Energy Minerals Become Private Investment Hot Spots for Overseas Investment

International Energy Network News: As the acquisition of mineral resources in the country is constrained by many restrictions on the policy, more and more private companies are looking to invest in a broader international market. Qianlong Holdings Limited is currently seeking overseas rare earth mineral resources investment opportunities. Ganzhou Ganzhou Jidong Rare Earth Group Co., Ltd. also plans to invest overseas. The company plans to invest 30 million U.S. dollars in the Saldanha Port of Western Cape Province in South Africa and build a project to produce 3,000 tons of rare earth oxides extraction lines annually.

2011 was a lucky year for private mining companies. The company’s chief executive officer, David, said proudly that “2011 will be the most successful year in my career.” This former five-year experience in the mining industry in the United States, and later became the managing director of Deutsche Bank Asia. American metal mining executives have more than 17 years of experience in mergers and acquisitions, investments, debt, and equity. In April 2010, they were appointed as the chief executive of China National Mining Corporation.

The company is so optimistic about this company, in his own words, "China Science and Mining and its overseas mergers and acquisitions business is very strategic vision, the prospects are too broad!" Dai Mo revealed that the company holds 70% The equity of the Mina Justa copper mine in Peru will begin at the end of this year and is expected to start production in 2013. In addition, China National Mining also invested 135 million Australian dollars in a copper mine named LadyAnnie in Australia. According to Lady Annie’s proven reserves, the mine can produce 25,000 tons of copper annually. According to the contract, Zhongke Mining has around 3,000 square kilometers of exploration rights around Lady Annie. According to Australian laws, companies with exploration rights within the scope of the examination and exploration of new mines, only need to apply to the local authorities, through the approval of environmental protection and other departments can exercise the mining rights.

As early as two years ago, Shanshan Group had reached a framework agreement with Heron Resources Limited of Australia. The two parties will cooperate on a nickel-cobalt project in Australia; a group of private enterprises such as Yinyi Group and Chunhe Group have listed the resource business as a group. The new pillar industries and enterprises are developing in the mineral development business in Canada, Brazil, and the Philippines...

Industry insiders believe that the acquisition of overseas energy minerals has become a new trend of investment by our private enterprises. The “Report on the Analysis of the Development Situation of China’s Private Economy” published by the All-China Federation of Industry and Commerce from 2010 to 2011 shows that in the face of increasingly fierce market competition and the unprecedented impact of the international financial crisis, private enterprises in China have made full use of a series of countries to encourage enterprises to “go out”. "Preferential policies, actively enter the international market, through the acquisition of overseas energy mineral resources to meet the domestic demand for sustained growth of energy resources.

According to Sun Xiaohua, former Vice President of the All-China Federation of Industry and Commerce, compared with multinational corporations in developed countries and state-owned enterprises in China, private enterprises have unique advantages in investing in overseas energy mineral resources.

First, private enterprises have a comparative cost advantage. Private enterprises have a simple structure, flexible operation, and rapid adaptability, and they have lower management costs. Second, private enterprises have the advantage of operating mechanisms. Private enterprises have gathered a large number of entrepreneurs who dare to challenge, are bold in innovation, and are pioneering. They have independent decision-making power in corporate strategy, investment decision-making, operation and employment systems, and can quickly transmit and process market information. Third, private enterprises have the advantage of folk colors. Although its overall size is not large enough and its strength is not strong enough, its folk colors have made these enterprises more likely to be accepted by the host country in the process of “going out”. In the process of implementing overseas energy and mineral resources acquisitions, private enterprises are more likely to obtain the trust of the sellers of the companies and the approval authorities of the host governments, and overseas investment projects are less subject to political barriers. As a result, Sun Xiaohua suggested that the government support the overseas mergers and acquisitions of private enterprises more powerfully, and use the unique advantages of private enterprises in overseas mergers and acquisitions to serve the national strategy.

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