The Research On Securitization Of Western Mineral Resources

The implement of the strategy of development of western regions in China needsthe back of finance. The features of resources development project are as follows. Thescale of investment is large, the return of cash is slow, the turnover period is long, thereturn rate of cash is relatively low, and the operating risk is big. So the commonfinance instruments such as bank borrowings can’t attract the investors, especiallyforeign capital.The securitization of mineral resources is a kind of financial instrument. It canchange the resource advantage into capital advantage, settling the problem of lackingcash. At the same time, it may introduce the operating concept, managementorganization and system, advanced technology, and all kinds of special talents whichthe development needs. The combination of concepts, management, technology, talentand cash resources will promote the realization of the object of the development ofwestern regions.The securitization of mineral resources is a process which issue the resourcebacked securities based on the minerals’ future cash flows when the mineral propertyrights are specified. This process changes the relationships between the investors andmineral into the form of securities. The resource development companies are financedand the investors gain the income from investments, which realizes the changes fromthe resource advantages to capital advantages, industry advantages, economicadvantages, and competitive advantages, and eventually leads the overall developmentof western economy.The paper deeply researches on the securitization of the mineral resources.Based on its theoretical and practical significance, the paper put the theory ofasset-backed securitization into the use of resource-backed securitization, drawlessons from the securitization of oil and natural gas in foreign countries, build themodel of mineral resource securitization, design the process of western mineral resource securitization, and give special research on the choose of basic assets, thepricing the asset-backed securities, risk analysis and control. Finally, the paper sumsup the native and foreign experiences of natural resources securitization and putforward the relevant measures.The securitization of mineral resources will expand the real economy field ofwestern mineral development and use to capital market field. This will speed up thecapitalization process of mineral resources and innovate the development model ofwestern resources development. This will create large economic profit and marketvalue before developing the mineral resources, which transfers the potential mineralresources reserves to real and available capital. This will promote the western mineralresources advantages change into economic advantages, which provides significantsupport for the changes of western development mode and western societies’sustainable development. If we give scientific demonstration of the securitization andprovide coordinated sets of measures, the conception of mineral resourcessecuritization has the possibility to put into practice.