Chapter 178: A Mining Empire
After leaving Wukuang Group, Li Tang went alone to the China office of Gaosheng Investment Bank.
When Alice saw Li Tang again, there was a noticeable difference in her gaze.
"You seem like a different person," she said with a touch of admiration.
Li Tang turned to face the glass behind him. His reflection was vague, his features not entirely clear. He joked, "I've tanned. I've been in the sun every day—it's normal."
"That's not what I mean."
Alice handed him a cup of tea and looked at him seriously. "Your aura has changed."
"Has it?" Li Tang sniffed at his clothes. "I'm wearing a fresh outfit today. Doesn't smell like anything."
Alice laid two newspapers on the table. "Garan's Financial Post and China's Nonferrous Metals News both reported on your project. I've read them. I didn't expect you to succeed so quickly."
"Oh—" Li Tang said as it dawned on him, "You mean that."
"One hundred tons of gold— even internationally, that's a remarkable achievement." Alice was clearly reevaluating the man in front of her. "If you were the CEO of a listed foreign company and made a discovery like that, your stock would've soared. You'd already be a millionaire."
"Well, I'm not," Li Tang replied flatly, showing no pride.
"You really are something," Alice said, visibly intrigued.
"You're not wrong," Li Tang grinned. "Do you remember our bet?"
"Of course," Alice said boldly. "But I haven't lost."
"Really?"
Li Tang couldn't even recall the details of the bet clearly—it was a vague memory, but he remembered it happening.
"You said you'd acquire a foreign company. But you haven't," Alice laughed. "I admit you've been successful, but you haven't won our bet."
"Well, today I came to beat you," Li Tang said, smiling.
Alice burst into unrestrained laughter, even revealing her uvula. "And how do you plan to do that?"
"I'm planning to acquire a foreign company," Li Tang said, now completely serious.
"You're here today to ask for my help?"
"Yes. For cross-border transactions and coordinating parties, I need a reliable intermediary. Your firm, Gaosheng, is obviously experienced in this field."
"Which company do you want to acquire?" Alice's tone shifted, now fully professional.
"I'm planning to acquire an exploration license. It's registered to a company in Mongolia called Nanhuang Resources. It's a subsidiary of BHP-Billiton."
"BHP-Billiton is still in the middle of a major merger. Internally, they're undergoing restructuring." Alice began analyzing immediately. "And companies like BHP-Billiton are extremely protective of their exploration assets. Their exploration division reports directly to top executives. I don't think they'll easily let go of their licenses."
"They will," Li Tang said with confidence. "They're strategically refocusing and will abandon their Mongolian licenses."
"How do you know about BHP-Billiton's internal restructuring policy?" Alice stared at him, unable to detect any sign of deception.
This Chinese man had either razor-sharp intuition or an excellent information network.
He had somehow predicted BHP-Billiton's internal strategy.
Li Tang simply smiled. "They'll do it. That's certain."
"If your information is accurate, the deal should be easy to complete," Alice said, forming an opposite view to what Guo Fengchun had told Li Tang previously.
She believed the real challenge lay in persuading BHP-Billiton to give up the license for cash.
Guo had thought BHP-Billiton would be easy to deal with, but Mongolia's government might be the obstacle.
"Mongolia is a mysterious country," Li Tang agreed. He wasn't very confident either.
"As long as we have BHP-Billiton's consent, getting Mongolian government approval won't be a problem."
Alice spoke confidently. "I've worked on a mining deal in Mongolia before. It was a small one, but I'm familiar with their legal system."
"Can you tell me more?" Li Tang was once again impressed by Alice.
She was the real deal.
She had already demonstrated keen insight into the mining industry—and while some of her predictions might have been guesses, they had all turned out to be right.
She had left the glitz and comfort of America to come to China, which already spoke volumes about her courage.
And now her understanding of Mongolia's mining laws revealed her knowledge and perspective.
"Mongolia revised its Mining Law in 1997 to encourage foreign investment. I'll give you some simple examples: they reduced royalty rates from 12.5% to 2.5%, foreign investors can hold 100% ownership, and profits from mining projects can be freely repatriated without any restrictions."
Alice listed Mongolian mining laws like she was reading from a textbook.
"To attract foreign capital, Mongolia even changed to a parliamentary system and has worked to create a transparent and open mining environment. Foreign companies just need to follow the Mining Law, and approvals are usually very quick."
She paused, then added, "In fact, Mongolia is so open that even small firms and individuals can easily apply for exploration licenses."
"Sounds like nothing but advantages," Li Tang mused.
"I believe your application to transfer the license will be approved within a week," Alice said confidently.
"Alright then."
Li Tang made a decision on the spot. "I'd like to hire you as our financial advisor for this project. Are you willing?"
"Of course. I'd be honored to serve you."
Alice tried to hide her excitement and took the opportunity to pitch her firm's services. "Do you need us to assist with financing as well?"
For investment banks, the real profit didn't come from advisory fees but from arranging financing.
Li Tang shook his head and smiled. "No need."
He then called Guo Fengchun to let him know they didn't need to find a Mongolian law expert anymore.
At the same time, he spoke with Zhao Hepu to finalize the agreement to bring Gaosheng Investment on as the financial advisor.
They quickly settled the service fee and signed the contract.
The project wasn't huge, and the paperwork was relatively straightforward.
With everything in order, Zhao Hepu, Hu Zhenchi, Alice, and others boarded a plane for Victoria, Australia's state capital, Melbourne.
They were welcomed by BHP-Billiton CEO Goris and Senior Exploration Director Miles—a clear indication of how seriously they took the meeting.
It was also a sign of their high regard for the Chinese market, especially their trade relations with Wukuang Group.
Each year, Wukuang Group purchased several million tons of iron ore from them.
Goris was in high spirits and full of energy. And why not?
After the merger, BHP-Billiton's market capitalization exceeded 130 billion U.S. dollars, making it the second-largest mining company in the world.
As its inaugural CEO, he wasn't just leading a company—he was commanding a mining empire.
"Hu!" he greeted Hu Zhenchi enthusiastically.
Wukuang Group had placed great importance on this exploration license acquisition.
The general managers of both the Metallurgy Company and the International Investment Company had personally come to ensure success.
Both sides had coordinated beforehand, clarifying the meeting's objective and preparing their respective materials.
After a few pleasantries, Hu—being the familiar face—led the negotiation.
"Mongolia borders China. Wukuang Group has long wanted to explore resources there. You're aware Mongolia is still underdeveloped in mining. But it has vast land and untapped resources."
"We do have a large exploration license there, and we've found mineralization."
Goris took a file from Miles and skimmed it. "Our exploration division is undergoing strategic realignment. We're concentrating efforts elsewhere. After discussing it with Miles, I believe your proposal to acquire Nanhuang Resources is acceptable."
"That's great to hear," Hu Zhenchi replied, pleasantly surprised by how smoothly things were going. "What are your expectations for the price?"
"Ten million U.S. dollars," Goris replied matter-of-factly. "After all, we've invested significantly in this license over the past four years."
He turned to his deputy. "Miles, don't you agree?"
"We've drilled 23 holes totaling over 3,000 meters. The mineralization results have been excellent," Miles said, puffing up with pride. "Two holes were especially promising—one had a 26-meter-thick ore body at 0.8% copper; the other was 38 meters thick at 1.6%. It's a highly promising license."
"Ten million?"
Hu Zhenchi's face darkened slightly.
That figure was well beyond their initial expectation.
Of course, business is business—there's always room for negotiation.
But Goris wasn't finished.
"The ten million is just to cover our exploration expenses. In addition, we want a clause in the contract:
a 5% royalty on future production from the license."
"Five percent royalty?" Hu Zhenchi wasn't familiar with the term.
They hadn't prepared for this.
Goris explained patiently.
"A 5% royalty means once the mine goes into production, BHP-Billiton receives 5% of all gross sales revenue, regardless of profit."
Hu didn't know what to say.
That clause meant BHP-Billiton wanted to keep earning from the project forever.
It was like a government collecting taxes—whether you make money or not, they get their cut.
Before coming here, they had planned on negotiating a low price.
They hadn't expected a perpetual royalty clause on top of the high asking price.
Everyone was caught off guard.
Friends, if you enjoyed the novel, you can subscribe to my Patreon channel.
Until November 30th, get 40% off your subscription and the purchase of the novel.
Read 40 Chapters In Advance: patreon.com/Johanssen