industrial overlord

Chapter 687 Mining Tycoon
After a joke, Huang Gang said seriously, "Zhenhua, tell me about the current situation of Mutong Iron Mine."

Lin Zhenhua also put away his ridicule and replied: "After repeated negotiations, the Bolivian authorities have agreed in principle to our acquisition of 50% of the mining rights of the Mutong Iron Mine, which is equivalent to 220 billion tons of reserves. Our initial infrastructure construction Work has already started, and a special railway from Mutong Iron Mine to the Pacific Ocean has also started. Our plan is to achieve an annual production capacity of 2000 million tons of iron ore this year."

"It's only 2000 million tons..." Huang Gang was a little disappointed, obviously this number was quite different from what he expected.

Lin Zhenhua said: "This is already the limit. You must know that the Mutong Iron Mine has basically not been developed before. Although it is a large mine of more than 400 billion tons, the annual output is only a few million tons. We can It is not easy to increase the production capacity to 2000 million tons within a year. What's more, the construction of the railway will take some time. Before that, even if our ore can be dug out, it will be difficult to transport it out. "

"That's true." Huang Gang accepted Lin Zhenhua's explanation. He also knew that the construction of the mine would take a certain amount of time, and it was not easy for Hanhua to do this.Opening mines and repairing railways are things that require huge investment, and the acquisition of mining rights also requires a price.In the past two years, Hanhua raised RMB 500 billion to invest in the Mutong Iron Mine. Without such a generous investment, it may be difficult to reach a production capacity of 10 million tons in 2000 years.

Lin Zhenhua continued: "Our goal is to increase the production capacity to 5000 million tons next year, and to reach 2 million tons in three years. By then, BHP Billiton and Vale will only be able to act on our faces and make me angry. Hurry up, I will fight a price war with them, and I will be able to break them out of production.”

"Hehe, Mr. Lin is really domineering. He can push others out of business when he is engaged in industry, and he has such a boldness in mining." Huang Gang said, "I regret it now. If I knew this, the National Development and Reform Commission should give you more support. The sooner you invest, the better.”

"Isn't it too late now?" Lin Zhenhua said, "We will be able to reach a production capacity of 5000 million tons in a year at most. Although it is not enough to meet domestic demand, it is more than enough as a bargaining chip."

Huang Gang nodded and said: "Indeed, having a production capacity of 5000 million tons can also be used as a bargaining chip. But this year's hurdle is still difficult to overcome. You can reach a production capacity of 2000 million tons this year, and the actual output is estimated to be 1000 million tons." A little more, compared to our annual import volume of 2 million tons, it’s still a drop in the bucket.”

"Who said we can only provide 1000 million tons of production?" Lin Zhenhua laughed, "Don't underestimate us, okay?"

"What do you mean?" Huang Gang asked in surprise, "Didn't you just say that you can only reach 2000 million tons of production capacity this year? This level should not be reached until the end of the year, so I discounted it. I guess you can get it this year." It looks like 1000 million tons."

Lin Zhenhua said: "This is only the case of Mutong Iron Mine. Who told you that we only have one Mutong Iron Mine?"

Huang Gang's eyes lit up: "That's right, why did I forget that Chairman Lin has other mines in his hands. How about it, how many mines do you have, and what is the scale?"

"Actually, it's not too many. There are more than [-] places in the world." Lin Zhenhua said proudly, "Our company's operation department has noticed the sharp rise in international iron ore prices and has notified mines around the world. We're starting full production."

"You actually controlled so many mines, when did this happen?" Huang Gang asked.He had always heard that Hanhua had mines overseas, but he didn't know much about the specific situation. He was taken aback by Lin Zhenhua's words now.How unnatural it is for a company to own more than 20 mines overseas.

Lin Zhenhua said: "This has been going on for many years. The earliest one was almost in the mid-80s. At that time, we were engaged in projects in Africa, and sometimes the client was short of funds, so we asked the other party to use mining rights as compensation. In this way, we have obtained more than a dozen iron ore and copper mines in Africa. In addition to Africa, we have also obtained some iron ore in Mongolia, the Philippines, Peru and other countries, all of which are high-grade rich ore.”

This is the vision of a time traveler. Lin Zhenhua traveled through the past from later generations, and he is very clear about the history of the skyrocketing global resource prices after entering the 21st century.Because of such a foresight, he has seized every opportunity to acquire mines around the world since the 80s. Now, the benefits of this acquisition have finally emerged.

"Well, as an official of the National Development and Reform Commission, I really don't have the same vision as you Zhenhua." Huang Gang said sincerely, "You were already deploying the mining industry more than ten years ago. At that time, the entire global mining industry was in a recession. Everyone is eager to sell their mines."

"So we picked a cheap one." Lin Zhenhua said, "The mines we got are basically the price of cabbage. In order to maintain the low-level operation of these mines, we have paid a lot of money over the years."

"It's worth it, it's worth it." Huang Gang said, "It's a lucky moment now. Cabbage has turned into jade. Your investment in the early stage is probably more than 10 times the income now, right? You, Mr. Lin, are about to become a mining tycoon."

Lin Zhenhua said with a smile: "It's still early for a mining tycoon. It doesn't matter if the income is not profitable. We are very satisfied if we can share the country's worries and solve the country's resource bottleneck."

"That's true. I know that Zhenhua has always put national interests first." Huang Gang quickly put a high hat on Lin Zhenhua, but what he said was indeed the truth. Spare no effort, just relying on this point, it is not in vain that the National Development and Reform Commission went to the European Union to stand up for Hanhua.

"We have made preliminary calculations. Before the end of this year, the output of our major mines around the world, plus the past accumulation, can provide at least 5000 million tons of iron ore and 200 million tons of copper ore. All these ores , will be sold domestically to solve domestic urgent needs." Lin Zhenhua expressed his opinion.

Huang Gang said excitedly: "It's really great, it's like sending charcoal in the snow. If you can provide 5000 million tons of iron ore, we will import tens of millions of tons from other channels, so that the dependence on BHP Billiton and Vale will be greatly reduced. No more. They have no means of blackmailing us, so I’m afraid they have to make concessions on the price.”

"Director Huang, let's put our ugly words first. The iron ore and copper ore we provide, you can't discriminate on price. You should give us the fee, but you can't lose a penny." Lin Zhenhua said.This kind of thing should be said first, don't let Huang Gang fish in troubled waters, and lose his profits.

"Of course." Huang Gang agreed. As an official of the National Development and Reform Commission, he really never thought of taking advantage of Hanhua, "We need to use the ore you provide as a weight to beat the price of BHP Billiton and Vale But in terms of the final price, we will definitely consider your interests. You have paid a lot for guarding these mines all these years, and we will feel sorry for not giving you some reasonable benefits."

"That's about the same." Lin Zhenhua said with a chuckle.

Hanhua Heavy Industry Group was able to provide 5000 million tons of iron ore within the year, and quickly informed the Chinese delegation participating in the iron ore negotiation in Rio de Janeiro, Brazil, by telegram.The officials of the Chinese delegation who were in a difficult situation received this news, and their spirits were lifted like spring rain after a long drought. When they sat down again at the negotiating table, their confidence was obviously very different.

"Mr. Dobbins, Mr. Wallack, I would like to reiterate our position. We fully understand the difficulties faced by BHP Billiton and Vale of rising costs and are willing to accept an appropriate premium over 2003 prices. But The price increase we can accept cannot exceed 10%, and this is our bottom line." Zhang Yijin, the chief negotiator of China Iron and Steel Association, said to the negotiators of BHP Billiton and Vale without humility.

"Mr. Zhang, wasn't the bottom line you mentioned two days ago 15%? Why did it suddenly become 10%?" Dobbins from BHP Billiton asked strangely.After negotiating for so long, he always felt that China should be unable to hold back and should raise its bottom line. Who would have thought that the other party would do the opposite and lower the bottom line instead. This is too abnormal.

Zhang Yijin smiled lightly and said, "We recalculated our cost and thought that a 15% price increase was unacceptable, so we readjusted the bottom line and changed it to 10%."

"It's completely impossible." Vale's negotiator, Wallack, said with a disdainful smile, "Our bottom line is also very clear, 58%, there is no room for negotiation."

"This price has been accepted by Japan's Nippon Steel and South Korea's Pohang Steel, and there is no reason for Chinese steel companies to enjoy higher discounts." Dobbins added.

Zhang Yijin said: "You two, I think it is unnecessary for us to play this kind of word game. Nippon Steel and Pohang Steel have equity in both of your companies. In the words of our Chinese, it is not rich and water. If the price of iron ore goes up or not, the money is in their pockets, so if you use these two companies as an example, it has no reference value at all.”

Warack sneered: "If this is the case, I don't think there is any need for us to continue the negotiation. The terms of our two parties have been discussed many times before, and any price increase below 58% is unacceptable to us. Yes. I think if you insist on not accepting our terms, we can only very sorry to stop supplying iron ore to China.”

"Really? That is indeed a very regrettable thing." Zhang Yijin smiled lightly, "If this is the case, we have no choice but to turn to other mining companies to obtain the iron ore we need."

"Other mining companies?" Dobbins shrugged and said, "Are you sure you can get such a large amount of iron ore from other companies? At present, the world's mining companies that can provide more than 2 million tons of iron ore are just two It’s just home. It just so happens that both companies are here.”

This is the power of monopoly. Both companies are international mining giants. Once they jointly raise prices, downstream manufacturers have no room to bargain.Both Wallack and Dobbins believe that, given China's current demand for iron ore, it is completely impossible to leave their two companies.

"Maybe it was like this in the past." Zhang Yijin said, "However, in the near future, there should be a third company that has reached this scale, and that is China's Hanhua Mining Company. By the way, the director of Hanhua Mining Company Mr. Chang Lin Zhenhua also asked me to bring a verbal invitation to the two of you. He wants to invite representatives of your two companies to come to Santa Cruz, Bolivia next month to attend the groundbreaking ceremony of the new mining area of ​​Mutong Iron Mine. .”

Mouton!Both Wallack and Dobbins stared wide-eyed. As senior managers in the mining industry, they knew too much about the Mutong iron ore reserves.If this iron mine can be fully put into production, its output will be able to kill all the existing iron mines of BHP Billiton and Vale.

Fortunately, this giant iron mine has been under low-level development since its discovery, with an annual output of only a few million tons, and has no influence on the iron ore market.The reason for this situation is that the Bolivian government lacks sufficient funds for development, and the second is limited by traffic conditions.

However, the Chinese are now eyeing this iron mine. If this is true, then the situation will change significantly.Who doesn't know that the Chinese have plenty of money now, and throwing out billions of dollars to develop an iron mine is just a drop in the bucket.As for the transportation conditions, in the final analysis, it is a matter of investment. Is the construction of the railway still a complicated matter when the funds are in place?
God, when did this happen!Those damn marketing managers in the company didn't even know such important information.

"I'm sorry, Mr. Zhang, are you saying that China intends to invest in the Mutong Iron Mine?" Dobbins asked anxiously.

Zhang Yijin put on a tired look, and replied: "It's not intentional investment, but it's already in the process of investing. If I'm not wrong, the Mutong Iron Mine is already producing iron ore right now. Chinese Han Last year, Hua Mining Company acquired 10% of the mining rights of the Mutong Iron Mine at a cost of US$50 billion for 25 years."

"50% mining rights? Is that true?" Volak asked innocently.

Zhang Yijin chuckled: "Is it true? I think Mr. Warack can go and see for himself. Hanhua Mining Company has already sent you an invitation. As for me, after finishing the negotiations here, I will also transfer to Bolivia to go to Take a look at the situation on the scene. How about it, gentlemen, do you think our negotiations can be concluded?"

Wallack and Dobbins looked at each other, and said in unison: "No! We think... a range lower than 58% should be acceptable."

(End of this chapter)