Managing Director Albert Cheng said in 2010, "the Central Government's policy to promote domestic consumption has been extended further to the west; the level of consumption in the west will be more concerned about - and it is expected to catch up with that of - the coastal cities." The report also said, "Although China became the world's largest producer of gold in 2007, the scale of production is still unable to meet the demand of domestic consumption; the gap between the two will have a snowball effect." China is currently ranked second in the world’s gold market after India. China is also the fastest growing market of gold consumption in the world. In the past five years, the average growth rate of China's gold demand rose 13%. In 2013, China's gold demand in jewelry and the investment field totaled 1,065.8 tonnes11.

Further Improvement of Railyway Networks

In order to speed up the construction of the international communication and transportation hub in Xinjiang, a clear blueprint for the development has been made. According to the Central Asia and Xinjiang Coal Resources and Mining Profile, railway, highway, aviation, and pipeline were included in the plan. “Two Wings with One Major Route” is the projected railway model. It continues to increase the demand for iron ore resources, and will enhance transportation capacity in the region after completion. The "One Major Route" links Xinjiang with Gansu and Lanzhou City, a total length of 1,776 km, with a design speed of 200 km/h or more. "North Wing" connects the Xinjiang Jiangjunmiao to the Inner Mongolia Ceke, and “South Wing” connects Xinjiang Hami to Chengdu, Sichuan. The projected new railway mileage in the 12th Five-Year Plan is 4,100 km, with a total 8,200 km, covering 75% of the county-level administrative regions. In 2020, the network will be built to connect six foreign railway crossings12.

XINJIANG LEADING TO THE CHINA INLAND BY THE "ONE MAJOR, TWO WINGS" PROJECT

Railway Construction Project will be Implemented

According to Xinjiang Coal Industry Authority:

For the comprehensive utilization of the development of coal resources in Xinjiang, the country has a clear implementation of the “one major, two wings” railway construction project, between the China inland and Xinjiang, and it will be held in June 2009

The project is expected to be completed in three years, phase one designed annual coal capacity of 300 million tons

Xinhua News Agency

Six new airports will be completed soon

Aviation in Xinjiang will also be improved under the 12th Five-Year Plan period. Six new development and relocation plans of airports will be completed before 2015. By then, the total number of Xinjiang airports will have increased from the current number 16 to 22 by 2015. This will strongly support the development of western routes. The Kashgar, Yining, and Korla airports will be the regional hubs, which will further improve the flight network13.

 

The Completion of New Gas Pipelines and Electricity Networks

According to the Shanghai Securities News report, in the 12th Five-Year period, the State-owned enterprises planned investment of over ¥700 billion in Xinjiang. National Grid, CHD, CNPC and other state-owned enterprises are to increase industry efforts in supporting Xinjiang development. State-owned Assets Supervision and Administration Commission (SASAC) will also continue in capital, technology, and talent support for Xinjiang. The “Electricity Transmission from Xinjiang to East China Project” will promote the coordinated development of a power grid." The installed capacity added in the region will reach 49 million kilowatts. The new grid cable installation for the project will be more than 13,800 km in length for the next 5 years. When the thermal power project and wind power project gets started, cable grid and related facilities will further promote the demand for steel14.

  1. ± 800 KV Hami South - Zhengzhou UHVDC Project
  2. ± 800 KV the Hami North - Chongqing UHVDC Project
  3. ± 1100 KV Huaidong - Sichuan UHVDC Project
  4. 750 kV Xinjiang - Northwest Region Networking Second Channel Project

In addition, according to the "Xinjiang 12th Five-Year Plan Outline", the Kazakhstan-China oil pipeline will lead to the construction of two coal-to-gas delivery pipelines, each capable of a 30 billion cubic meter capacity. By 2015, China's western oil and gas delivery channel will be completed.

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  Pipe Length Annual Capacity of Oil (Gas)
Sino-Kazakhstan oil pipeline 1 962.2km 2000 ten thousand tons
Russia crude oil pipeline 2 1030km 1500 ten thousand tons
China-Burma oil and gas pipelines 3 1100km 2000 ten thousand tons
4 2806km 120 billion cubic meters

Industrial and Social Fixed investments Continues to Grow

Key Growths in Industries of Xinjiang in 201315

Category 2011 Growth YOY %
Total Industrial Added Value 12.9%
Above-scale Industrial Added Value 12.9%
Light Industry 19.2%
Heavy Industry 12.7%
Coal Industry 5.4%
Steel Industry -2.7%
Automotive Industry 25.8%
Total Fixed Asset Investment 30.2%
Investment on Social Infrastructure and Affordable Housing 59.0%

Footnote:

  1. Ili Daily
  2. Hexun Futures News
  3. JRJ.com
  4. Central Asia and Xinjiang coal resources and mining Profiles
  5. Xinhua Net
  6. SINA News
  7. Xinjiang Statistical Information Net (Paper Report)