Chapter 313: Another Iron Ore Base
Naturally, Li Tang was greatly tempted by the loan offer proactively extended by Hai Gang Steel. After all, despite the fifteen billion Magnesium Dollars secured by Freit, Lianying Mining still had a noticeable funding gap.
They had considered raising funds publicly. Currently, Lianying Mining enjoyed high stock prices, high market valuation, and strong support from capital markets, ensuring a large number of willing investors. However, because Lianying Mining lacked steady revenue and profitability, the approval process at the Australian Securities and Investments Commission would become very stringent, especially for large-scale fundraising involving complex implications.
When Lianying Mining first listed on the stock market, it had profitable iron ore processing operations. Unfortunately, the iron ore industry suffered through over a decade of stagnation, forcing the processing plants to close, leaving only dormant exploration licenses. It wasn't until Li Tang acquired the company that it gradually regained vitality.
Public fundraising proved challenging, but attracting investors like Magnesium's Lucati International Group was much more feasible. Apart from equity investments, both Li Tang and Freit preferred bond issuance or securing loans, as these methods wouldn't dilute their ownership stakes.
However, despite the attraction, Li Tang did not rush to Haigang City immediately.
After returning from Guinea, he had briefly met Li Xinqi but hadn't formally visited her family yet. After all, their relationship had been established for quite some time, and both families had already met. Formal visits were unavoidable.
Taking advantage of finally clearing up some critical matters, Li Tang found some free time. Carrying a bag of local specialties brought back from Guinea, he waited at the entrance of Shenxia Group headquarters after work hours.
Seeing Li Tang standing at the entrance holding a large sack, Li Xinqi maintained her usual cool expression, yet her round eyes sparkled with joy, and her dimples became evident, unable to conceal her happiness.
"What's in your hand?" She still held a slight grudge over Li Tang's recent disappearance-like behavior, glaring at him playfully.
"Avocados," Li Tang lifted the sack.
Though not entirely full, it weighed several dozen pounds.
"Did you buy them?" Li Xinqi curiously opened the sack slightly, and a greasy, peculiar smell wafted out. "So many?"
"I brought them specially from Guinea. The locals grow plenty of these, and I thought you might not have eaten them, so I brought extra for you."
"I've eaten them before," Li Xinqi replied casually. Given her affluent background, exotic foods were easily accessible, even if avocados were less common in markets.
"Then eat more," Li Tang laughed.
Though not particularly fond of avocados, Li Xinqi tried lifting the sack and nearly stumbled from its heavy weight, glaring slightly annoyed. "Why didn't you leave it in the car?"
"To show my sincerity," Li Tang effortlessly picked it up with one hand.
In truth, he hadn't driven himself; his driver had dropped him off. Since he was handling private affairs after work, he didn't want to trouble the driver further, preferring to ride in Li Xinqi's car, giving them more intimate time together.
"Then you carry it yourself," Li Xinqi opened the trunk, letting Li Tang toss the avocados inside.
"I'll drive—you just relax. I can't let my dear Qiqi tire herself!" Li Tang gallantly offered. Recently, he felt somewhat indebted to Li Xinqi.
She playfully rolled her eyes but smiled warmly, settling into the passenger seat comfortably.
The car smoothly pulled up outside Li Xinqi's family home.
Stepping out of the driver's seat, Li Tang noticed another black sedan pulling up alongside them, from which Li Xingchao emerged.
"President Li, you just finished work too?"
"We finish around the same time," Li Xingchao replied. He'd already noticed Li Tang and Li Xinqi's playful interaction earlier but chose not to interrupt.
"You two work at the same place but drive separately? Isn't that wasteful?" Li Tang joked.
"I leave at seven every morning and often work late or attend business dinners. Xinqi works in the finance department and keeps regular hours—our schedules differ," Li Xingchao explained, eyeing the large sack Li Tang pulled from the trunk. "What's that?"
"Avocados," Li Xinqi responded first.
"Are avocados free in Guinea?" Li Xingchao chuckled at the large quantity.
"Actually, yes. They were a gift from locals," Li Tang admitted.
"You certainly know how to save money," Li Xingchao teased, helping carry the sack inside. "Don't go out tonight—eat at home. An old friend gave me a bottle of fine liquor, aged thirty years. Let's open it and have a taste."
The liquor was excellent indeed. Once opened, the aroma filled the room. However, it was strong liquor—fiery and harsh on the throat.
Li Tang never drank alcohol. No matter how fine the liquor was, to him, it was torture. After reluctantly drinking three cups, Li Xinqi felt pity, softly interjecting, "If you can't handle it, don't drink. Just eat more food."
Indeed, the dishes were abundant and delicious, many ordered specially from top-tier restaurants, reputedly cooked by descendants of imperial chefs.
Zhou Muyun also noticed Li Tang's pained expression while drinking and gently advised, "Drink slowly, there's no hurry."
"Given his current status, if he doesn't drink more, it'll be hard for him to negotiate business," Li Xingchao disagreed, raising his glass toward Li Tang once more. "Taste it slowly. Hold it in your mouth first, savor the flavor, then let it slowly trickle down your throat."
Li Tang had no mood for savoring; to him, alcohol felt like poison, causing involuntary shudders. But after a few cups, he felt warm, and a slight dizziness wasn't entirely unpleasant.
Noticing Li Tang's slightly blurry gaze, Li Xingchao casually commented while holding chopsticks, "At the Zhongcheng Mining board meeting, I proposed granting Shenxia Group the operating rights for Talego Coal Mine. This arrangement benefits everyone."
Hearing this, Li Tang immediately sobered up, replying cautiously, "Given current coal prices and strong ongoing demand, the coal mine's value rivals even the copper-gold mine. It wouldn't be appropriate to separate and hand it solely to Shenxia Group."
The specifics had already been extensively debated during the meeting.
"You could've supported me a little," Li Xingchao grumbled, slightly frustrated that Li Tang prioritized fairness over family ties.
"Shenxia Group genuinely doesn't need Talego Coal Mine. Didn't someone mention previously that Shenxia already operates half of the country's top ten coal mines, each with production exceeding tens of millions of tons?"
Li Tang suddenly felt this fine aged liquor resembled a trap, akin to attending a banquet with hidden motives.
"The coal management authorities and the power industry constantly pressure us," Li Xingchao confessed. Being Shenxia Group's general manager was hardly stress-free. He didn't merely occupy the position—he genuinely aimed for tangible achievements. Despite Shenxia Group's impressive profitability, profit wasn't the sole focus for a major state-owned enterprise. Their essential role was supporting broader economic development.
If coal production or electricity supply fell short, it impeded industrial growth. The government continually pressured them to guarantee sufficient and stable coal output. Although Shenxia continually expanded mining capacity, supply still lagged behind demand.
A mine like Talego—with over six billion tons in reserves, including 1.8 billion tons of premium coking coal—represented enormous potential. If fully developed, it would solidify his position at Shenxia and even allow him to aim higher.
Li Tang understood these pressures but knew the Talego project wasn't his personal affair. If Talego had been solely his, handing coal mining rights exclusively to Shenxia and merely collecting royalties would've been ideal. Unfortunately, Zhongcheng Mining involved multiple large state-owned enterprises requiring balanced handling. Favoring one company too heavily would provoke internal conflict, complicating development further.
"You know," Li Xingchao sighed, slightly tipsy, "for a young man, you're too rational, always putting logic above relationships." He didn't genuinely expect Li Tang to promise anything significant, just voicing frustration.
He raised his glass again, dismissing the topic. "Forget it. Let's keep drinking. It's after hours; work talk is boring."
Li Tang drained another glass reluctantly, considering his next words carefully. "Granting Shenxia exclusive rights to Talego Coal Mine isn't feasible, but if you really want to expand in coal mining, I can genuinely help you find another promising coal deposit."
"Really?" Li Xingchao immediately brightened, enthusiastically refilling Li Tang's glass. "I asked you before to assist with coal exploration, and you always claimed to be too busy. Finally, this bottle of fine liquor convinced you! To celebrate this promise, let's have three more drinks!"
Li Tang hurriedly refused, shaking his head, "Forget the drinking, please. Regarding coal exploration, I can assist specifically in exploration. But when you previously asked me to inspect old mining areas for safety hazards or devise improvement plans, those tasks are beyond my expertise."
"Drink first, then we'll talk," Li Xingchao insisted, raising his glass and urging Li Tang to do the same.
"If we keep drinking, we won't be able to continue discussing coal," Li Tang protested.
"Let's finish these three cups, then we'll continue!" Li Xingchao insisted.
"I can't drink anymore!" Li Tang stubbornly refused.
"You really should change that stubborn temper of yours!" Li Xingchao scolded affectionately.
Watching the two men push drinks back and forth, arguing playfully, Zhou Muyun and Li Xinqi observed them with amused disbelief. Sometimes men who drank could be irritating; other times, rather endearing.
"Fine, I'll drink first," Li Xingchao declared, noticing Li Tang's firm refusal. He drained his glass on his own.
Seeing no way out, Li Tang reluctantly lifted his glass. "Just one glass!"
As soon as he put down his cup, noticing Li Xingchao reaching for more alcohol, Li Tang quickly interjected, "Let's talk seriously about coal first. Over the next few years, will Shenxia Group's primary focus be on thermal coal or coking coal?"
Turning to business, Li Xingchao stopped drinking as well. His mind was exceptionally clear; such a small amount of alcohol had little effect on him.
"Certainly, coking coal will be our priority. After all, coking coal reserves are rarer compared to other coal types. With the rapid growth of the metallurgical industry, demand for coking coal is rising sharply. Of course, the demand for thermal coal for power generation remains immense," he clarified.
"In that case," Li Tang said thoughtfully, "we'll need to find coalfields with ample reserves of both coking and thermal coal."
"Talego coal mine has substantial reserves, high-quality coal with excellent calorific value, and a particularly high proportion of coking coal," Li Xingchao sighed softly, lamenting, "It's truly a rare gem. Unfortunately, it doesn't belong solely to Shenxia Group. Of course, given the previous negotiations, the mining rights are now in our nation's hands, which still greatly benefits our overall coal industry."
"That's true," Li Tang nodded in agreement.
"It's fair to say," Li Xingchao continued, "if Talego coal mine achieves the expected production targets, it will essentially fill the domestic gap in coking coal supply."
"Then, do we still need to search for new coalfields?" Li Tang questioned.
"Of course," Li Xingchao responded seriously, "what if coal demand increases further in the future?" Noticing Li Tang deep in thought, he offered a suggestion, "If you're looking for new coalfields, major coal-producing regions like Sanjin Province, Neimeng, and your home region, Qianzhou Province, would be key areas to target."
"Within the country, chances of discovering new large-scale coal deposits are slim," Li Tang acknowledged. The domestic coal geological teams had conducted thorough surveys for years, leaving few opportunities for significant breakthroughs.
"So, you're suggesting coal exploration overseas?" Li Xingchao shook his head skeptically. "Although domestic electricity generation demands are rising, China still exports a substantial volume of coal. Export prices are slightly higher, but it's still manageable domestically. Overseas coal exploration doesn't seem necessary unless it's something huge like the Talego mine, with abundant coking coal. Only then would it be genuinely valuable."
Li Tang knew Li Xingchao's reasoning was sound.
Under current conditions, selling coal mined overseas domestically posed challenges. With abundant local resources and convenient transport, domestic supply sufficed. Only coal from Australia, relatively near and cheaper by sea transport, could compete effectively, especially premium coking coal.
However, Li Tang foresaw policy changes ahead. Once stricter controls on coal mining licenses were enacted, environmental standards heightened, and safety regulations strengthened, China's coal production could drastically drop. In that scenario, China, though rich in coal resources, would inevitably begin importing substantial volumes of coal.
Yet, currently, with rampant domestic coal mining, no one could foresee such changes. Therefore, nobody in China was seriously considering overseas coal investment—except for exceptional cases like large-scale coking coal deposits, which were scarce worldwide.
"Then let's just find another coalfield like Talego," Li Tang remarked casually.
"Where could you possibly find that?" Li Xingchao shook his head, skeptical. "High-quality coal deposits like that are rare treasures."
Suddenly noticing Li Tang's flushed face, he reconsidered. The person sitting across from him wasn't ordinary; he defied conventional logic. "Do you have an idea?" he asked cautiously.
"Well, Australia's Queensland is famously rich in coal deposits," Li Tang suggested, thinking aloud. "There's potential there. Canada also has substantial coal resources. Both Canada and Australia have well-established legal systems and free trade environments, making coal investments there potentially promising."
"Is overseas coal exploration really necessary?" Li Xingchao questioned again, reflecting traditional thinking and the current industry environment. Few domestic enterprises showed interest in overseas coal investments. The domestic market was self-sufficient, and overseas competition, such as Glencore's dominance in Europe's thermal coal market, made international expansion challenging.
"Your own Shenxia Group has stronger domestic exploration teams," Li Tang noted casually, not pressing the matter.
"It's not about our exploration capabilities," Li Xingchao admitted reluctantly, "but applying for funding from the board for overseas coal investments would be difficult. It's tough to justify."
"Then perhaps we should shelve the idea," Li Tang casually remarked, not inclined to push unnecessarily. He had limited resources and multiple projects already underway.
"No, no, no!" Sensing Li Tang's reluctance, Li Xingchao quickly grabbed Li Tang's hand, urging desperately, "You promised me you'd help Shenxia Group find coalfields. You can't back out now!" Turning to Li Xinqi for support, he said, "Qiqi, witness this!"
"You're not interested in overseas coal investments, and domestically you don't need my help," Li Tang shrugged, "It's not me breaking promises."
"Overseas investments are fine too!" Li Xingchao relented, fully aware of Li Tang's capabilities. Despite Li Tang's closeness to Li Xinqi, Shenxia Group had benefited relatively little from his talent, unlike Wukuang Group, which profited greatly.
This time, he resolved firmly, Shenxia would secure a significant project from Li Tang no matter what.
"Overseas exploration, even at preliminary stages, involves high costs," Li Tang warned.
"Tomorrow I'll apply for funding—I'll make a huge scene at the board if necessary!" Li Xingchao declared determinedly.
"Why does discussing cooperation feel like preparing for battle?" Zhou Muyun laughed.
"Li Tang, please help my dad this once," Li Xinqi sweetly intervened, holding his hand gently. "He's turning grey from work stress."
Given Li Xingchao's generally relaxed lifestyle, Li Tang doubted stress was causing any greying hair. Nonetheless, helping him wasn't difficult, and there would surely be benefits involved. Shenxia Group was flush with cash; it was a perfect chance for a win-win arrangement.
"Absolutely," Li Tang smiled and finally promised.
That evening, Li Xingchao ultimately succeeded in getting Li Tang thoroughly drunk. After finishing the first bottle of the thirty-year-old liquor, he mysteriously produced another identical bottle.
When Li Tang awoke the next morning, he found Li Xinqi already fully dressed, preparing to leave.
"You're awake?" she asked softly, peeking into the bedroom.
"Did you bring me home last night?" Li Tang asked groggily, recognizing his familiar room.
"Who else would?" Li Xinqi waved casually. "You drank so much. Just rest today—I'm heading to work."
"Drive safely," Li Tang responded, shirtless and still leaning against the headboard, unable to recall clearly what had transpired the previous night. The messy bedding hinted that something significant might have happened.
Despite his heavy drinking, he suffered minimal hangover effects. After showering, he went straight to the office, grabbing breakfast downstairs before settling into his workspace. Just as he sat down, his office phone rang sharply.
"In a couple of days, there's a mining club conference in Sydney," Freit's voice announced directly. "Do you want to attend?"
Freit rarely called Li Tang directly unless critical decisions were involved. Normally, company updates came through Alice.
"What's this mining club?" Li Tang asked curiously.
"We've been invited to join the Sydney Mining Club," Freit explained enthusiastically. "Major Australian mining companies participate, including CEOs from giants like BHP Billiton and Rio Tinto. Your presence would certainly stir excitement."
"What's the conference about?"
"Analysis of mining markets, cutting-edge exploration techniques, and capital operations—everything related to mining. They also award various recognitions, like Outstanding Entrepreneur. If you appear personally, you might even win."
"You can represent Lianying Mining," Li Tang responded evenly, having already guessed Freit's intentions. He had little interest in attracting unnecessary attention or stirring conflicts with figures like Chris or Alba.
He felt he was not someone who enjoyed competing unnecessarily, nor was he interested in debating at events like this.
"Then I'll attend myself," Freit replied, slightly disappointed that Li Tang wouldn't join him.
Knock, knock!
Just as he put down the phone, there was a knock at the office door.
Several men in suits, some even wearing sunglasses reminiscent of characters from The Matrix, blocked the doorway.
"Are you Freit?" one of the men asked coldly.
Freit was momentarily stunned. "Should I say yes or no?"
"We're from the Securities and Investment Commission's investigative team. Here's our identification and warrant," one man declared, briefly flashing his credentials.
"What's going on?" Freit became even more confused.
"Lianying Mining is under investigation for suspected dissemination of false information to maliciously inflate stock prices. Please cooperate with our investigation."
"Impossible!" Freit vehemently shook his head. "We would never do such a thing—you must be mistaken!"
"You're free to speak, but everything you say may be used as evidence."
"This is ridiculous," Freit protested defiantly. He was not someone who surrendered easily.
The investigation team quickly took control of the finance office and records department, conducting searches of the documents.
The team was legitimate, and their investigation didn't take long.
Soon, the results came out. Financially, Lianying Mining had no problems.
However, Freit was indeed found responsible for making exaggerated claims in front of the media, thus labeled as disseminating false information.
The so-called false information included exaggerating the progress of the mine's construction, exploration results, and especially his explicit public statement claiming the company had secured a low-interest loan exceeding one billion US dollars from China.
To date, this supposed billion-dollar loan had not materialized.
Nevertheless, Freit's remarks undeniably contributed significantly to Lianying Mining's surging stock price.
The penalty was promptly announced: a fine totaling ten million Australian dollars—six million against Lianying Mining and four million personally against Freit.
Once the news broke, Lianying Mining's stock prices declined somewhat.
Worse still, media personalities and mining experts loudly called for Freit's resignation as CEO, citing a lack of professional ethics and asserting he was unfit to lead a company with a market value of seventy billion Australian dollars.
This incident was undoubtedly a bucket of cold water on the previously thriving Lianying Mining.
Freit, however, was neither arrested nor restricted from traveling. He seemed unconcerned about the fine and traveled to Sydney calmly to represent Lianying Mining at the Mining Club Conference.
The event was significant; CEOs from major Australian mining firms and prominent trading companies were present. Leaders of giants like BHP Billiton and Rio Tinto would deliver speeches, often providing valuable market insights beneficial to business strategies.
Apart from the well-known firms, Freit from Lianying Mining drew particular attention this year.
Lianying Mining was new to the spotlight, but Freit himself was a well-known figure in the mining industry.
He delivered a passionate speech titled: "Efficiency—the Determining Factor of Future Success in Mining."
He outlined plans for Lianying Mining's intelligent mining projects. While intelligent mining wasn't entirely new, large-scale implementation was exceptionally rare.
His speech concluded to warm applause.
Everyone present was already familiar with Lianying Mining. Recently, it appeared frequently in media coverage, either about its soaring stock price or corporate developments.
Thus, after briefly discussing intelligent mining concepts, the audience refrained from overly commenting on Lianying Mining itself. After all, these were professionals familiar with iron ore extraction—there was nothing particularly groundbreaking there.
Unexpectedly, someone loudly raised a provocative question:
"Recently, news surfaced, then cooled down after some denials. Someone claimed the story was false. But I'd still like Freit to confirm: the Simandou iron ore project in Guinea—is it true a deposit of 2 billion tonnes was discovered, averaging over 66% iron?"
Freit lifted his head, recognizing immediately who posed this unrelated yet sharp inquiry. It was an old acquaintance, Palmer, known in the Pilbara region for his shrewd and litigious style.
Palmer's reputation in Australia was as notorious as Freit's. Known for dragging business partners into legal battles even after making substantial profits, he was both respected and loathed. Nevertheless, he possessed ample resources and influence, operating entirely within legal boundaries.
"Palmer, what's your intention?" Freit retorted, reluctant to engage.
"I'm merely confirming facts," Palmer replied, smiling harmlessly. "Does the Simandou iron ore deposit belong to Lianying Mining?"
"No," Freit clarified firmly from the podium, originally intending only to answer questions about his earlier presentation.
"I assumed as much," Palmer persisted, smiling calmly. "If such a vital mining asset were under your company, surely you'd have disclosed it publicly. Yet, the Simandou project is reportedly owned by the Chinese individual behind your company. You must know more details. Could you confirm if the reports are accurate?"
The hall fell completely silent as all ears turned attentively.
Iron ore executives present knew exactly what a deposit of two billion tonnes at an average grade of 66% meant—it was significant enough to impact the global iron ore market profoundly!
The Australian economy heavily depended on resource exports, with iron ore being its crown jewel. Naturally, no one could ignore news about a newly discovered super-large, high-quality iron ore deposit.
Particularly, giants like BHP Billiton and Rio Tinto closely monitored any updates since the initial news broke. Rio Tinto especially had insider knowledge; they knew the Simandou project was somewhat exaggerated, yet substantial truth remained—specifically, the high-grade iron ore claim of above 66% was genuine.
In the front row, Alba from Rio Tinto sat expressionlessly, his face turning grim.
Freit himself had verified the story with Alice, gaining even more accurate insights. He knew clearly now about the Simandou iron ore project, including the fact that exploration rights for zones one and two were forcefully seized from Rio Tinto.
When Alice recounted this, Freit silently admired Li Tang's boldness, giving him a thumbs-up in admiration. He was deeply impressed by his boss's immense ambition and daring—boldly challenging Rio Tinto head-on demonstrated exceptional courage.
Looking down at Alba's stony expression, Freit hesitated only briefly. Initially, he hadn't intended to discuss matters outside Lianying Mining. Yet, seeing Alba's discomfort, he inexplicably responded with a hint of delight.
"Yes, Simandou iron ore is real. Its grade is exceptionally high."
"Is the 66% grade real?" the question was pressed again.
"Yes," Freit confirmed clearly.
"And the two billion tonnes reserve?"
"Exploration hasn't concluded. The two billion tonnes currently reported is an inferred resource. But as exploration progresses, the confirmed reserves will likely be no less."
A commotion rippled through the room.
Previously, when reports emerged, everyone doubted their authenticity. Two billion tonnes with a 66% grade—such deposits were exceptionally rare, matched only by a few in the Pilbara and Brazil's Carajás.
If developed, this would form a new global iron ore base, alongside Pilbara and Carajás. Furthermore, Guinea already possessed the renowned Mount Nimba iron ore mine.
If this new mine emerged, global iron ore competition would intensify drastically. The golden era of a seller's market might soon be challenged.
Initially, due to massive global inquiries, the Canadian media outlet that first broke the story—the Canadian Post—issued clarifications, stating the Simandou mine was still under exploration and that exact data awaited official announcements. These clarifications calmed markets temporarily, allowing people to assume earlier reports exaggerated reality.
Yet, despite public reassurance, everyone felt uneasy, suspecting some truth behind the sensational headlines.
Now, Freit publicly provided accurate confirmation:
Simandou was real!
Opportunistic investors instantly perked up. Lianying Mining's soaring stock price meant many missed optimal entry points. However, perhaps the Simandou project offered a fresh chance?
Suddenly, Palmer posed yet another incisive question:
"Some reports indicate Simandou's exploration rights originally belonged to Rio Tinto. So how did this Chinese individual suddenly acquire them?"
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