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China plans to explore more of its mineral resources and improve its self-sufficiency.

Prospecting is "essential" if the country is to bring outside investment into its cash-starved mining industry, Shou Jiahua, vice-minister of land and resources, said yesterday.

The prospecting data collected provides a solid foundation for follow-up commercial exploration by reducing the risks involved in the search for minerals. These risks account for many of the unknowns confronting mining projects.

"We have seen successful cases in which commercial prospectors follow up data obtained through exploration activities," Shou said.

A source close to the ministry disclosed that large-scale gold deposits, found recently in Northwest China's Xinjiang Uygur Autonomous Region, had attracted investors from Australia. "Negotiations are under way," said the expert, who declined to be named.

China carried out its most radical reform of its mineral exploration industry in 1999. It aimed to turn about 1 million geologists or prospectors from government to enterprise employees. Since then, Chinese geological survey institutes have earned much of their income by turning their prospecting rights into commercial ventures.

Vice-Minister Shou said exploration activities are useful to commercial prospectors, who in turn provide further funds to the institutes.

The ministry published a State Council circular yesterday calling on local governments to provide enough operating funds for geological survey institutes under their jurisdiction. It also urged the institutes to participate more actively in the market.

For example, geological surveyors are now helping local governments such as East China's Zhejiang Province and Northeast China's Jilin Province revise agricultural plans taking soil and mineral composition into account, according to Shou.

The anonymous expert close to the ministry said the move will help the country obtain more minerals to fuel its economic development.

Although the country will "inevitably" play a more active role in the international market, discoveries of new domestic mineral deposits will still be essential. But the lack of funds in the sector remains a major bottleneck, the source said.

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