China on Monday defended its large-scale mining operations in a mineral-rich Tibetan county adjacent to its border with Arunachal Pradesh, asserting that the area belongs to it and Beijing enjoys full sovereignty to conduct such geological activities there.

China has begun large-scale mining operations in Lhunze county under its control adjacent to Arunachal Pradesh where a huge trove of gold, silver and other precious minerals valued at about US$ 60 billion has been found, the Hong Kong-based South China Morning Post had reported on Sunday.

"The area mentioned by the report totally belongs to China," Chinese Foreign Ministry Spokesman Lu Kang told a media briefing here when asked about the report.

"China conducts regular geological and scientific research on its own territory. It is completely within China’s sovereignty. China always attaches importance to protecting ecological environment. We hope relevant media can refrain from hyping up based on groundless report," he said.

China claims Arunachal Pradesh as part of southern Tibet. The India-China border dispute covers the 3,488 km long Line of Actual Control (LAC).

About a part of the report which said China is rapidly building infrastructure to turn the area into another South China Sea like scenario, Lu said, “I can tell you that China’s position on the India-China boundary is consistent and clear cut. China never recognised the so-called Arunachal Pradesh."

He said China and India are engaged in negotiations to resolve the boundary issue and to seek a fair and justified solution to the issue.

"Before we resolve the issue, we hope India can abide by the agreements between the two countries and abide by the Line of Actual Control and stop hyping up and work with China to jointly maintain peace and stability in the border areas," he said.

Projecting the mining operations as part of China's move to take over Arunachal Pradesh, the Post report said people familiar with the project say the mines are part of an ambitious plan by Beijing to reclaim South Tibet. "China's moves to lay claim to the region's natural resources while rapidly building up infrastructure could turn it into 'another South China Sea' they said," the report claimed.