The Intersection of the Future: Shandong Gold’s ‘Dual Transformation’ Model

At the shores of Laizhou Bay, Sānshān Island lies quietly between the sea and sky. Originally a solitary island in the sea, it became a peninsula due to geological changes, with three towering peaks, known since ancient times as the “Three Sacred Mountains.” Here, the passage of time intersects in parallel—filled with ancient legends, once-thriving fishing ports, and the industrial marks of a sweeping era of change. Over the years, the mythical “Key to the Mountain” has evolved from an abstract imagination into a tangible reality, now in the hands of a new generation of mining professionals. With the advancement of scientific exploration, Sānshān Island’s gold mine, which began operations in the 1980s, has risen to become a key state-owned mine. Multiple generations have turned the legendary “gold mountain” into real gold production, establishing it as a leading production base in the country.But what’s truly remarkable today is that the Sānshān Island gold mine is not the dusty, noisy mining area that people may expect. Instead of exposed mountains and piles of waste rock, the view is one of greenery, with the landscape seamlessly connected to the coastline. Waste rock is now 100% recycled, tailing ponds are gradually transformed into ecological parks and resorts, and the vision of a “mine without visible mines” has become a reality.Meanwhile, hundreds of meters underground, the mining site looks more like a futuristic factory.

Remote-controlled rock drilling rigs perform precise operations, unmanned electric mine carts shuttle ore, robots and drones patrol the factory, and real-time data is transmitted to the mine’s integrated control platform through 5G and F5G industrial networks. The mechanical automation rate of the main mining machinery has exceeded 70%, and once high-risk operations have been replaced by “minimized human presence” or even “automation.”From the mythical “sea mountain” to today’s intelligent mine, the Sānshān Island gold mine has become a mirror of China’s non-ferrous metal industry transformation. The force behind this transformation is Shandong Gold Group, a key state-owned enterprise in Shandong Province.In July this year, the 2025 Fortune Global 500 list was announced, and Shandong Gold ranked 465th with an operating income of $34.76 billion, marking its first appearance on the list. It became one of five companies from Shandong Province to make the cut. The story of Sānshān Island’s gold mine is a microcosm of this company’s rise to global prominence.However, the true panoramic story is far grander than just one mine. As the world economy seeks recovery from the impacts of de-globalization and geopolitical uncertainty, another, deeper transformation crisis is becoming increasingly evident. Climate change is driving a reshaping of the energy structure, while the digital and smart revolution is restructuring traditional industries.

For most sectors, “intelligence” and “greenness” are no longer optional; they are essential.The mining industry, as a foundational industry of human civilization, is no exception. For a long time, mining has been associated with high energy consumption, high emissions, and high risks. However, today, global capital markets have integrated ESG (Environmental, Social, and Governance) metrics into corporate valuation models. Thus, mining companies must demonstrate that they can not only extract precious metals and energy from beneath the earth but also “dig” out a sustainable future through institutional and technological transformation.In China, the mining sector is particularly unique. As a key support for manufacturing and clean energy industries, mining is both a fundamental guarantee of economic security and a critical area for carbon emission reduction. Since the 18th National Congress of the Communist Party, the development of green mining and mine construction has been incorporated into the national “13th Five-Year” and “14th Five-Year” plans, as well as in documents such as the Opinions of the Central Committee of the Communist Party of China and the State Council on Promoting the Construction of Beautiful China and Implementation Opinions on Accelerating the Construction of Green Mines.

At the implementation level, major mining areas and enterprises nationwide have responded actively and are exploring sustainable development paths.Shandong Gold, headquartered in Jinan, is advancing both “intelligence” and “greenness” as part of the same engineering system, aiming to reconstruct the operating logic of China’s mining industry. By integrating “ore extraction,” “ecological restoration,” and “algorithmic management,” Shandong Gold no longer focuses solely on output but also takes on the social responsibility of achieving “dual carbon” targets and adapting to the digitalization wave.In fact, this transformation is not just a simple “compliance with policies” or “technological upgrades” but a redefinition of new competitive advantages. Today, the mining industry’s value chain has evolved into a system of “safety — intelligence — greenness — responsibility.” Any single missing link would cause a loss of competitive edge in the global market. Therefore, Shandong Gold’s transformation is a leap from a “resource-based enterprise” to a “technology-driven, ecologically symbiotic” mining group.Digitalized Mining Laboratories.As the region with the largest gold reserves in China, the underground corridors of the Shandong Peninsula have witnessed different histories: from manual mining to mechanized operations, from shallow gold veins to deep mining.

Today, these operations are integrated into a new development logic — data, algorithms, and robotics.For such a traditional industry, Shandong Gold’s intelligent transformation was not a hasty decision but the result of years of planning and a top-down systematic reconstruction. It began with a blueprint. Shandong Gold’s “14th Five-Year” Digital Transformation Plan outlined three key directions: intelligent production, excellence in operations, and shared services. Around this top-level design, the company launched the “Five-in-One” project:One Blueprint — Unified planning and phased implementation, preventing each mining area from operating independently.One Network — Utilizing SD-WAN, 5G, and F5G integration to create a unified “network” for the entire group.One Platform — Co-building a big data platform with Huawei, unifying production, safety, and management data governance.One Pilot — Investing 500 million RMB to build an “internationally leading demonstration mine” — the Sānshān Island gold mine — and establishing an International Demonstration Mine Promotion Center.One System — Focusing on practicality, effectiveness, and impact, ensuring long-term mechanisms are formed from systems, standards, to performance assessments.As a result, the Sānshān Island gold mine has become an industry-leading “digital laboratory.”

Here, automation rates exceed 90%, with some production roles achieving an “office work mode.” Efficient collaboration among remote-controlled rock drills, crushers, and unmanned electric carts has made the entire ore and business flow fully visible. Main production processes are gradually being “minimized in human involvement” or even “fully automated.”But no transformation is possible without substantial investment in resources; to ignore practical needs would be to build “castles in the sky.” To date, Shandong Gold has invested over 1.9 billion RMB, upgrading more than 1,500 sets of equipment and automating 630 fixed facilities. The overall automation rate of the group has risen to over 90%, and 1,730 fewer underground workers are required, saving 262 million RMB in labor costs. These figures not only reflect optimized financial metrics but also indicate a systemic enhancement in “safety”—the core bottom-line logic of the industry.Moreover, with the rapid evolution of new information technologies such as 5G, AI, and cloud computing, the “information ecosystem” of mines is being profoundly transformed. In the past, labor-intensive industries like mining often had separate data management systems across departments, leading to “data silos.” This hindered effective data exchange, resulting in inefficient operations and inaccurate decision-making.

Today, through the ShanJin Cloud and the mining big data platform, Shandong Gold has integrated geological modeling, reserves calculation, and scheduling into one seamless process. The introduction of Vulcan 3D mining software has greatly improved reserve calculation and design efficiency, fully eliminating paper-based diagrams and breaking through the “ore flow” and “business flow” barriers.Shandong Gold’s Symbolic Transformation: A New Narrative for the Mining Industry.The symbolic significance of Shandong Gold’s transformation lies in the fact that traditional mining is no longer just about “upgrading hardware” through “equipment and labor investment” but rather represents a transformation of the “operational language” that reshapes industry rules. From the flow of ore to data governance, from team roles to assessment logic, everything has been integrated into a new algorithmic framework. Furthermore, Shandong Gold is trying to apply this methodology to replicate the experience of the Sānshān Island Gold Mine at other mines like Jiaojia, Xincheng, and Hongling, pushing the entire group—and even the whole industry—towards a future grounded in intelligence.A New Value Logic for the “Garden-style Mine”.If intelligent transformation reshapes the “operational language” of the mining industry, then the green transformation has reshaped its “value logic.” Over a decade ago, when “green mining” was still a conceptual topic discussed in academia and policy circles, Shandong Gold had already begun practical exploration.

The company insisted on obtaining the maximum resource (value) with the least ecological disruption and proposed a vision of “ecological mining,” making a poetic promise to “guard the green mountains and clear waters with heart, and benefit the Earth’s home with love.”Since 2010, Shandong Gold released the country’s first Shandong Gold Group Green Mining Construction Standards that were stricter than national and local regulations. It then introduced the Shandong Gold Group 2018-2020 Green Mining Construction Plan and the Shandong Gold Green Mining Group Implementation Plan. Since the beginning of the “14th Five-Year Plan,” Shandong Gold has clarified its value concept of “Safe Mountain Gold, Ecological Mountain Gold, Vital Mountain Gold, and Humanistic Mountain Gold.” On the foundation of building a green mining group, the company issued the Opinions on Further Strengthening Ecological Mining Construction and established a dynamic management mechanism to incorporate green and low-carbon principles into every stage of mining development.Maximizing Ecological and Economic Benefits.In terms of material and resource utilization, Shandong Gold has challenged the traditional image of mining as “high energy-consuming” and “highly polluting,” instead pursuing the “maximized benefits” of both ecology and economy. Mines like Xincheng, Jiaojia, and Sānshān Island have achieved scaled mining operations through integration.

By optimizing mining methods and beneficiation processes, the company has effectively reduced dilution and loss rates while improving ore recovery rates. Utilizing an economic benefits analysis model, Shandong Gold has scientifically adjusted the grade boundaries in its production organization, making full use of low-grade ore resources.Waste rock is 100% recycled for use in backfilling mined-out areas, crushed for underground engineering, used for tailings dam reinforcement, or sold externally. After classification, tailings are partially used for filling, while the rest is sent into the production of aerated bricks and ceramic aggregates, creating new value growth points. Meanwhile, another significant challenge in mining—the waste and pollution of water resources—has been addressed with a practical approach. Shandong Gold prioritizes water recycling in its operations. All wastewater produced in the process is reused in beneficiation, while treated domestic sewage is used for greening and dust reduction. Mine water is primarily used for production and sprinkling, with the remaining treated water meeting discharge standards. The company is also actively exploring integrated uses of mine water for agricultural irrigation and ecological replenishment to increase water resource efficiency.

A Garden-style Mining Model of Ecological Transformation.Shandong Gold’s efforts in the full-chain governance of resource use have already yielded remarkable results. As of now, all of the company’s active mines have been included in the national or provincial-level green mine lists, and the group has been awarded titles like “China Green Mining Group,” “China Green Ecological Research Base (Typical Case of Mining High-Quality Green Development),” and “Outstanding Contribution to Green Mining.” Taking Guilaizhuang Mine as an example, what was once a waste rock pile and open-pit mine has seen Shandong Gold invest nearly 150 million RMB, earning the project the title of “National-level Mine Park” and “National Industrial Tourism Demonstration Site.” At the Sānshān Island Gold Mine, the closed tailings pond has been converted into a seaside resort, with an investment of 70 million RMB to build a gold natural history museum featuring five themed exhibition areas. The company has also developed a 42,000-square-meter coastal sightseeing area and ecological restoration demonstration zone.Transforming Industrial Remains into Ecological, Cultural, and Touristic Value.In Shandong Gold’s narrative, industrial remnants have been endowed with multiple values—ecological, cultural, and tourism-related. The narrative of “green mining” no longer remains at the “compliance” level.

Mines are no longer crude industrial scars but have gradually intertwined with ecology, community, enterprise, and public space, becoming a symbiotic part of the future and an important pillar in gaining market and public trust.A Dual Helix of Positive Forces: Intelligent and Green Transformation.In Shandong Gold’s transformation narrative, intelligence and greenness intertwine like a double helix, forming a new production logic. The former changes the way operations are conducted, while the latter alters the value logic. The intersection of these two forces represents the core competitiveness of future mining. The most intuitive manifestation of this dual helix is the improvement in energy efficiency. Shandong Gold has issued several strategic documents, such as the Shandong Gold Group Carbon Peak Action Plan and the Implementation Opinions on Fully Implementing the Group’s Carbon Peak Plan, outlining a carbon reduction roadmap for the entire industrial chain.Optimizing Energy Structure for Low-Carbon Development.In energy structure optimization, Shandong Gold has fully promoted the conversion of coal to gas and coal to electricity. Except for mines in Inner Mongolia, all coal-fired boilers in Shandong Gold’s mines have been eliminated, and those in Inner Mongolia have been retrofitted for ultra-low emissions. Clean energy, such as solar and geothermal energy, is also accelerating its application. By the end of 2024, Shandong Gold aims to use 150 million kWh of “green electricity” annually, completely transforming the traditional energy structure dominated by “thermal power” and actively exploring future energy models.

Technological Innovations and Energy Savings.Furthermore, in Shandong Gold’s production processes, the synergy of intelligence and greenness has notably altered operational modes. “New technologies” and low-carbon environmental protection concepts have become the main drivers of the transformation. Over the past few years, Shandong Gold has overcome 88 key challenges in production processes, revamping traditional high-energy, heavy-load processes. For instance, in equipment upgrades, engineers replaced traditional three-phase asynchronous motors with permanent magnet motors, providing higher efficiency for ball mills. This innovation saves 3 kWh of electricity for every ton of ore processed. They also introduced permanent magnet direct-drive flotation machines in the flotation process, achieving a 15% reduction in energy consumption, creating new energy-saving opportunities. The introduction of air suspension high-speed centrifugal blowers has led to an even greater electricity-saving rate of 38%.In addition, underground lighting systems that were once constantly on have also undergone an upgrade. At the Sānshān Island Gold Mine, microwave induction lamps have been introduced for underground lighting, achieving an energy-saving rate of 70%. This seemingly small change has significantly alleviated the long-term energy pressure on the mine’s operations.Achieving Sustainable Development Through Technology and Innovation.

These seemingly scattered process improvements have, at the systemic level, resulted in a stable improvement in the mine’s overall energy efficiency curve. Combining scientific research with on-site application, this dual helix of transformation extends beyond just energy conservation. Shandong Gold has focused on efficient, green extraction of deep resources, mining disaster monitoring, tailings filling, and comprehensive utilization of tailings, breaking through multiple technological bottlenecks. The company has won one national science and technology progress award and 13 provincial-level awards.Reconstructing Corporate Competitiveness.Shandong Gold’s transformation story isn’t just about saving costs or meeting compliance—it’s a blueprint for redefining competitiveness in the mining industry. The company is transforming the “Sānshān Island experience” into a broader “methodology” for its entire operation. Shandong Gold is shifting from isolated “mine stories” to a more competitive “capital narrative” in the market, using standardized processes and institutional frameworks to ensure the success of its transformation.In this way, Shandong Gold’s practice is demonstrating that Chinese mining can not only meet international standards but can also set new benchmarks in combining intelligence and green practices, transitioning from a “follower” to a “leader” in the global mining industry. The future of mining is not just about mineral yields and price curves, but a comprehensive equation of technology, ecology, and governance.