Chapter 129: All Private Property
"I can't agree with your view. I saw the power plants, railways, water systems, and fairly decent living facilities there. I believe you saw them too."
Guo Fengchun directly contradicted Li Tang's assessment. "I think your perspective is wrong in this regard!"
Li Tang had wanted to elaborate further, but after being so forcefully dismissed, he lost the desire to continue.
The only reason he had shared his honest opinion today was because Guo Fengchun was a fellow alumnus. It was supposed to be an open, candid exchange of views.
But since Guo was so adamant, Li Tang saw no need to push the issue.
"If the leadership asks during the debriefing this afternoon, should I share my viewpoint?" he asked in advance, not wanting to offend anyone unnecessarily. Making enemies without reason was never wise, so he preferred to proceed with caution.
"Of course you should speak freely."
Guo Fengchun was confident in his own views and wasn't worried that Li Tang's dissent would derail anything. "I'll present my conclusion, and you'll present your opinion. I support it, you oppose it—that sets up a contrast. It gives the leadership something to discuss dialectically and helps them make a sound decision."
"Alright." Li Tang didn't say anything more. He stood up and returned to his office downstairs.
Sure enough, before lunch was even over, the notice came: in the afternoon, there would be a debriefing at the International Investment Company to present the findings of the overseas trip.
After lunch, Li Tang made a brief visit to check on the renovation of his apartment. The progress was going well. He returned to the office and called for He Runqi, and together they went upstairs to the International Investment Company.
Those in attendance included the company's senior leadership, a group vice president from Wukuang Group, and personnel from the Investment and Legal Departments.
The most heavyweight presence in the room was undoubtedly Niu Fu.
Although Coastal Resources' stock price had fallen to historic lows, its total market capitalization was still close to 30 million Australian dollars.
To international mining giants with market caps in the tens of billions, this was pocket change.
But for most Chinese mining enterprises, 30 million AUD was still a significant investment.
If Wukuang were to seriously pursue this acquisition, it would certainly be led by Niu Fu and approved via a board motion.
Besides Wukuang personnel, their financial advisors from Gaosheng's M&A division—led by Alice—were also present.
"Now that everyone is here, I want to stress that the group leadership places great importance on this inspection of Coastal Resources in Australia and is closely following its progress," said Hu Zhenchi, the general manager of the International Investment Company, who chaired the meeting. "Guo Fengchun, as head of the delegation, please present your report to the leadership."
Guo greeted each leader politely and then gave a comprehensive walkthrough of their trip, using the prepared report with photos to structure the narrative.
The report was meticulous, capturing every detail of their experiences and observations.
Although long-winded, it gave a thorough overview of Coastal Resources.
The leaders listened attentively, nodding frequently as if they themselves had been on the ground in South Australia.
After more than an hour, Guo's report concluded to enthusiastic applause.
"Now let's invite our guest, Ms. Alice. This acquisition opportunity wouldn't have come about without your team alerting us to developments in the international market."
Hu Zhenchi was very courteous toward Alice and the others. "Please share your financial analysis of Coastal Resources from Gaosheng's investment perspective."
"Thank you, everyone."
Alice held her prepared materials and began in slow, heavily accented Mandarin, speaking with grace and confidence. "I will keep it brief. First, Coastal Resources' highest-ever market cap reached 200 million AUD. Today, it has dropped to an all-time low—just over 26 million AUD. Many mining companies have approached our bank inquiring about the possibility of acquiring it."
"Your Mandarin is very good," Hu complimented her.
"Second, Coastal Resources' financials are relatively straightforward. They have 15 million AUD in debt, with 8 million maturing this year.
Third, there are no significant legal issues. Should you proceed with the acquisition, you don't need to worry about legal obstacles.
And finally, from a regulatory standpoint, a transaction worth 26 million AUD would not face any resistance from the South Australian government.
In summary, we rate Coastal Resources as a high-quality asset with strong investment potential."
Though slow and occasionally unclear, her explanation got the message across.
Her team also distributed financial analysis reports on Coastal Resources to each attendee.
Seeing that everyone had spoken, Hu turned to Niu Fu and smiled. "President Niu, would you like to say a few words?"
Niu Fu had been silent for the whole hour, calm and dignified like a lion at rest. But his presence commanded respect.
Upon hearing Hu's question, he looked up and scanned the room. "I have nothing to add. But—Li Tang, you haven't shared your thoughts yet, have you? Before the trip, I specifically asked Hu to make sure you were included in the delegation. Did you go to South Australia?"
Hu quickly added, "Yes, yes—Li Tang was our technical lead. Why don't you share your opinion on the acquisition from a technical point of view?"
Hu had long heard of Li Tang but hadn't realized just how much Niu valued his opinion.
He had assumed Li Tang's feedback was already incorporated in the report. That's why he hadn't asked him to speak earlier.
He hadn't expected Niu Fu to personally call him out.
Li Tang turned and glanced at Guo Fengchun.
"Your perspective is refreshing. Go ahead and share it with the leadership," Guo said generously.
"I remember you used to have very bold ideas. What's with all the hesitation now?" Niu added, clearly impressed by Li Tang's past.
It wasn't every day someone proposed a 10-million-ton copper exploration target at Qulong.
Li Tang stood up and looked across the room. "Frankly, I don't see much value in acquiring Coastal Resources."
"Oh?"
After hearing countless presentations praising Coastal, a dissenting voice was like a breath of fresh air.
Several leaders exchanged glances, intrigued.
Niu Fu, who had been leaning back, suddenly sat up straighter. A flash of light appeared in his eyes. "I knew your perspective wouldn't be ordinary. Keep going—tell us what you think."
Li Tang didn't bring up the newspaper photo this time. Instead, he chose to say what he hadn't gotten a chance to tell Guo earlier.
He flipped open the report and pointed to photos of railroads, power stations, and other infrastructure, holding the pages up.
"These photos—everyone here has seen them."
"What's the issue with Pilbara's railways and power plants?" Hu asked, flipping through his own report.
"These were all built by Rio Tinto, BHP, Fortescue, and other major companies. They spent billions of AUD to develop this infrastructure, and it's what made Australia the world's leading iron ore exporter."
Li Tang rattled off the names of Australia's top iron ore producers.
The leaders in the room were industry veterans—they didn't need much explanation.
What mattered was what Li Tang would say next.
"But," he paused, then continued, "you all seem to have overlooked one thing. These railways, these power stations, these water systems—they're all private property."
"You're right," Guo admitted. He had learned this too and had noted it in the report.
But to him, it seemed like Li Tang was simply reheating old leftovers.
Li Tang didn't let that interrupt his train of thought.
"Yes, Minister Guo did a thorough job researching South Australia's mining sector. But there's one key piece of data no one seems to have:
those private railways have never been opened to small or mid-sized companies. Never—not even once."
"Why?" Guo blurted out.
"Because they spent billions building them. Why would they let someone else use them? These are private assets. The federal or state government can't force them to open access."
"We can use public railways built by South Australia!" Guo argued.
"The public railways are outdated. At full capacity, they move only a few million tons a year. And there are plenty of small companies vying for access. How do you allocate that?"
Li Tang remained calm and deliberate. "If you want to operate a mine in Pilbara, you'll have to build your own power plant, your own water pipeline, and, if necessary, your own railway.
From Pilbara to the nearest port, Hedland, it's over 200 kilometers. Building a railway costs at least 200 million AUD."
His explanation was clear, well-supported, and struck right at the core of the matter.
Until this point, everyone had viewed the acquisition with optimism—thinking it would open a new iron ore supply chain and offer strategic depth overseas.
But Li Tang's words made everyone fall silent, deep in thought.
"We could negotiate with Rio Tinto and BHP to use their infrastructure!" Alice suggested anxiously.
"Not possible in the short term. These companies would love nothing more than for all nearby competitors to go bankrupt. They won't open their railways. If they let one junior miner use them, others will demand access too—it's a chain reaction."
"You're being too absolute!" Alice protested.
"Then look up the court records in South Australia. You'll find plenty of lawsuits against companies like Rio Tinto for refusing access."
Li Tang had laid out his reasoning clearly.
These weren't theoretical concerns. They were hard lessons learned by Chinese mining firms over the past decade, earned through trial and error.
The worst example was Huaxin Group's acquisition of two massive magnetite deposits in Western Australia. After investing nearly 30 billion yuan, the project failed because they underestimated the cost and difficulty of building infrastructure.
For top producers like Rio Tinto, Fortescue, and BHP, their infrastructure was their trump card—their biggest advantage.
They could keep production costs below 35 AUD per ton because of it.
Their refusal to share infrastructure had crushed countless small and mid-sized companies.
Without that monopoly, the market would have become chaotic, fragmented—and they wouldn't have reigned supreme.
Guo wanted to rebut Li Tang's claims but couldn't come up with anything convincing.
Alice was panicking.
She desperately wanted Wukuang to proceed with the acquisition. Only then would Gaosheng officially become the financial advisor—this was the biggest deal she'd ever led in China.
"Brilliant points!" Niu Fu was the first to clap.
Clap clap clap...
Others, regardless of what they actually thought, followed his lead.
"President Niu, would you like to say a few closing words?" Hu asked.
"No, I've heard enough." Niu waved his hand. "We have a solid understanding of the situation. If necessary, our leadership team can make another trip to Australia for a more targeted investigation."
"Understood."
Hu Zhenchi turned to the others and announced, "That concludes our debrief. Everyone, you're dismissed."
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