After initial exploration by the Canadian company Placer Dome, Tanjianshan is now controlled by the Sydney-based Sino Mining International (SMI), part of the China National Non-ferrous Metals Corporation. SMI is currently trying to raise US$10 million to develop the deposit.

The Australia-Tibet Council’s research officer, Gabriel Lafitte, said “SMI is likely to be sucessful in this project through its combination of incorporation in the Cayman Islands, operations in China and headquarters in Australia. SMI will manage to minimise tax, use low cost production with privileged insider access in China, and access Australian capital and expertise through its Sydney base.”

In conjunction with its exploration activities, SMI has joined with five major Australian and international mining companies — Pasminco, Billiton, North, Cominco and AngloGold — in funding the Australian Mineral Industries Research Association Limited (AMIRA) to develop a commercial database of mineral deposits along the China-Tibet frontier, including the entire Yangtze basin.

AMIRA has commissioned the University of Tasmania’s Centre for Ore Deposit Research to develop a database that will involve “collaboration with key Chinese research institutions”, enabling privileged access to Tibetan minerals data that until now have been closely guarded.

The region around Tanjianshan in far northern Tibet supports extensive forests, open grassland and montane steppe. The broad, flat, fertile valleys provide ideal grazing land. These slopes, although cold, are well watered and have been home to Tibetan nomadic herders and their yaks for centuries. The Chinese government considers the area as “wasteland”.

“Not only is this forest and pasture area under threat from the direct impacts of mining, but the Tibetan experience of Chinese mining almost invariably involves severe deforestation of the surrounding area for mine infrastructure and housing”, Lafitte said.

In addition to the mining activities, Tibetan communities in this region have been displaced by China’s plutonium and weapons manufacturing plants nearby in the Gobi desert, and a massive influx of Chinese Muslim settlers financed by the World Bank. These transmigrants, brought to Tibet to increase the Chinese population and to provide labour for other nearby projects, have raised the population density to the limits of the region’s carrying capacity.

Despite the influx of economic projects, the majority of the benefits will be gained in metropolitan centres distant from Tibet. China has made minimal investments in “soft infrastructure” for the local Tibetans in terms of health care, education and skills training.

Lafitte worries that, under these circumstances, it is likely that the beneficiaries of mining gold will be the Chinese government. “The social and environmental costs will be borne by Tibetan communities, who may have to live with the consequences for generations to come, long after the 37 tonnes of gold at this mine are gone”, Lafitte said.

A study by the United States Geological Service identified 30 further gold deposits in Tibetan areas of Gansu and Sichuan, some of them as big as Sino Mining’s Tanjianshan mine. In the current economic climate, where China’s gold demand runs higher than domestic supply, future demand is likely to grow sharply as China allows private ownership of gold and open trading of gold for the first time in many decades.

In addition to gold, the National Economic Atlas of China lists deposits in Tibet’s far north of iron ore, fluorite, tungsten, asbestos, limestone, chromium and magnesium. In 1999, the China Mining Industry News announced discoveries there of copper, lead, zinc, diamonds and jadeite. If these finds do constitute a new mineral province, as the newsletter claims, SMI’s gold exploration and extraction may be the start of more intensive exploitation.

The Australia-Tibet Council questions the involvement of the mining industry in both Tanjianshan and future mining activities in Tibet, fearing that the Tibetan people will be further marginalised and displaced. “The Tibetan people will be driven upslope, out of the valleys and forests, to eke out an existence in the last remaining areas below the snowline”, Lafitte said.