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Management & Engineering 13 (2013) 1838-5745 Contents lists available at SEI Management & Engineering journal homepage: www.seiofbluemountain.com Model of Assessment Competitiveness Indexes of Mineral Resources Baoer ZENG School of Economics and Management, Beijing University of Aeronautics & Astronautics, 100191, P.R.China KEYWORDS ABSTRACT Mineral resources, Competitiveness, Assessment, Index system As one type of important material foundation of national construction, mineral resources are essential assurance for sustainable development of economy and society. This study discussed the concept of competitiveness of mineral resources and its influencing factors considering the characteristics of the development of mineral resources. Mineral resources competitiveness means the ability to transform mineral resources predominance into economic predominance. We established the model of assessment of mineral resources competitiveness by five aspects: resources predominance, market environment, ecological environment, investment climate and economy and society benefit. We also came up with quantitative items of each index. © ST. PLUM-BLOSSOM PRESS PTY LTD 1 Introduction The purpose of forming mineral resource competitiveness assessment index system is to find out regional and enterprises’ inadequacies in mineral resources competitiveness comparing with other regions and enterprises. Regions and enterprises can work out the way to improve mineral resource competitiveness and identify the development trend of a variety of indicators. Through competitiveness assessment index system of the mineral resources research, can find the direction to improve and try their best to transform mineral resources into economic advantage, which have a very important practical significance to economic development of our country. 2 Mineral Resources Competitiveness Mineral resources competitiveness means the ability to transform mineral resources predominance into economic predominance. Resource-advantages minerals mainly refer to rich natural endowments, such as well geological conditions, rich mineral resources, good deposits occurrence conditions and technical conditions of processing and smelting, favorable conditions of natural economic geography. Economic advantages mean that minerals have highly efficient mining production ability, advanced technology of development and processing, low cost and high-profit products, superior conditions of investment environment, ecological Corresponding author. E-mail address: [email protected] English edition copyright © ST. PLUM-BLOSSOM PRESS PTY LTD DOI:10.5503/J.ME.2013.13.017 95 environment and socio-economic environment, and have strong competitiveness in market. In current conditions of market economy, the mineral resources competitiveness focuses on the ability of converting resource inventory to monetary income flow. Mineral resources advantages influence mineral resources competitiveness through cost advantage and price advantage, which is decided by the characteristic of mineral resources. On the one hand, mineral resources competitiveness is demonstrated by its resource advantages; on the other hand, influenced by the market environment, investment environment, ecological environment and other factors affect the performance of the competitiveness. Mineral resources competitiveness is the comprehensive embodiment of the inner endowment and external environmental impact. Thus, we should assess mineral resources competitiveness of abilities of transform mineral resources predominance into economic predominance, basing on the evaluation of mineral resources endowment condition, taking market demand trends prediction as main reason, under the influence of investment environment, ecological environment and other factors. 3 Assessment Indexes Model of Mineral Resources Competitiveness The main objective of this study is to establish index system to assess mineral resources competitiveness. We collect indexes from inner factors and outside environment factors to evaluate mineral resources competitiveness all around. 3.1 Resource predominance index Resources predominance is the primary factor of those who influence mineral resources competitiveness for its inherent characteristics of the mineral resources. Resources predominance is the basic foundation of degree of difficulty of development of mineral resources, which mainly consist of the scale of resources reserves, mineral type and quality, the degree of aggregation of the mineral resources, level of resources available, mining conditions, dressing and smelting processing conditions. See Table 1. Table 1 Resources predominance factor Factor Resources predominance Assessment index Resource reserves Mineral type and quality Degree of aggregation of mineral resources Level of resources available Mining conditions Dressing and smelting processing conditions Cost advantage Cost advantage is also an important factor of resources predominance index. When market demand is fixed, enterprises which have low cost product can own more market share in the fierce market competition, which is called competitiveness in economic significance, and it can also be called cost advantage. Mineral resources predominance influence mineral resources competitiveness through cost advantage. If one kind of mineral resource have large reservation, high quality and ease of development in some area, this mineral product may have low cost in the area, thus can sell large quantity in lower price level to gain more income, and it can be regarded as have more mineral resources competitiveness. Otherwise, mineral resources which have mineral resources predominance without cost advantage may be weak competitiveness, even though no competitiveness. 3.2 Market environment index Market environment of mineral resources refers to the relationship between supply and demand of mineral resources in the market. The relationship between supply and demand reflects the level of assurance of mineral resources and the social demand for minerals. Natural existence of the mineral in nature and social demand for minerals mining production are the two basic stimulating factors for mining activities. The relationship between supply and demand determines the prices of mineral products formation and mineral products in the market competitiveness. Determine of market environment indicators are the followings: market demand conditions, regional market conditions, market development and competitiveness of mineral product. See Table 2. Table 2 Market environment factor Factor Market environment Assessment index Market demand Distance between major consumer market and mineral resources Regional market conditions Market development Competitiveness of mineral product 96 3.3 Ecological environment index Ecological environment reflects the dependent relationship of development of mineral resources and the natural environment. Harsh ecological environment will inevitably affect the development of mineral resources, mine construction and production, which will inevitably cause damage and impact on the ecology and the environment. The development of mineral resources will take up a lot of fertile land, the concentrator of dust and smoke emissions and waste water will pollute the air, water and farmland, and the ecological balance is destructed. So, when assessing the competitive evaluation of mineral resources development, we should predict the resources development impact on ecological environment, and at the same time, should work out ways to protect the ecological environment. Determine of ecological environment indicators are the followings: ecological and environmental conditions, atmospheric environment impact, water environment impact, soil environment impact, occupation of cultivated land area, impact on the natural landscape, integrated environment management measures. See Table 3. Table 3 Ecological environment factor Factor Assessment index Ecological and environmental conditions Atmospheric environment impact Water environment impact Ecological environment Soil environment impact Occupation of cultivated land area Impact on the natural landscape Integrated environment management measures 3.4 Investment climate index Investment climate is a conception which contains comprehensive implication. Factor that influence investment decisions can be divided into two categories: hard climate and soft climate. Investment in physical form “hard” climate and investment in material form “soft” climate. Transportation, posts and telecommunications, water supply, electricity, gas and other living facilities, and minerals, natural plant resources are generally classified as “hard” climate. Policies and regulations, the level of economic development and stability, technical and management level and efficiency of administrative agencies are classified as “soft” climate. Mineral resources investment climate has its characteristics. First, mineral resources investment climate is objectivity. Mining investors attach great importance to the geological potential of the investment area and the development of economy. Mining activity is hidden underground objective geological resource-rich collective labor, its size, reserves, and ore grade, the presence of harmful elements will have a direct impact on potential investors of the scale of production, equipment selection, production deadlines and the final income. At the same time, geological the complexity of the hydrological conditions, have an important impact on the future cost of production. Second, mineral resources investment climate is followed by a high degree of dependence in infrastructure. One body buried deep underground, and deposit in the mountains away from the cities and towns where there always existing transportation inconvenience. while the amount of exploitation of the mineral and waste stone mining optional ore is giant, Therefore, the convenient transport facilities in the mining investment is prerequisites. Third, electricity and water supplies and modern communication facilities are also essential. Four, the stability of the mining policy is an important aspect of investor decision. Mining investment is a long period of high capital density in high-risk business activities; investors will pay very careful and special attention to investment in the mining policy adaptability, coherence and stability. All in all, factors affecting investment climate can be divided into four categories: infrastructure, regional economic development, conditions of supply of factors of production, social service facilities. See Table 4. Table 4 Investment climate factor Factor Assessment index Infrastructure Investment climate Regional economic development Conditions of supply of factors of production 97 Items Transportation Power supply Water supply Fuel supply Posts and telecommunications GDP GDP per capita Revenue Gross industrial and agricultural production Supply of labor Labor quality and technical proficiency Supply of production and life material Efficiency of administrative agencies Finance and insurance Life and living conditions Medical and health conditions Commercial trade Social service facilities 3.5 Economy and society benefit index Economic benefit index contain the investment rate of return, the profit rate of investment, financial internal rate of return and the loan repayment period. Society benefit index include labor and employment effects and income distribution effects. See Table 5. Table 5 Economy and society benefit factor Factor Assessment index Profit rate of investment Investment tax rate Financial internal rate of return Loan repayment period Labor and employment effects Income distribution effects Economy and society benefit 4 Conclusion This study discussed the concept of competitiveness of mineral resources and its influencing factors considering the characteristics of the development of mineral resources. Mineral resources competitiveness means the ability to transform mineral resources predominance into economic predominance. Competitiveness of mineral resources is a comprehensive concept of by their inner qualities and external environments. On the one hand, mineral resources competitiveness is the presence of competitive ability by its resources predominance. On the other hand, mineral resources competitiveness is also influenced of by the market environment, investment climate, ecological environment and economy and society benefit and other factors affecting the performance of the competitiveness. We established the model of assessment of mineral resources competitiveness by five aspects: resources predominance, market environment, ecological environment, investment climate and economy and society benefit. We also came up with quantitative items of each index. References [1]. ZHOU Jinsheng, BAO Ronghua. Evaluation and Optimization of Mineral Resources Invest Climate of China, Geological Technical and Economic Management, 1997, 6 (19): 28-33 (in Chinese) [2]. WANG Zhihong. Mineral Resource Competitive Power (MRCP) and the Index System for Assessing the MRCP, Journal of China Coal Society, 2002, 27 (1): 103-107 (in Chinese) [3]. HONG Shuifeng, YU Ruixiang. Model for the Indexes Mineral Resources Competitiveness, Resource Development and Market, 2004, 20 (6): 406-408 (in Chinese) [4]. Griffiths J.C. Mineral Resource Assessment Using the Regional Value Concept, Journal of International Association of Mathematics and Geological, 1978, 10 (5) [5]. Toshihiko Nakata. Energy-economic Model and the Environment. Progress in Energy and Combustion Science, 2004, 30 (4): 417-475 98