By Jiang Wei (China Daily)
Updated: 2008-03-25 10:02

The government should set up a metal mining development fund to help Chinese companies explore local and overseas resources, the president of China Minmetals Corp (Minmetals) said.

Capital could be raised from China Investment Corp, local banks, miners and foreign strategic investors, Zhou Zhongshu, a member of the 11th National Committee of the Chinese People's Political Consultative Conference, said.

The fund should invest in domestic and overseas mining groups to establish the country's key resource reserves, he said.

The proposal came after cases of overseas acquisition or mineral resource exploration by Chinese firms being blocked.

"China has made some progress in overseas resource cooperation, but it's still far from enough," Zhou said. "It's difficult for Chinese firms, which are usually small-scale and lacking in capital, to compete with their international rivals."

Many Chinese companies are operating independently and fail to get overseas projects because they're competing with each other, he said.

Zhou called for the government to set up an industrial fund using national and social capital to subsidize miners.

Local steelmakers are increasingly collaborating on high-cost overseas projects.

Last year, four major steelmakers - Wuhan Iron and Steel (Group) Corp, Baosteel, Ansteel and Shougang Group - set up a joint business in Beijing to exploit and develop overseas mineral resources.

As the nation's largest metals trader, Minmetals is also involved in overseas metals resource exploration as it tries to diversify its business.