Backed by the Ministry of Land and Resources, the China Geo-Engineering Corporation and four major mining areas - Shaanxi, Sichuan, Hunan and the Guangxi Zhuang Autonomous Region - started talks yesterday with their potential Thai partners.

China needs high-quality supplies of the mineral - a form of potassium chloride - for a number of uses, including the production of chemical fertilizers.

Although a final deal has yet to be agreed, a preliminary outline for the establishment of a joint venture has already been arrived at between the corporation and its Thai partner.

The resource authorities of the four provinces will be responsible for supplying labour and technical supervision, which are expected to be paid back with shares in the new joint-venture company.

The implementation of the planned Thai project is different from a similar and highly successful operation in Laos, in that the Chinese Government will not be the sole investor.

Li Jindong, vice-director of the Hunan Provincial Department of Geology and Minerals, praised the idea of setting up a holding company.

He said: "It will allow the market to assume more influence over the operation, facilitate future project bids in Thailand and provide jobs for surplus mining labour forces in the major mining provinces."

In order to solve its mineral shortage problem, China has vowed to play a more active role in the international minerals market and is working to attract more foreign investment into the country's cash-starved mining industry.

But their journey into foreign markets may be hindered by the small scale and lack of funds of most Chinese mining enterprises, compared to their international competitors, said Wang Anjian, an expert from the Chinese Academy of Geological Sciences.

"Working together may be their best way forward," he said.

(China Daily January 23, 2003)