The Reasonable Boundary Of Integration On Mineral Exploitation

Since the "Mineral Resources Law" was promulgated in1986, the mining industryhas developed rapidly and mineral exploration and exploitation have gradually beingconducted under a legal system. Accompanying with prosperity of mining, manyprograms aiming to crush down illegal mining were launched one after another. Inorder to root out the excessive, small, scattered, chaotic " problems that stemmedfrom the mineral development history, China had carried out a vigorous integration ofmineral exploration and exploitation over the whole country since2006. From2005to2010, while the number of mines decreased11.2%from126,700to112,500, theproduction of ore increased73%from5.2billion tons to9.0billion tons, and peoplefatality per million tons of coal production decreased from2.81to0.75. In sum，themining integration had reaped remarkable achievement such as improvement ofmining order, upgrading the level of scale, and enhancement of environmentalprotection and safety measures in mining.While we are cheering for finding a "sword"--the mining integration to fightagainst the disorder of mining, an important question comes up before us: Can miningintegration carry out forever without limitation? Is there a boundary on rationality ofmining integration? If it has, where is the boundary? In order to answer this question,the dissertation summarizes the history, progress, achievements and problems ofmining integration, and analyzes the internal mechanism and dynamic mechanism ofintegration behavior from the microscopic respective by using scale effect, transactioncosts, the marginal cost and revenue, external, resources regulation and othereconomic theories. Then, the article puts forward reasonable boundary and"five-constraint of the mining integration (resources, technology, economy,environment, safety). Next, it builds the logical model of the boundary on rationalityof mining integration and brings the existing mine into four policy areas that close-outarea, reserved area, forced integration area and scientific guide area. We separate the scientific guide areas into the enterprises-initiative integrate area, the government-guiding integrate area and the uneconomic integrate area by analyzing the marginalrevenue and marginal cost of integration. It should take different strategies in differentareas.After that, the study analyzes further the benefits and the costs of enterprise, as wellas varying regulation and impact factors of marginal revenue and cost in miningintegration. Resources and institutional factors are introduced into traditional Cobb-Douglas function of the Solow model of economic growth to explain the miningeconomic growth. It also explains that the mining integrate itself is a process oftransformation of development mode. After an equilibrium analysis, the study pointsout the relationship between the reasonable border and long-run equilibrium point ofthe integration. At last it selects an integration case from Xintianling in Hunanprovince to study the models and theoretical assumptions. At the same time, itevaluates the shortage of the research and the direction of the further study.It comes to four conclusions: First, the integration should weigh the benefits andcosts carefully. It is necessary to guide the integration actively and not to do itexcessively. Second, Enterprise is the main force of integration, so the governmentshould make full use of economic means to expand marginal revenue of theintegration, reduce marginal costs, and enhance the enterprises endogenousmotivation to participate. Third, integration is not a once and for all, the demand ofintegration will exist from a long run. The optimal level of integration does not keepsteady forever and will change gradually. Fourth, the role of government shouldgradually transform a "radical" strong push type to a more "conservative" guidancetype.The paper has four innovations: First, it proposes the rationality boundary problemof mineral exploitation integration, and studies it theoretically for the first time;Second, it analyzes the relevant legislative practice about foreign mining integrationfor the first time, this challenges the generally point that the market economy country has not institutional arrangements to promote integration; Third, it builds logicalmodel of reasonable boundary in mining integration and explains it theoretically.Fourth, it introduces the resources factor and institutional factor into the traditionalCobb-Douglas function, which explains that the essence of integration is the releaseof resources dividends and institutional dividends, and optimizing the model ofmining economic growth.