Chapter 1166: Pie in the Sky?
Fan Wubing suddenly came to West Africa to seek iron ore development, which was really out of place.
Although Fan Investment Group took action in Australia and obtained the iron ore project, occupying the blank area between the two major mining companies, Fan Wubing was not very at ease. He always wanted to develop more mining areas and have some confidence in his hands.
West Africa is a corner that is almost forgotten by the world, but it has quite rich iron ore resources, which attracts Fan Wubing's attention. If the negotiation goes smoothly this time, he plans to invest about 5 billion US dollars here to develop a channel for drinking ore mining and transportation.
West African countries are rich in iron ore resources. Fan Wubing remembers very clearly that Guinea in West Africa has 15 billion tons of iron ore reserves. Although not much has been discovered, it is not a small amount. What is more worth mentioning is that the iron ore here contains 60% to 80% iron, and the ore body is shallowly buried, rich ores are abundant, and the grade is high.
Today's ore exploration technology has made great progress. After the scope of prospecting is expanded, I believe that many new mining areas can be explored. Fan Wubing vaguely remembers it. There is a magnetite deposit with a reserve of tens of billions of tons in northern Sierra Leone. The iron ore reserves in other countries such as Libya, Cameroon, and Côte d'Ivoire are also very considerable, and they are all worthy of attention.
By now, multinational companies in the world have successfully laid out global mineral resources, and the remaining West Africa. This is an uncultivated treasure. More importantly, Fan Wubing rushed here early this time. Before others reacted, he came here first to discuss business in person.
Under the influence of the world's iron ore monopoly group today, the asking price of the three major mines has continued to rise. The price of Australian iron ore, which accounts for more than 40% of China's imports, has risen faster. The price per ton is already five US dollars higher than that of Indian mines, and ten US dollars higher than that of Brazilian mines with a longer transportation distance.
Although Fan Wubing is considered one of the three major iron ore giants in Australia, the iron ore production of Fan Investment Group in Australia has not yet reached expectations. In addition, Fan Wubing is worried that the Australian government will have a certain impact on its iron ore price strategy. Therefore, he feels that he cannot hang himself on a tree and develop minerals in other regions such as West Africa to balance international mines, thereby enhancing the competitiveness and voice of Fan Investment Group in the iron ore industry.
If you want to monopolize the iron ore industry in a region, you must obviously go through fierce competition. This is also common sense. The main reason is that a large mining area cannot be explored overnight. When this is confirmed. Everyone will flock to this ore feast. Who can bite off a piece of meat is a suspense. New companies like Fan Investment Group, which were not originally giants in the iron ore industry, want to participate in local mining development. Obviously, they have to overcome many obstacles.
The reason why the mining areas in West Africa have not been noticed by major ore giants is mainly because the infrastructure here is backward. The poor local infrastructure seriously hinders the development of the mining industry. To enter here to mine ore, it is necessary to build infrastructure such as ports, roads and railways, which is a considerable expense.
Therefore, Fan Wubing did some calculations. It would not cost much to mine properly, but if he wanted to transport the iron ore out, he would have to spend at least 4 to 5 billion US dollars to build mines, ports and railways in Guinea and Liberia.
Fan Wubing's eyes are on the Simandou iron ore in Guinea. He came here at the right time, and the mining development rights here have not been sold yet. If Fan's Investment Group obtains the mining development rights of the Simandou mining area, and then starts drilling and other preliminary operations, and then launches it when the time is right, it will be a very cost-effective thing.
The Simandou mining project is located inland,
900 kilometers away from the coastal area. The construction of railways and ports not only takes up a lot of money, but more importantly, time. Fan Wubing predicts that even if it goes smoothly. It would be good if the Simandou project can be officially put into production in two years.
Of course, there are other problems in the development of West African iron ore, such as political stability, local taxation, and human resources.
However, Chinese enterprises also have certain advantages in developing African mining, which directly comes from the good image of Chinese enterprises in Africa in the past. China and Africa have close economic and trade exchanges and so-called traditional friendship, which Fan Wubing has now deeply realized.
Fan Wubing has also considered that if the mainland government can be persuaded to implement a policy of tariff-free treatment for most products from African countries to China, then the exchanges between China and Africa will be smoother, creating good conditions for Fan Investment Group to develop West African mining.
Admittedly, the Chinese and Danish governments cannot do anything that harms the public and benefits the private sector, and Fan Investment Group must have some returns to facilitate this matter, but Fan Wubing is also very clear that the trade volume between China and Africa is just that, but his importance to the central government is self-evident, and the top leaders will definitely sell this face.
With this idea in mind, Fan Wubing's request to the Fang family group is to try to lower the other party's conditions and provide convenience for himself to buy a mine. In any case, as long as the other party's conditions are not too outrageous, this matter can be negotiated.
In fact, Fan Wubing has great advantages coming here this time. The most important one is that no one is interested in West African ore at present, and they don’t take it seriously. After all, it is too easy to mine and difficult to transport, so they can only sell it at a low price and don’t have too high expectations.
But Fan Wubing didn't just want to buy some ready-made iron ore, his intention was to develop the rights to the entire mining area.
Because of this, although Fan Wubing was watching lions and elephants with Lu Qingtong, he always had many things in his heart.
Although Lu Qingtong was not deeply involved in the world, a girl's natural sensitivity made her feel that Fan Wubing had a lot on his mind.
After shopping outside for a day, the expert team contacted Fan Wubing and said that there were some major differences between the two parties. For example, they were not very concerned about the price. Instead, they hoped that Fan Investment Group could invest in the construction of a processing facility shared by both parties. factory, and they will be responsible for the design, construction and operation. Improve the taste of iron ore from 60% to 70%, but the investment in their processing plant is more than a hundred times that of similar enterprises in China, which makes experts feel very
After Fan Wubing heard the news, he was a little surprised. His intuition was that the other party wanted to gain profits from this processing plant, but when he thought about it carefully, it didn't feel like it, because their mine was too large. It’s so cheap… Sichuan and Pan business owners are not leaders of state-owned enterprises in the Mainland. They can sell Kuangyuan Jiege more expensively. There is no need to go through the trouble of building a high-priced processing plant to achieve it. This is actually a solution that makes everyone uncomfortable.
So Fan Wubing found someone familiar with the local situation to ask what was going on.
It didn't take long for the matter to be found out. It turned out that their iron ore contained a high titanium content, more than 8%. If there was too much titanium, the boiler would explode during steelmaking. They explained, The newly built processing plant can just reduce the titanium content so that the ore reaches a standard that can be safely smelted, and there is another important point. If it is not processed here, it will be difficult to deal with the government, because here, the government restricts the export of primary products, and due to the high freight costs, it is extremely necessary for them to build a processing plant to remove impurities from the ore.
After figuring out this matter, Fan Wubing's experts made careful calculations and found that after the total project price came down, even if the processing plant had a sky-high price, a comprehensive calculation could still make a lot of money, so they decided to There are no complaints about the factory. Jiu Jingfan Wubing knew very well that after he obtained the development rights, the reserves of the mining area obtained were very, very large. Enough to mine for one hundred years.
So everyone reached an agreement, and both parties were happy.
Fan Wubing carefully calculated that even after processing, the iron content of the iron ore here is controlled at about 70%, and the offshore cost is less than 20 US dollars per ton. It should be what he has seen so far. The best iron ore mine I have ever visited. Imported Australian ore and Brazilian ore are not as good as this.
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In fact, Africans have another worry, which is also a problem they encountered when negotiating with Chinese companies in the past. That is, China is a country with foreign exchange controls. It is difficult for domestic enterprises to remit investments abroad. The government requires strict review procedures and is likely to disapprove these overseas investments.
Moreover, buying overseas mines is not a state-supported investment, so investment by mainland companies must be realized in other ways. The main alternative is to replace investment with trade, which is very troublesome.
On the contrary, if they are foreigners, it is very simple. Fan Wubing sometimes thinks about this policy and really feels that the government is forcing everyone to immigrate.
A common way to do this is through trade channels. The final agreement between all parties was to use a revolving long-term letter of credit. Such a letter of credit is issued repeatedly and is not actually executed. The other party uses a mainland joint venture company to borrow overseas to solve the funding problem. The other party does not need to invest, but to provide financial assistance. For loans to mainland enterprises, you can also communicate with local banks.
In this case, since the contract price is extremely low, less than 60% of the domestic iron ore price, and it reaches the shore price, and due to the tight supply of iron ore, banks would dare to issue a certificate, and they would rather you not redeem the order, as long as One day later, the bank can sell your ore at a high price and make a profit, and earn your 2% issuance fee in vain. But if you do this, it means that the investment is the issuance fee and the issuance guarantee, but it is so cheap For iron ore, banks will definitely rush to issue certificates, so the guarantee is very low. This means that something that requires billions of investments can be completed with a very small amount of money, which can amplify the funds ten times. Such funds in China A tense economy and society where money is king. It's extremely tempting.
But Fan Wubing always felt that something was wrong. If this thing were that simple. Africans just get a processing plant. Most of the iron ore was given to them almost for free, which is unreasonable. Africans can't be all fools, right?
Although the other party seemed to show great enthusiasm for the Chinese, Fan Wubing never believed in the friendship generated in battle. Especially for these foreigners, as the so-called non-my race, their minds must be different. I am talking about these black-skinned, white-skinned or red-skinned guys.
I think that whether it was the Big Brother or the comrades and brothers later, they all broke up and fell out in the end. These people are unreliable. Can we still count on these black ghosts who seem to be even more different?
Fan Wubing felt that this matter was unreliable. So he ordered his legal experts and technical experts to study the contract carefully. At the same time, he mobilized his intelligence department to find out the background of these black ghosts through the intelligence channels of Americans and Europeans.
At the same time, Fan Wubing also felt that although the environment of this place was good, there was always an indescribable weirdness, and the impression these black ghosts gave him was also very treacherous.
Sure enough, in the fierce bargaining negotiations that followed, the relationship between the two sides was no longer so friendly. Fan Wubing and his negotiation team members gradually discovered the embarrassment of their situation. The most important thing was that they found that if they did not agree to sign the contract. It was a problem to leave this place. Not to mention the high hotel fees every day, because at the beginning, the other party sent a fleet to pick them up, so they did not drive or fly here. How to leave?
There are man-eating lions outside the hotel! The rich people who come here all bring their own transportation, and they are not pulled here by cars, so their first task now is how to get out of here. Then go to the big city and look back at how to deal with things here.
Originally, the other party asked Fan Wubing and his team to sign the contract immediately, but it happened so quickly, and good things came too easily. It is always a very worrying thing, especially Fan Wubing felt that there were some problems here, and the experts had never encountered such an easy negotiation, and everyone thought that they needed to think carefully again.
But it is not so easy to leave here rashly. Fan Wubing thought about it and found a reasonable reason, saying that they asked to meet with local lawyers before signing the contract and listen to the lawyers' true opinions, so they wanted to go into the city.
This reason is very legitimate, so the other party had no reason to refuse Fan Wubing's request. In this way, the other party arranged a car to take them into the city.
When the car drove out, looking back at these world-class golf hotels at this time, Fan Wubing suddenly felt that he had escaped from the cage, and then looked at the lions and hippos walking around. It felt that this place was no longer a beautiful place.