The Panzhihua Iron and Steel Base is located in a paleorift belt west of the middle section of the Kang-Dian axis. It is the complicated geological structures of the rift valley belt that makes the area have favourable conditions for mineralization. There is a complete range of types of mineral resources and the amounts of their reserves are great. The geological reserves of Titanium and Vanadium ores in Panzhihua are both the greatest in the country. Titanium ore is also the richest and Vanadium ore is the third richest in the world.The mineral resource system of the Panzhihua Iron and Steel Base consists of kernel resources (including iron ore and coking coal) and auxiliary raw material resources (including power coal, flux limestone, dolomite, refractory clay, magnesite ore, etc.). There is a pendulum-like transport system between Panxi and Liupanshui for kernel resources transportation, transporting iron ore from Panxi to Liupanshui and coking coal from Liupanshui to Panzhihua. The mineral resources system and pendulum-like transport system of Panzhihua Iron and Steel Base can basically meet its needs of mineral resources.The formation of these two kinds of systems makes it necessary that the second base of Panzhihua Iron and Steel must be built in Panxi area (from Dukou to Xichang), otherwise it will lead to grave consequences-