BEIJING (Interfax-China) -- Plans to build a hydropower station on a sacred Tibetan lake in western China were abandoned last week, with the authorities deciding that developing the local tourist industry could turn out to be more profitable, but if the central government continues to encourage mining throughout its remote western regions, it will also need to build the infrastructure required to draw in investors.
"The first challenge we have in Tibet, basically, is the infrastructure," said Gerald S. Panneton, the CEO of Continental Minerals Corp., which is now in the process of developing the Xietongmen gold and copper mine in Tibet.
"Two years ago, there was no road, no rail head," Panneton said. "They were starting on the power [grid], but all of this was government-supported infrastructure."
With China desperate to build its domestic reserves, dozens of mineral deposits in Tibet and surrounding regions are now awaiting investment, and the need to build power stations, roads and railways to support the projects will serve to intensify the conflict between economic and industrial development on the one hand, and environmental conservation and cultural diversity on the other.
Officials and company representatives at the China Mining conference this week were reluctant to discuss any ethical issues that might arise from their dealings in Tibet, and international delegates preferred to focus on their environmental records, insisting that they and the local governments involved have the right mechanisms in place to avoid widespread ecological damage in pristine regions of Tibet, Sichuan and Yunnan.
Continental Minerals abides by World Bank regulations on the environment, and will submit its environmental impact assessment report to the Chinese government in due course, Panneton said.
"We are evaluating all the impacts and within our document which we are providing to the government for our application, we will include all the impact of putting a mine in Tibet as well as all the mitigation that needs to be done in case there are any problems," he said.
The authorities decided to abandon the proposal to build a hydropower station on the Tibetan lake of Megoe Tso, which lies in the Tibetan prefecture of Ganzi in the neighboring province of Sichuan, but with the government planning to launch a series of electricity projects and thus provide the infrastructure for its wide-ranging mining plans in the region, other previously untouched areas are facing big changes.
According to the Web site of the Ganzi Tibetan Autonomous Prefecture, the region has the most mineral resources in Sichuan Province, with significant deposits of gold, silver, platinum, lead and zinc, as well as a potential hydropower capacity of more than 41,000 megawatts.
Powerful central government-administered electricity companies like Datang and Huadian, as well as the Western Mining Corp., have already descended on Ganzi. As in Yunnan Province further southwest, the development of mineral resources will require the construction of massive and controversial hydropower facilities on the region's rivers.
The conflict in Yunnan came to a head when the government announced plans to build 13 hydropower plants on the Nu River, which as well as running through a national heritage site, also passes by several lucrative mineral deposits. However, the government now appears to favor more modest hydropower proposals.
In the case of the Megoe Tso Lake, the local government decided that tourism would be a better long-term option, according to Sichuan Daily.
Tashi Tsering, a Tibetan environmental expert at the University of British Columbia, said that he did not believe that the decision to abandon the Megoe Tso project would have any impact on mining projects in the region.
In fact, those plans are likely to remain unaffected, and the London and Hong Kong-listed Datang Power International, a subsidiary of the central government-run Datang Group, has already signed a deal to build two big hydropower plants in Ganzi at a cost of RMB 22.5 billion ($2.85 billion).
Within Tibet itself, mining and hydropower remain high priorities for the central government in Beijing.
Deng Jiniu, the chief development officer of the Western Mining Corporation, told the China Mining conference that China has traditionally sent units to western areas to conduct "exploration and not exploitation". With the country now desperate to alleviate shortages, the time has come to start developing the deposits.
An official with the Tibetan branch of the Ministry of Land and Resources presented a long list of potential mining projects in the region, but also admitted that the main problem was infrastructure and power.
Deng Jiniu said that because of "infrastructural limitations", mineral deposits in western areas like Tibet were "ideal investment projects" with great potential. The company is a major investor in the Yulong copper mine and the Lawu copper-zinc deposit.
More foreign miners are willing to get involved. Alastair Clayton of South China Resources PLC, a London-listed outfit operating a copper and molybdenum mine in northwestern China's Shaanxi Province, told Interfax during the summit that the company would certainly consider developing deposits in Tibet with local partners.
Speaking about his company's operations in Shaanxi, Clayton said that foreign miners are a better option than the "mom and pop" operations that have polluted the local water supplies, mainly because they have experienced a tougher regulatory climate back home, Clayton said.
While the state government is anxious to integrate Tibet into the rest of China in order to take advantage of the region's vast stockpile of untapped metal and mineral resources, the investment required to build roads and railways across some of the most treacherous and remote parts of the world is immense, as the country has learned during the construction of the rail link connecting Qinghai to Lhasa.
As it also continues drawing up plans to develop rivers like the Brahmaputra - said to be the most promising source of hydropower in the country - it also risks damaging some of China's few remaining havens of biodiversity and ethnic culture. With all the controversies attached to China's activities in Tibet, the country will be anxious to try to bridge the gap between development and conservation, and to persuade foreign enterprises that their investments are sound. With Erik Dahl.
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