Gold mining in China began in the Song Dynasty (960—1279 AD) and has increased steadily throughout the years, eventually making China the number one gold-producing country in the world. It has kept this top spot since 2007.
There are two different methods by which gold is mined in China. Open-pit mining is employed when gold deposits are close to the surface. Pits are built on an angular rather than a vertical basis in order to help prevent the soil erosion that can lead to rock slides. When the gold resources are depleted, these sites are often used as solid waste deposal sites for local villages and towns. When the deposits are deep, underground tunnels are dug to extract gold through shafts, which are sometimes several miles long.
When gold particles in the earth or rock are very small, more complex extraction processes are used. The earth or rock is crushed into gravel-sized chunks; and water is then added to the milled earth and mixed with cyanide and zinc — an element that readily bonds with gold. This bonding makes the gold easier to separate from the earth. The bonded material is then smelted at a high temperature until the gold is extracted from all other impurities. Because using cyanide is so dangerous, China has taken steps to make sure that antidotes are always available for their workers in case of an accident.
In addition to mining gold, China is buying the precious metal in record amounts to act as a hedge against inflation. 490 tons of gold were bought by the Chinese in 2011 — double the amount the country purchased in 2010. Buying gold or investing in Chinese mining is a good move to hedge against inflation due to the high demand for gold among consumers for jewelry and other trinkets.
Fortunately for Chinese investors and those that save in gold and precious metals, there are no shortage of options. Chinese gold bullion coins come in many sizes, as small as 1/20 oz and as large as one kilogram and generally, the lowest premium coins are the pandas from the current year. They are available from approximately 6% over melt (or metal values) with the premium increasing for fractional coins, that is to say items under one ounce in weight (due to the higher cost per coin of production). It is not only the Chinese who are drawn to the panda coin series for gold and silver ownership and investment however. Americans have been buying Chinese coins since 1979 when the China Mint first released collectible modern coins and in Europe, panda coins are also sold as an alternative choice to the more generic gold bullion coins of other countries, whose design is uniform in appearance and does not change year to year like the pandas. ChineseCoins.com is the one-stop resource for collectors and investors to access bullion and collector proof coins, we ship worldwide too!