Chapter 1026: The Conversation in the Consulate General

Although the development of the domestic steel industry in the 1990s was not as crazy as it was after 2002 and was not highly dependent on the iron ore resources of Australia and Western Australia, it does not mean that the domestic steel industry has nothing to do with the iron ore resources of Western Australia.

As early as 1988, China Jinjin Import and Export Corporation jointly opened China's first overseas resource investment project - Chana Iron Mine, in Western Australia, in Western Australia, with Australia's Hammersley Iron Mine Company (the world's third largest miner Rio Tinto in Western Australia). China has a 40% interest in Chana Iron Mine.

The Australian Western Australia region imports more than 3 million tons of iron ore to China every year almost all are provided by the Chana Iron Mine. For this reason, China Gold Control Import and Export Corporation has set up a branch in Perth, Zhongzhi Australia Company to be responsible for related matters.

It is a pity that MCC Corporation's overseas iron ore resource expansion pace took this commendable first step in 1988, but it stagnated for nearly 20 years. It was not until a few years later that the domestic steel industry was almost broken by international miners. It was not until the next step of overseas resource layout was thought of.

Zhang Ke looked at Jia Zhiyi with a bright look. He had obtained Jia Zhiyi's detailed materials before. Jia Zhiyi, who is 46, is also a capable official in the domestic context. Even if Zhongzhi Corporation does not have the intention to further expand the layout of iron ore resources in Western Australia, he is also actively promoting the increase of the annual output of the Chana iron ore from the current three million tons to ten million tons.

Huang Mingsheng, economic counselor of the Chinese Consulate General in Perth, saw that Jia Zhiyi, general manager of MCC Australia, actually looked admiring Zhang Ke and Zhang Ke's expression calmly accepted it. He felt very strange, but it was inconvenient to ask on the spot.

Jia Zhiyi seemed to guess Huang Mingsheng’s doubts and said with a smile: “Counselor Huang just told me about the various wonders of Huaxi Mining after its establishment. Do you know who was the initiator of Huaxi Mining?”

"Isn't it you MCC?" Huang Mingsheng asked.

"..." Jia Zhiyi laughed and said to Zhang Ke and Ye Jianbin, "MCC is really a great honor for Kumho. No one outside knows that you Kumho is the real initiator of Huaxi."

Zhang Ke smiled and said, "It is real that you can enjoy the benefits. We don't care much about the things on the surface."

Jia Zhiyi told Huang Mingsheng: "Some things were not promoted by the media. In fact, Kumho is also one of the major shareholders of Huaxi Mining. The establishment of Huaxi Mining was first advocated by Kumho. The pass and assists were completed by Kumho. MCC Corporation only kicked the ball at the end..."

"A kick is the most eye-catching thing," Ye Jianbin said with a smile, "Mr. Jia also likes football?"

Zhang Ke touched his nose. Ye Jianbin was half a football fan and even proposed to sponsor a football team. Zhang Ke told him that he would rather sponsor the women's football team than the men's football team. Ye Jianbin thought about it before giving up.

The news about Huang Mingsheng in Perth is indeed a bit blocked. He has not returned to China since 1994 when he came to Perth as an economic counselor. The economic affairs with Perth are really rare. His most common job is to participate in activities of local Chinese and overseas Chinese communities. In addition to cultivating one's own character, his business is inevitably a little slack. His understanding of the domestic economy is even worse than that of the managers of overseas companies in Shanghai. He even thinks that the famous Aida Group and Kumho Commercial are two completely unrelated companies.

As for how big the scale of Jinhu commercial business is, Huang Mingsheng did not have an intuitive understanding. He only knew that Ye Jianbin was his boss, deputy secretary of the Party Committee of the Ministry of Foreign Economic and Trade, and the nephew of Deputy Minister Ye Zhenmin.

Of course, Huang Mingsheng also knew about Huaxi Mining. Xinhua Neijing reported on the full version of Huaxi Mining's integration of the domestic rare earth industry.

In the 516 case and the Zhangzhou case, the central and local governments strengthened the rectification of the rare earth industry. Coupled with the establishment of the rare earths and strict restrictions on foreign capital entering the rare earth smelting industry, the price of light rare earths in the international market has more than doubled in one year, and the price of heavy rare earths has increased by nearly three times. This is the first increase since China's release of rare earth exports in 1996 and international rare earth prices continued to decline, but it rose to a surprise. With the actual rare earth export volume being cut by nearly half, foreign exchange income has increased instead of falling.

After the establishment of Huaxi Mining, the central government designated MCC Corporation to join hands with local governments to integrate the middle and upper reaches of the rare earth industry, intending to form two major rare earth industrial groups in the south and the north to complete the monopoly layout of the entire rare earth industry.

In the caliber of internal and external publicity, Kumho must deliberately ignore it.

The domestic basic resources and energy industry are either completely closed and only allowed to enter state-owned capital, or there are restrictions on the liberalization of non-public capital, and there is no reason to only liberalize one private capital. The process of Kumho being able to participate in Huasi Mining is very tortuous, and the situation is very special. Of course, it cannot be published to give the public an inappropriate illusion.

Huang Mingsheng also knew that Huaxi Mining was of extraordinary nature, and thought that Jinhu was both the initiator and the ability to hold shares. The relationship behind this was really hard. He used to think about his connections and thought in his heart whether he could do this with the ability of Minister Ye Zhenmin? But he did not think about how much role Jinhu played in the establishment of Huaxi. In fact, although Jinhu only holds 12% of Huaxi's equity, its influence on Huaxi is greater than that of the nominal Huaxi promoter MCC Corporation.

Consul General in Perth Zhang Shuhe was at the administrative level at the deputy bureau level. He was an official affiliated with the Ministry of Foreign Affairs. Although he knew more about Kumho, he did not overly enthusiastically run to the gate of the Consulate General to pick up Zhang Ke, Ye Jianbin and others.

In addition to local Chinese and overseas Chinese representatives, there were also representatives of some Chinese-funded institutions or traders stationed in Perth. These people were very enthusiastic when they saw Jia Zhiyi.

Although the domestic steel industry is not dependent on Western Australia's iron ore resources, domestic steel mills and iron ore traders with a little vision have set up offices in Perth to engage in iron ore trading business. It is not uncommon for Chinese merchants in Perth, but it cannot be compared with the grand occasion where Perth is full of Chinese iron ore traders after 2003.

Since the iron ore imported from Western Australian stone in China mainly comes from the Chana Iron Ore, which MCC Australia participated in the joint venture, these traders naturally regard Jia Zhiyiru, general manager of MCC Australia, reborn parents.

When a large number of mining areas, railways, seaports and other logistics channels are controlled by two major ore vendors, BHP Billiton and Rio Tinto and Japanese chaebols, it is impossible to obtain excess profits simply by engaging in iron ore trade, and also bear certain risks, but it is better than nothing. It is always a good thing that domestic iron ore procurement can be extended to Western Australia.

At the lunch banquet, although Zhang Ke, Ye Jianbin and his group were the guests of the main, Jia Zhiyi stood in the restaurant and became the protagonist.

Zhang Ke and Ye Jianbin also had headaches to deal with too many people, so they sat down with Zhang Shu and Consul General to talk about some serious matters. Jia Zhiyi and Huang Mingsheng dealt with it for a while before returning to the main table.

"Thank you, Consul Zhang, for organizing such a luncheon, so that we can have the opportunity to meet and talk with Chinese and Chinese-funded institutions in Perth," Zhang Ke introduced his people to Zhang Shuhe. In addition to Ye Jianbin, Sun Jingxiang, Zhai Danqing, Jinhu Commercial and Nanyang Shipping have set up offices in Perth, and the relevant persons in charge all attended the banquet. He directly told Zhang Shuhe, Jia Zhiyi, and Huang Mingsheng about their initial intentions for this trip. "We are here to conduct a business inspection in Western Australia this time. Mainly, after the technical transformation of the Dongshan Iron and Steel plant, the current controlling Dongshan Iron and Steel, needs to import 1.8 million tons of high-quality iron ore from Western Australia every year. After the Xinting ten-million-ton steel industry base is completed, after the completion of Dongshan Iron and Steel and Donghai Steel, the demand for high-quality iron ore raw materials will increase to 25 million tons. We hope that Western Australia can provide at least 10 million tons..."

Of course, Zhang Ke's ambition is far more than 10 million tons, but in 1999, when the annual total iron ore output in Western Australia is less than 100 million tons, the ambition to expose the ambitious targets too early will make Chinese officials question it, and it will also cause the firm counterattack of BHP, Rio Tinto and Japanese chaebols too early.

Even a target of 10 million tons is enough to make the Chinese officials on the table open their eyes wide.

Jia Zhiyi's eyes were only shiny. MCC had been operating in Western Australia for eleven years, and the annual output of the Chana Iron Mine was only 3 million tons. He tried his best to persuade the head office to expand its investment in the Chana Iron Mine to increase the annual output to 10 million tons. The head office hesitated for more than a year, but did not make the final decision happily. Kumho reported a 10 million tons at once when he first came to Perth. This appetite was really amazing.

Jia Zhiyi can be said to be very familiar with the domestic steel industry. At least now, the import rights of raw materials from Donghai United Steel and the future ten-million-ton steel industry base have not been assigned to Kumho Commercial; in fact, the import quota of Kumho Commercial is only the 1.8 million tons of Dongshan Iron and Steel Plant.

Jia Zhiyi asked: "Kumho really wants to import 10 million tons of iron ore from Western Australia every year. It seems that he should go to Rio Tinto or BHP to discuss... Even if the annual output of the iron ore increases to 10 million tons, I think MCC Corporation will not make the decision to provide all of these ten million tons to Kumho."

The traders sitting on the table next to them stood up. The iron ore from the Chana Iron Ore was to be rounded up. If they stayed in Perth, they could only drink the northwest wind and had to pat their butts and return home.

Zhang Ke smiled slightly and said, "The ten million tons we need do not account for the amount of Chana iron ore, nor do we cooperate with Rio Tinto or BHP. We want to invest in establishing our own supply base..."

Zhang Ke's words were like a huge rock thrown into a lake, which immediately caused a thousand waves.

Consul General Zhang Shuhe, Economic Counselor Huang Mingsheng, General Manager Jia Zhiyi, and others did not speak, but turned their eyes to other places. The people on the other table suddenly started to talk, all of which were suspicious and disbelief. Some even chuckled disdainfully, just thinking that Zhang Ke was bragging here.

Jia Zhiyi also doubted whether Zhang Ke knew exactly what it meant to invest in the construction of a 10 million tons of iron ore supply base in Western Australia, but it was not convenient to question it in person. Even if Zhang Ke brags here and puts forward a grand and unrealistic goal, everyone should join in the fun. There are many people in China who like to talk empty talk, and there are not many people in Kumhu.

Jia Zhiyi would never poke it in public, but the guests at the banquet would not take care of others' face very much. Someone immediately stood up and said, "Do you know how much annual throughput capacity of Western Australia's harbor? Do you know how much railway transportation capacity is from the Western Australia mining area to the harbor? BHP Billiton and Rio Tinto's two major miners in Western Australia's subsidiaries have similar iron ore production capacity, which has filled the Western Australia harbor and railway transportation capacity. Except for your workers, they are all strongmen, who can throw ore from the Western Australia mining area across the sea back to China with bare hands, otherwise..."

"What he said is funny," Jia Zhiyi smiled and wanted to help Zhang Ke resolve the embarrassment, explaining, "MCC has always wanted to increase the annual output of the Chana iron ore from three million tons to ten million tons, but this is not just a matter of increasing investment in the mining area, but a problem of how to coordinate and solve the increased capacity of 7 million tons. Even if Rio Tinto has 60% of the interests in the Chana iron ore, it is still very difficult to increase the capacity of 7 million tons. The existing mining railways and iron ore deep-water terminals in Western Australia are almost all for Rio Tinto. BHP and the chaebol forces behind these two miners have been controlled. Unless the demand for this ten million tons of iron ore of Kumho is purchased from them, it will be difficult to transport the railway lines and terminals from them to the railway lines they control - the railways and ports in Western Australia are all privately invested."

A middle-aged man with a more honest appearance also came over and explained: "We merchants mainly rely on MCC to survive - Western Australia, South Australia has so many mining companies, why don't we go directly to the mining area to purchase directly? The main reason is that the transportation problem cannot be solved. The two major miners have extremely strict control over the logistics system. As long as they just meet their transportation needs, they will not expand the railway network or port. The Chana Iron Mine plans to increase production by 7 million tons, and another 10 million tons will exceed the current capacity load.

——The problem is not as simple as you think. We have also heard that Kumho Commercial has a large investment layout in China. Dongshan Iron and Steel Company and Kumho Commercial invested 200 million US dollars... But in Western Australia, 200 million US dollars can only be a big trader... Promise," the middle-aged man pointed to the middle-aged man sitting in a corner of the restaurant. "He is the representative of Chenggang. Chenggang is also very large in domestic private enterprises, and its assets are worth tens of billions. Last year, he sent a representative to Western Australia to build an iron ore supply base..."

Zhang Ke glanced at Ye Jianbin. When they came in, everyone in the restaurant surrounded Jia Zhiyi. At this time, they thought they were just ordinary representatives sent by Jinhu Commercial to Perth.

Of course, these iron ore traders, in addition to the trade representatives of state-owned steel mills, are rich, and there are also many billionaires. They speak casually and will not scare Kumho's name. In fact, Kumho's name is not famous, and in the eyes of some people who know the inside story, there is still a lot of mystery.

Zhang Ke stood up and said to the middle-aged man who helped explain Nei Zhongqu'ao: "We also know that it is very difficult to invest in an iron ore base. The Consulate General is also very enthusiastic about bringing everyone here. We also hope that everyone will help out suggestions and even go further and work together to promote this matter - we plan to spend $100 to 1.5 billion to invest in this ten million tons of iron ore supply base. Of course, it is a bit inaccurate to say that the supply base is supply..."

"Uh..." The middle-aged man was slightly stunned. He had to organize some language to teach the ignorant Jinhu Commercial Representative. He just suspected that Jinhu Commercial did not fully consider the difficulty of investing in iron ore. At this time, he looked at Zhang Ke incorrectly, not knowing how to continue the conversation.

Jia Zhiyi listened from the side and stood up happily and asked, "Kumho is going to invest in building a port and a railway line in Western Australia?"

"To break through Rio Tinto and BHP's blockade, you can only invest in the construction of ports and railway lines by yourself. With an investment of US$10 to 1.5 billion, it is difficult to build a main line. We only invest in the construction of a branch line with a capacity of 10 million tons. The problem is still not big..." Zhang Ke sat down at this time with a calm expression, "Of course, we must first find the mining area to determine the construction location of the port and railway branches. Many things need everyone's help."

There were several people present with a net worth of over 100 million, but even MCC Corporation had never expected it to build a complete supply.

Ten million tons of high-quality iron ore can only supply the raw material consumption of steel mills with a capacity of 6 million tons. Investing in a 6 million tons steel mill will save some funds and can be built in just 2 billion US dollars. But Kumho Commercial is so luxurious that it has to spend $10 to 1.5 billion to build a raw iron ore supply?

The profits of investing in steel mills in China are also extremely high. Getting to Western Australia is not your own territory. Besides, those chaebol giants can easily make people snatch food from crocodiles. According to ordinary people's ideas, if Kumho really has the financial resources, it is better to invest in building steel mills in China.

Zhang Ke's words shocked and confused the people present, but the contempt and suspicion of Jinhu's ignorance of the world were gone.

Zhang Ke is not sure that Rio Tinto is the Pilbara region, the most important iron ore producer in Western Australia. How much fertile land is left after BHP Billiton's division. Public information shows that the two major miners have roughly plowed the land in the region. However, four years later, FMG was established and was able to be in Rio Tinto. Under the eyes of BHP Billiton, the two major miners of Pilbara had initially explored the abandoned area and quickly grew into Australia's third largest iron ore manufacturer, which shows that there is still a large amount of iron ore resources in the Pilbara region for Rio Tinto. BHP Billiton missed it - re-exploration of geological resources in the same region is the norm in the industry.

What Kumho needs to do is to openly acquire Australian iron ore companies and apply for exploration rights in the Pilbara area to the greatest extent.

In Rio Tinto, the areas where BHP Billiton has initially explored and abandoned it will invest funds for exploration, and the resistance encountered will be relatively small. First, Rio Tinto, BHP Billiton will relax its vigilance, and second, local governments will hope that companies can conduct more in-depth exploration of these areas, and the exploration rights of large areas will be easily issued.

Once iron ore resources are explored, huge amounts of funds must be invested quickly to build infrastructure for mines, railways and ports. MCC Australia has invested in the Chana Iron Mine in Western Australia for ten years and has rich experience in mine construction and operation, and will be a good collaborator.

Even if we acquire an Australian iron ore company, in fact, the exploration company in the mining area still needs to cooperate with exploration companies in the metallurgical system, and even dismantle the entire project into multiple parts to cooperate with domestic companies in the form of joint ventures. This will solve the problems in engineering technology and alleviate the financial pressure. After all, the current existing funds of Kumho Shanghu are less than one billion US dollars, and it will cost more than two billion US dollars in the next few years. Although it can further raise funds, the pressure on funds is still extremely great.

Behind the iron ore traders who attended the banquet today were almost all steel mills of different sizes in China. Even if they did not provide much help in infrastructure engineering construction, the capital power behind them was extremely huge.

It is these capital forces that have pushed China's annual steel output from 100 million tons to 200 million tons, 300 million tons, 400 million tons, 500 million tons, and even to 600 million tons, so that China's steel output is more than the total steel output of the countries in the second to eighth place.

A production capacity of 10 million tons represents an investment of 25 billion to 31.5 billion, and a production capacity of 600 million tons means a total amount of capital of more than 150 billion. Even if a small part of these capital is diverted out, it can greatly alleviate the financial pressure in Kumho in the future.

After the luncheon was a friendship event, and Zhang Ke's speech at the dining table really shocked the people present today.

As of 1999, the largest overseas resource investment project in the country was the Chana Iron Mine in Western Australia. The total investment amount was only US$420 million. MCC Corporation assumed 40% of it, which was about US$170 million. Kumho was going to open a $1 billion to US$1.5 billion in Western Australia at once. It is conceivable that its shocking intensity was.

They had just suspected that Kumho did not consider the difficulty of investing in iron ore in Western Australia. After Zhang Ke issued the investment estimate, they no longer doubted it. Jia Zhiyi had also introduced Ye Jianbin's identity, the president of Kumho Commercial and not an ordinary business representative. They were all insiders in the industry and had a little news about Kumho Commercial's participation in the construction of Xinting Dongshan Port. Dongshan Port, as a comprehensive super-large seaport, has more than US$2.5 billion in infrastructure investment, so naturally there is no need to doubt Kumho's ability to organize $10 to US$1.5 billion. Jia Zhiyi also couldn't figure out Zhang Ke's specific identity and introduced the past in ambiguously. Zhang Ke and Ye Jianbin took this opportunity to formally introduce Zhai Danqing to the Chinese businessmen in Perth as the chief representative of Kumho Commercial in Australia.
Chapter completed!