Wisdom sparkled in the China’s enterprises outbound investment sub-forum
Source: www.mlr.gov.cn Citation: www.agkyb.com Date: October 22, 2015
On the afternoon of Oct. 25, the sub-forum of China’s enterprises outbound investment was successfully held at Tiajin Meijiang Convention & Exhibition Center. The sub-forum was chaired by Mr. Wang Jiahua, executive vice chairman of China Mining Association. Guests invited had wisdom and ideas sparkled and shared their experience on how Chinese companies made successful investment in outbound mining industry at the critical period.
According to Mr.Fang Qixue, executive director of Zijin Mining, China’s mining industry made outbound investment valued at 19.3 billion dollars in 2014, 18.8% that of the total foreign direct investment. Cases that China’s mining companies made outbound investment trials were: China Nonferrous Metal Mining Group Co., Ltd developed Chambishi Copper Mine in Zambia; China Minmetals Corporation purchased the main property of OZ Minerals and established NMC; Zijin Mining acquired Norton Gold Fields Limited. In 2014, Zijin Mining produced gold amounting to 20% of the total with 10% of the total profits coming from its outbound mining projects.
According to The Hon. Ms. Judith Bossé, Assistant Deputy Minister for the Earth Sciences Sector of Natural Resources Canada, investment in Canada should attach great importance to abidance by law and sound interaction between communities. In this regard, Mr. Wang Jiahua advised the Canadian government to improve its work mechanism. Firstly, the government should make clear the strengths and weaknesses of capital attraction projects and disclose information in an open and transparent manner. Secondly, on the basis of upholding the spirit of Canadian laws, the government should tailor flexible mining policies. Thirdly, it should figure out the causes of successes and failures in the past decade so as to forge ahead into a higher and broader level.
As the first stock-holder of the exploration companies, Sinomine Resource Exploration Co., Ltd has strived overseas for 15 years with large profits year by year. Mr. Wang Weiping, CEO of the corporation believed that outbound development should chart the course of development strategy and only by tailoring measures to the needs of the locals could the company hold its foothold overseas. At present, the corporation has established project fund worth billions of dollars.
“No matter the domestic or the outbound projects, their failures are mainly attributed to information asymmetry and low-degree of specialization. It is a winter for mining industry but a golden autumn for M&A. It is a time for overall arrangement. ” Mr. Liu Yuchuan, Chairman of Beijing International Ming City explained the causes of outbound investment failures from a new perspective.
When it came to the equity structure, Mr. Keith Spencei, CEO of Global Mining and chairman of PDAC International said that Chinese companies should not care too much about the 51% controlling interest but make it the long-term strategic investment when making overseas investment. As to the target countries for outbound mining industry, he believed that Chile was not a bad option besides Russia, Canada and Australia and 5 years or 10 years ago, African countries boasted better opportunities for investment. With the same benefits, companies definitely opted for the low-risk countries.
Other guests also had their opinions voiced. Ms. Song Xiaomei, Vice President, Anhui Foreign Economic Construction (Group) Co., Ltd. shared the experience for company development combining the practice. Mr. Wang Side, Vice President of Chinalco Resources Corporation, believed that China would continue to lead the mining industry development. Mr. Wang Jingbin, President of Beijing Institute of Geology for Mineral Resources believed that the price of mining products would continue to fluctuate but increasingly go under control. (Liu Aiying, Yang Qiuling）
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