Chapter 263: Born of the Mine
"I heard from President Hu... Hu, from Wukuang International Investment Company—he said you know the CEO of BHP. I was hoping to explore an alternate path and see if I could arrange a direct meeting with Gareth."
Dai Benyong let out a sigh. It was their first meeting, and he came with a favor to ask, so he didn't dare to ask for too much. "I don't even speak a foreign language. Sometimes I worry the interpreter I hired translates my words wrong."
Seeing how troubled he looked, Li Tang asked, "What do you want from BHP?"
"What else but iron ore?" Dai Benyong raised his champagne glass and took a small sip to moisten his throat, then began to explain his situation. "Our company, Gangyong Steel, isn't large yet, so we've never been able to sign long-term supply contracts with major companies like BHP and Rio Tinto. On the spot market, we always pay much more for iron ore than those with long-term contracts. The inflated cost is hard to swallow."
"That's true," Li Tang nodded in agreement. "Our steel industry rarely engages in serious negotiations with international mining giants, and long-term contracts haven't been given enough importance."
He understood the situation well. Companies like Posco in Korea and Nippon Steel in Japan negotiate iron ore prices annually with the big producers and sign long-term agreements, ensuring a steady supply for steel production throughout the year without worry.
Chinese steel companies, on the other hand, mostly buy spot cargoes as needed at the port. Only a few of the biggest firms sign long-term supply contracts.
The price difference between spot and long-term contracts has been growing, and this gap will only widen in the future.
It's precisely this spot trading practice that gave rise to iron ore speculation, pushing global prices higher and higher.
"Gangyong Steel has already drawn up an expansion plan worth over 10 billion yuan. Within half a year, we plan to increase steel production from 2.5 million tons to 9 million tons!"
When speaking about his grand ambitions, Dai Benyong grew excited. "Our goal is to surpass Haigang Steel in three years and catch up to Posco in five!"
"That's an admirable goal!" Li Tang praised sincerely.
"Our demand for iron ore is growing fast. We can't keep relying on spot transactions forever."
Dai explained his rationale but couldn't help sighing again. "We spoke with BHP's regional office in Haigang. They said long-term contracts are only handled by the group's headquarters, and we're asking at the wrong time of year. We can't possibly wait until next year to sign a long-term deal—that would mean buying expensive spot ore for all of this year. So I came here to talk to BHP's marketing director."
"How did it go?" Li Tang asked.
"They said they only negotiate and sign contracts during specific periods. That window is closed," Dai sighed once more. "These people are so rigid. Even offering more money didn't work."
Li Tang understood his frustration but had to be honest. "To be frank, we're all descendants of Yan and Huang, trying to do business abroad is tough. I really want to help you, but my abilities are limited."
"No worries." Dai patted Li Tang's shoulder and smiled bitterly. "You're a young talent with quite the reputation in Australia."
"It's just the media exaggerating things—I can't control that."
"You're developing iron ore projects here?" Dai seemed to have other plans in mind. "I saw the news—you acquired a listed company involved in iron ore."
"That's right. I do have such plans." Li Tang kept his answer vague.
"I know you're capable. Meeting is fate—if you think Gangyong Steel has potential, take us with you. If you really strike iron here, we could mine it ourselves and produce our own steel. Then we won't have to be at anyone's mercy when it comes to raw materials!"
"Sure," Li Tang agreed with a smile.
His whole purpose in launching iron ore projects here was to eventually supply ore to major Chinese steel plants.
In the coming years, China's economy would soar—especially the booming real estate sector, which would fuel rapid growth in steel demand.
Steel mills of all sizes would pop up like mushrooms after rain.
Fortescue, the world's fourth-largest iron ore producer, rose to power by riding the wave of Chinese steel demand.
Now that Li Tang had taken the Fortescue route, his development strategy naturally centered around Chinese steel enterprises.
He couldn't possibly refuse a partnership.
It would be like a fish trying to live without water.
"Alice, later send President Dai a copy of our project proposal," he instructed.
"Alright," Alice nodded.
The group stood chatting in a corner of the banquet hall when a loud burst of laughter suddenly echoed from the center.
They looked over to see a group of flamboyantly dressed tycoons crowding around someone.
Noticing Li Tang's curious gaze, Dai Benyong explained, "That's Xu Huarong, president of the Chinese Chamber of Commerce. He's the wealthiest Chinese person in Australia, mainly in real estate."
"Is that so?" Li Tang responded with mild interest.
"Actually, inviting you to this event wasn't my idea. I'm not even a member of the Chamber. I just came to reconnect with some old friends who happened to bring me along."
Dai pointed at Xu Huarong and smiled. "The one who sent you the invitation was Boss Xu himself."
"Oh?" Li Tang was surprised.
Before he could even go over and say hello, Xu Huarong, apparently alerted by someone, began walking toward him with a group of wealthy followers in tow.
"You're Li Tang?" Xu extended his hand.
"I am. Nice to meet you, Chairman Xu," Li Tang smiled as he shook his hand.
"In the mining industry here in Australia, you're absolutely a rising star!" Xu joked, easing the tension of a first meeting. "No need to hold back here—relax and enjoy yourself!"
He leaned in close and whispered in Li Tang's ear, "In Australia, with money, you can do whatever you want. With money, you are God."
"Heh." Li Tang could only chuckle along.
"Of course, doing business here is just business. Don't talk politics, and don't try to meddle in the media or shape public opinion in Australia."
Xu Huarong seemed to be offering some seasoned advice. "As long as you play by the rules, you'll rarely face discrimination. This place values law and freedom. If you've got talent and capability, there's huge room for growth here. Just remember: don't cross the line."
"Thank you, Chairman Xu. Your advice is more valuable than ten years of study." Li Tang expressed sincere gratitude.
"When we're abroad, we're all from the same roots—it's only right to support each other."
"Absolutely," Li Tang agreed.
"Recently, the media has been all over your story—buying out a listed iron ore company?"
"Yes. The acquisition just closed. Now comes the integration and all the follow-up work."
"One reason I asked you here tonight is personal curiosity—I really wanted to meet you. As the rumors said, young, confident, with a commanding presence."
Xu Huarong's Mandarin was a bit clumsy, probably from lack of practice, but it didn't hinder communication. "But there's something I must warn you about—iron ore trading is very difficult. Unless you've got tens of billions of AUD to build your own port, railway, and mine, and keep costs low, it's hard to make a profit."
He meant well and added sincerely, "Most people won't touch iron ore. Under the shadow of giants like BHP and Rio Tinto, there's almost no room to breathe."
Li Tang could tell that every word rang true, accurately reflecting the current state of the industry.
"We'll take it one step at a time." He knew this path would be hard.
"You need a bit of a gambler's spirit to run a business," Xu said, then left it at that. "If you run into trouble here, feel free to reach out. Our Chamber is all about helping each other."
After a day of food and fun on the yacht, Li Tang didn't swim with the bikini-clad girls, or go fishing or gambling. He simply sat quietly, enjoying the sea breeze and sampling the cuisine.
When they returned, Alice had already gathered information on Gangyong Steel and Dai Benyong and proactively reported to Li Tang.
"Dai Benyong is actually quite well-known in the steel industry. When I asked around, people shared information very easily."
"Let's hear it."
Since the man wanted to collaborate, Li Tang needed to know who he was dealing with. He didn't want to end up partnering with some loudmouth who was all talk and no substance.
"He only has a primary school education. Entered the steel industry in the 90s. Took over several nearly bankrupt steel mills and gradually grew bigger."
"Primary school education?" Li Tang frowned slightly, thinking deeply.
Achieving so much in steel with such limited education—this sounded familiar.
Where had he heard it before?
Alice continued: "Gangyong Steel has indeed launched a 10-billion-yuan expansion plan. They've secured over 4 billion in credit lines from local banks and already invested over 2 billion in phase one."
"Looks like this steel company really does have some strength!" Li Tang pondered, then suddenly slapped his thigh. "I remember now…"
After thinking it through, it suddenly clicked.
Dai Benyong was a well-known figure!
"What is it?" Alice was startled.
"I know this man," Li Tang muttered. But he quickly realized he didn't actually know him—he had just read about him before. They had only just met on the yacht.
Still, Dai Benyong was indeed a remarkable man.
With just a primary school education, he led a small steel mill to success, aiming to surpass giants like Haigang Steel and Posco.
He was also a man of action. When he said he'd expand, he put up the money and delivered results within six months.
Sadly, for reasons unknown, he later got into legal trouble.
It was eventually discovered that he was genuinely trying to build something—there was no corruption involved. He just started construction without approval.
Fate had not been kind.
"I've already sent him our proposal," Alice said, noticing Li Tang seemed a little down but unsure why. "If we want to cooperate, I think we should arrange another meeting soon to discuss details."
Li Tang, knowing the timeline, realized Dai's downfall was imminent. He shook his head. "No need."
"Why?" Alice asked. "Yesterday you said it was important to build closer ties with steel companies. And that partnering with Gangyong was a good opportunity."
"No time for that now."
Li Tang brushed it off, then motioned to Alice. "Let's go. We've got a general staff meeting at Lianying Mining. There's still a mountain of things to handle."
They arrived at Lianying Mining's modest meeting room.
More than thirty employees had gathered—most were standing, and space was clearly tight.
Li Tang had taken a seat at first, but seeing many had nowhere to sit, and not even room to add chairs, he stood up.
It was a gesture of respect.
"Just as I promised everyone before the acquisition, we didn't acquire Lianying Mining to overhaul the company completely, but to help it grow better and stronger."
Li Tang looked out at the mixed expressions of unease, suspicion, and indifference in the room. "I promised that everyone's salary would be increased by 20% based on your current wages."
"Yes, we've already drafted a new hourly wage table for the employees and handed it to her," Kent said, pointing to Alice. "But the truth is, there's not much money left in the company's account right now."
"You don't need to worry about that," Li Tang took the opportunity to make an important announcement. "We've arranged a loan of five million AUD to inject into Lianying Mining. This money will ensure full and timely salary payments for everyone. In addition, it will serve as the starting capital for our next phase of operations."
"The money is currently in our Nanyang Investment Company account and will soon be transferred into Lianying Mining's account," Alice added.
Hearing this, murmurs filled the room as employees exchanged glances.
Their earlier concerns seemed to ease somewhat.
After all, people work to earn wages. If the company has no money and can't pay them, then all promises are meaningless.
To them, salary was the most important thing.
Don't talk about ideals.
"Boss, I can assure you on behalf of our staff: as long as wages are paid in full and on time, we will give our best in our work!" Kent stood up and declared his support for the new boss. "Our employees are all highly professional."
"I believe you!"
Li Tang clapped his hands and raised his voice with enthusiasm, "Brothers and sisters, let's get to work and build something great together!"
Once the regular employees had left, the room became less cramped.
Kent began introducing the company's key personnel. "These are our core team members: Director of Exploration Tracy, Director of Land Management Sylvester, Director of Finance Emily..."
"What does the Director of Land Management do?" Li Tang suddenly interrupted.
"Our company owns over 3,000 square kilometers of land. I'm responsible for maintaining communication with the Land Information and Property Title Bureau under the Ministry of Mines and Petroleum, and for handling annual land tax assessments," Sylvester answered.
"Alright," Li Tang nodded slightly. "You'll have a very important role going forward."
"I've mostly just made sure no one infringes on our existing land titles. Nothing major has happened in recent years. After all, it's remote and deserted out there," Sylvester admitted, unsure what Li Tang was getting at.
"That's fine. I'll explain my plans to you gradually," Li Tang said, motioning for Kent to continue.
There weren't many people in the room, so the introductions didn't take long.
Kent then asked, "Boss, before the acquisition, you mentioned you were planning a major investment project here in Australia, with a total budget of over 100 million AUD. May I ask what exactly the project entails? Should we start gathering data now?"
He still didn't fully understand the purpose behind these Chinese investors acquiring his company.
And most of the company's staff were engineers or PhD graduates—highly competent professionals.
They were used to working for their pay—plain and simple.
This, to Li Tang's relief, meant no troublesome union disputes had arisen.
Now that the acquisition was complete, there was no need for secrecy.
"Of course, the plan is to launch an iron ore exploration project within our company's mining tenements! We own over 3,000 square kilometers of land. There's great potential there!"
"You mean develop an iron ore project within our own mining licenses?" Kent was surprised.
"Absolutely. It's a highly prospective area!" Li Tang said confidently. "We're in the Pilbara region, home to some of the world's most famous iron ore mines. With the vast land we have, there's a strong chance of finding iron ore and building a mine!"
"Was this your plan from the beginning?" Kent asked.
"It was one of the plans, but not the only one."
Li Tang shrugged. Then, recalling something from a news report, he asked, "Was there land under BHP and Rio Tinto that is now part of our license area?"
"Yes," Sylvester nodded. "Back in the 60s and 70s, BHP and Rio Tinto thought the ore grades were too low in these areas, so they returned the land to the state government."
Li Tang noticed some documents laid out on the table and pointed at them. "Are there maps?"
"Yes."
Sylvester pulled out a land ownership map and pointed at some areas outlined with dashed lines. "These zones are all part of our tenement."
Looking at the map, Li Tang saw that while the company did hold land in the Pilbara region, its area wasn't that large overall.
"Doesn't look very big," was Li Tang's first impression.
"Pilbara covers around 180,000 square kilometers. We only have 3,000, so our land appears to be just a few scattered patches."
"What about the surrounding areas?" Li Tang asked, pointing outside the marked boundaries.
"To the south of our land are BHP and Rio Tinto properties, and tenements held by Hancock Prospecting."
Sylvester pointed to a few small sections to the south. "Their licenses are mainly concentrated around existing iron ore mines."
"What about the vast stretches of unclaimed land?" Li Tang pointed at the unmarked areas. "You mentioned there's 180,000 square kilometers here."
"Those lands belong to the Western Australian state government."
"I mentioned earlier that I had a task for you," Li Tang turned to Sylvester. "Buy those lands from the state government!"
"Why?" Even Kent was baffled.
"I'm a farmer at heart—I love land," Li Tang chuckled. "The more land we own, the happier we'll be."
Kent and Sylvester exchanged incredulous looks.
"That area could be around 50,000 square kilometers," Sylvester said. "Are you sure you want to buy all of it?"
"Is it expensive?" Li Tang asked.
If it cost hundreds of millions, he definitely couldn't afford it.
"It's not. Less than 100 AUD per square kilometer in some cases." Sylvester still couldn't understand Li Tang's fascination, but respected the employer's wishes. "However, I must caution you—land taxes on that scale could be extremely costly. It might become a significant and unnecessary expense. This is a risky move."
"It's alright." Li Tang calculated that even at 50,000 square kilometers, the upfront cost was only around 5 million AUD. "What I want to know is, is it hard to do?"
"Not at all. The WA state government actively encourages land purchases. These lands are sitting idle and generating no value. If we buy them and pay taxes annually, they'll be more than happy."
Sylvester was confident. "If we purchase that much land at once, we might even get a steep discount."
"Get it done!" Li Tang instructed. Then, he asked, "As a foreigner, will I run into any obstacles buying this much land?"
"There'll be more scrutiny, but for foreign investments under 200 million AUD, there usually aren't issues."
"This region encourages foreign investment in land," Kent added.
"Good. Then do it boldly. The funding will be secured soon—don't worry about it."
With that settled, Li Tang turned to Kent. "Regarding the 3,000 square kilometers we currently own, what kind of work have you done previously?"
"You want a technical report on the exploration?" Kent looked surprised.
He assumed Li Tang was a finance guy investing abroad and didn't know much about technical matters.
"I'm a technician myself," Li Tang patted his chest.
"It was actually his proposal that led to the discovery of the Tallego Copper-Gold Mine," Alice said proudly. "He's a true expert."
"I thought you'd bring a technical team."
Kent was surprised. "In that case, I'll walk you through our previous exploration work. I was personally in charge of that."
He coordinated with Exploration Director Tracy to pull out documents and explain, "We did preliminary surveys and outlined several promising exploration targets."
He unfolded a geological map. The mapping method wasn't very different from those used in China.
In fact, geological exploration techniques worldwide are largely standardized.
"Which methods did you use?" Li Tang asked.
"We started with magnetic and gravity surveys," Kent replied.
"I thought Pilbara didn't have magnetite?" Li Tang asked, puzzled.
"It used to, but it's since been altered into goethite-hematite formations. The current ore bodies have weak magnetism. But with high-resolution magnetic surveys, we can still identify low-magnetic anomaly zones."
"Very professional!" Li Tang gave a thumbs-up.
"Gravity surveying is simpler in principle. Iron ore has high density, so it creates local gravity anomalies. It's a very effective method for identifying high-potential iron ore zones."
"Got it." Li Tang looked at the gravity anomaly maps on the table, clearly drawn using advanced software. Their technical capabilities were indeed impressive. "Which zones are your main targets?"
"There are several obvious gravity anomalies in the Chiche Range, as well as in the northwest of the Hamori Range. And this area in the northwest shows a lot of magnetic and gravity anomalies," Kent explained.
"Did you drill any test holes for confirmation?" Li Tang asked.
"We drilled a few shallow holes—about 100 meters each. The results weren't great. Ore grades were around 40%."
Kent said it plainly but knew in his heart the real issue was lack of funds.
"Next step—let's drill in the Chiche Range!" Li Tang slammed his finger down on the target zone. "We've got the funding—let's go!"
Based on what he'd seen in his past life, Fortescue's founder had found over a billion tons of iron ore in this very area in less than a year—even though he wasn't a technical expert.
In Pilbara, iron ore was practically everywhere.
The only question was whether you had the money to dig.
Li Tang knew that within the Chiche Range—the same target area Kent pointed out—there was a mine producing over 90 million tons of iron ore annually.
The ore was there, and it wasn't buried deep.
Lianying Mining simply lacked the funds to drill and develop the resource.
Construction costs in Australia are notoriously high.
Li Tang was a man of action.
Every day after that, he went to Lianying Mining, working alongside Kent, Tracy, and others to discuss project implementation strategies.
In Australia, there aren't rigid execution standards for exploration.
Each company can design its own program within its mining tenements.
This was in sharp contrast to China, where everything is tightly regulated.
Here, whether you find ore or not—it's your business. Do it however you like.
After the first five million AUD arrived, Li Tang, Kent, Tracy, and the team flew to Newman.
A town born of the mine.
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