Chapter 309: An Ambitious Young Man Like You
Li Zhaocai still wore his characteristic long hair, styled down to completely cover his earlobes, framing his round face distinctively.
Upon seeing Li Tang, he quickly confirmed that this person standing before him was indeed the same individual he had met previously in Perth, South Australia.
Moreover, the fact that his previous call had connected successfully further validated his impression.
"When we met in Perth, you said you were working there. I assumed you were employed by someone else. I had no idea you were actually dealing in iron ore and had directly acquired a listed company," Li Zhaocai admitted candidly.
Back then, he had failed to recognize Li Tang's wealth and influence. His modest speech, dress, and demeanor had completely fooled him. It was astonishing to discover that this man now wielded substantial influence within the steel industry.
"You truly are a driven and remarkable individual!" Li Zhaocai exclaimed with genuine admiration.
Li Tang remained calm and modest in response, saying lightly, "You're quite impressive yourself—a young entrepreneur, barely in your twenties, already leading a steel enterprise with annual revenues worth billions!"
Li Zhaocai knew perfectly well how he had reached his current position, which was quite painful to recall. The realization brought a tinge of bitterness, so he deftly avoided the topic and instead moved directly to the reason for his visit.
"Your company, Lianying Mining, is extremely valuable now," he stated directly.
"Lianying Mining hasn't achieved profitability yet. We're still operating at a loss, which pales in comparison to Haixin Steel," Li Tang replied modestly, keeping to the facts.
"But the potential for Lianying Mining's future growth is enormous!" Li Zhaocai emphasized sincerely.
"That's indeed true," Li Tang agreed without further flattery. He then straightforwardly asked, "Did you come here today to discuss cooperation with me, Mr. Li?"
"Yes." Li Zhaocai brushed his smooth hair back, explaining clearly, "We urgently need iron ore. I suddenly remembered that you, my old friend, would soon begin mining, so I came to explore whether you can provide us with high-quality iron ore. Our company's annual demand is around five million tons, which is quite significant."
"Currently, Lianying Mining is indeed seeking potential partners," Li Tang admitted. However, his mind couldn't help recalling some of Li Zhaocai's later notorious missteps.
Under Li Zhaocai's leadership, Haixin Steel had enjoyed initial prosperity before gradually declining, ultimately facing bankruptcy. Although Li Tang didn't have a good personal impression of Li Zhaocai, this wouldn't prevent business cooperation between them. If the price was right, iron ore could certainly be sold.
"I heard you already signed a contract with Hualing Steel and could supply iron ore starting next year?" Li Zhaocai got straight to the point.
"The mine will begin operations at the end of next year," Li Tang confirmed.
"What price?" Li Zhaocai asked bluntly.
Li Tang handed over a standard contract template, "Take a look."
Li Zhaocai quickly flipped through the contract before passing it to Yan Hongliang, who was standing nearby.
"What do you think?" He personally had little understanding of iron ore procurement, so he sought Yan Hongliang's advice.
Yan Hongliang carefully reviewed key clauses and data, then whispered to Li Zhaocai, "This futures contract carries significant risks."
Li Zhaocai understood immediately. Raising his head to Li Tang, he smiled and said, "Since we're friends, could you offer us a better price?"
"Actually, the upfront payment isn't really necessary," Yan Hongliang also interjected. "Signing such a contract is okay in principle, but you haven't even secured the financing needed to build the mine. You're publicly claiming it'll be operational by the end of next year, but realistically, with only about a year left, you'll never complete construction in time."
Li Tang understood these negotiating tactics—finding flaws and bargaining for lower prices was standard practice.
He calmly explained, "The terms in this contract are the same as those we've provided to Hualing Steel and other major companies like Haigang Steel. We treat all our partners equally. Of course, you have the option to decline or to take more time to consider—there's no need to make a rushed decision or sign immediately."
"It's not that we're unhappy with the terms," Li Zhaocai hurriedly clarified, unwilling to damage their relationship since he'd already claimed Li Tang as a friend.
"In business, mutual willingness is key. Since you have concerns about our mine's schedule, it might indeed be better not to sign immediately. After the mine begins producing iron ore, you can always approach us again to sign a purchase agreement at that time," Li Tang remained calm and composed.
"That's true," Li Zhaocai said in a mild tone, clearly not wishing to sour their relationship. Nonetheless, regarding business decisions and contracts, he highly respected Yan Hongliang's expertise.
After quietly consulting with each other briefly, it appeared they had reached a preliminary decision.
"We'll carefully consider the viability of this contract and then decide," Li Zhaocai politely indicated.
Clearly, they felt that committing tens of millions of dollars upfront on a risky futures contract without substantial guarantees was too great a risk.
"All right." Li Tang didn't press further.
After seeing Li Zhaocai off, Dai Yingchi quickly entered the room to report, "I just received a call from the Steel Association. They want to meet you urgently."
"The Steel Association? What for?" Li Tang briefly wondered, guessing perhaps his recent frequent contacts with various steel companies had attracted the Association's attention.
"They didn't specify; they just asked that you come as soon as possible."
"Then let's go now." Li Tang wasn't worried about walking into danger or any troublesome situation. It might even prove beneficial.
The meeting place was at the Steel Association's office building, not too far away.
"You must be the legendary figure everyone's talking about," Bao Yanyao observed, scrutinizing Li Tang's appearance curiously.
"I am Li Tang," Li Tang introduced himself politely, equally curious about the chairman of the Steel Association standing before him.
Although only a nonprofit organization, the Steel Association's role had grown increasingly significant due to the steel industry's rising importance in the national economy.
"I've previously heard that you're highly skilled in hydrometallurgical copper extraction technologies. Later, I heard that you repeatedly made breakthroughs in discovering large porphyry copper-gold deposits around the world. Recently, news spread that you also acquired Lianying Mining in Australia, discovering over two billion tons of iron ore!" Bao Yanyao said warmly. He had long wanted to meet this famous individual in the industry, and today's meeting fulfilled that small wish.
"It's not my sole achievement but rather the collective efforts of various technical teams," Li Tang modestly deflected.
After some brief small talk, Bao got straight to business, speaking gravely, "This year's iron ore negotiations settled at sixty dollars per ton for long-term contracts. It's hard to predict next year's spot prices once this contract price becomes effective. Currently, the entire steel industry faces immense pressure with escalating production costs."
"I'm aware," Li Tang calmly replied, having foreseen this outcome.
"Such circumstances significantly hurt steel production," Bao Yanyao sighed. "Our steel industry is heavily reliant on imported iron ore. Many domestic blast furnace technologies were originally adopted from Japanese models, requiring strict quality and impurity specifications. Our domestic iron ore often doesn't even meet these stringent standards. It's difficult to reduce dependence on imported iron ore quickly."
"That's correct," Li Tang acknowledged.
"Our biggest concern is how to push iron ore prices back down, ensuring the sustainable and profitable development of the steel industry!" Bao admitted frankly, expressing great expectations toward Li Tang. "Before meeting you, I believed the only path forward was to substantially increase domestic iron ore exploration and extraction efforts, gradually reducing our dependence. But this approach won't yield quick results."
"Increasing exploration now won't produce immediate results, but in ten or twenty years, today's efforts will benefit future generations. Personally, I strongly support such long-term investments," Li Tang responded thoughtfully.
"Yes, previously, nobody was willing to invest in exploration. Iron ore exploration virtually halted after 1998, and annual reserve estimates kept declining steadily," Bao said, looking earnestly at Li Tang. "But I believe you can truly help our steel industry. Your bold international moves showed tremendous foresight!"
"We've indeed been fortunate," Li Tang smiled lightly.
"I must ask clearly: Are your publicly announced exploration results, particularly the stated 2.3 billion tons of iron ore reserves, reliable and accurate?"
"Absolutely. Our findings are supported by professional exploration reports signed by certified engineers," Li Tang assured earnestly.
"That implies the iron ore deposit you've discovered truly has substantial development potential!" Bao declared excitedly.
Isn't that stating the obvious? Li Tang thought privately but maintained his calm demeanor outwardly, simply replying, "We have already begun developing the mine."
"I heard you've been negotiating contracts with numerous steel companies lately, even signing a ten-year supply deal with Hualing Steel months ago."
"That's correct. Is there any issue?" Li Tang cautiously asked.
"No issues, but your actions have drawn considerable attention."
"We'll be more discreet," Li Tang reassured, thinking it was a subtle warning.
"I'm not criticizing your actions nor trying to hinder your partnerships," Bao quickly clarified upon noticing Li Tang's cautious reaction. "From the perspective of the Steel Association—and personally—I seek the stable and healthy development of the steel industry. I firmly believe you can assist us, and we actually wish to facilitate your mine's smooth development and your cooperation with steel companies."
"Thank you very much for your goodwill, Chairman Bao!"
"Lastly, I want to confirm clearly: Are your stated mining plans genuinely feasible, or merely exaggerated claims to attract investments?" Bao asked firmly, recalling past incidents involving grand yet fraudulent claims.
Many projects are purely fictional—once people arrive on-site, they often find that locals haven't even heard of such ventures.
"We've already invested more than a billion yuan into the design and preliminary preparations of our project. Moreover, the mine's construction plans have been thoroughly outlined, and Phase One of our main site, known as the Rice Field Mine, has already broken ground, with the construction camp currently being established."
Li Tang felt somewhat regretful that he hadn't brought detailed project documents or on-site photos with him. "We have thoroughly completed the preliminary work and now only lack funding. If not for this, large-scale construction teams would already have moved onto the site. If you're interested, Mr. Chairman, I can immediately send you detailed construction plans and even arrange a site inspection for your reassurance."
"Our intention here is also to perform due diligence and better understand your project and future plans," Bao Yanyao explained clearly. He had invited Li Tang today primarily to confirm the authenticity of the project. "If we can verify that your proposals are indeed feasible, our Steel Association will strongly encourage all steel enterprises to confidently cooperate with you. Moreover, we could even negotiate with domestic banks to provide your mine development project with low-interest loans."
Low-interest loans…
Hearing these words, Li Tang nearly started drooling. The thing he needed most desperately was substantial low-interest financing from banks. Unfortunately, previous attempts to secure funding had been futile.
Moreover, securing billions in low-interest loans was by no means an easy task. It required strong advocacy, such as the entire Steel Association, representing all steel enterprises, to urge banks to issue loans and provide guarantees.
"I must express my deepest gratitude to you, Chairman Bao, for your support and assistance!" Li Tang couldn't hide his excitement and quickly grasped Bao Yanyao's hand.
Initially, he had suspected Bao Yanyao summoned him out of doubt, possibly suspecting him of fraudulent activities or to issue warnings. Yet, besides confirming authenticity, Bao had unexpectedly presented him with such significant support!
"But first, we must confirm that the iron ore project in your possession is authentic and worth investing in!" Bao emphasized solemnly.
"We welcome any level of scrutiny!" Li Tang pledged earnestly, raising his hand as if taking an oath. "Our project can withstand any rigorous evaluation."
"Good." Bao nodded in satisfaction.
"By the way, Mr. Chairman, may I ask how much funding we might expect from domestic banks?" Li Tang asked eagerly, smiling broadly.
"This ultimately depends on the bank's approval," Bao glanced at Li Tang with a cryptic smile. After a brief hesitation, he offered a figure. "If the higher authorities recognize the strategic importance of developing this iron ore project, loans ranging from one to two billion USD or even more might be achievable."
"That's fantastic!" Li Tang could barely contain his excitement.
Recently, Alice had frequently mentioned the severe lack of funds causing slow progress in construction. Securing a bank loan of around two billion dollars domestically would completely resolve their financing issues in one swift move.
"Of course, how much financing you eventually obtain will depend on the tangible benefits you can provide back to our steel industry."
Though the Steel Association was a non-profit entity, it was by no means a charity organization. Especially when billions in loans were involved, the stakes became extremely high. Any misallocation or failure to produce returns would have significant political consequences.
"What sort of benefits are you referring to?" Li Tang asked openly.
"Once your iron ore is produced, we expect certain favorable pricing terms," Bao responded bluntly.
"You can ask Haigang Steel or Hualing Steel about the terms I've already promised. Our iron ore prices will consistently be set at 85% of each year's established long-term benchmark price," Li Tang proudly declared. "This isn't selling vegetables—it's selling iron ore in tens of millions of tons! Assuming we sell one hundred million tons annually at 85% of next year's negotiated price, we would essentially offer an annual concession of roughly nine hundred million USD! And if future iron ore prices increase further, our concessions would proportionally grow!"
Calculated in this way, the figures were indeed startling. This substantial potential benefit was precisely why Bao Yanyao was willing to assist Li Tang in securing such significant low-interest financing.
If Lianying Mining succeeded in developing fully, it could supply cheaper iron ore domestically, significantly reducing reliance on foreign imports, thus saving immense foreign currency reserves. Data clearly indicated that domestic demand for iron ore would only continue to rise over the coming years. Supporting other mining enterprises capable of countering the pricing power of the established iron ore giants was a strategic necessity.
Moreover, Li Tang himself was Chinese, sharing common cultural and ideological grounds, making him easier to communicate with and trust.
"But your preferential price is primarily because these are futures contracts," Bao reasoned calmly.
"Why did iron ore prices surge 70% this year?" Li Tang posed rhetorically. "Because there was a significant gap between domestic spot and long-term contract markets. Foreign producers raised prices purely based on soaring spot market values."
"That's precisely the case. But we can't blame domestic steel enterprises for their lack of unity in purchasing iron ore. Every company must maintain production, especially under severe iron ore shortages," Bao sighed helplessly. "We've continuously coordinated enterprises to remain rational and avoid panic buying, but with limited effectiveness. We can't forcefully intervene in the market."
"The fundamental cause is the discrepancy between spot and long-term contract prices," Li Tang insisted, determined to secure the bank loans. "Here, Mr. Chairman, I can promise you and all steel enterprises: Once our iron ore production commences, we'll prioritize supplying the domestic market!"
"Good," Bao nodded approvingly.
"In addition, I promise that our iron ore will always maintain identical spot and long-term contract prices," Li Tang added sincerely.
Such a commitment showed genuine goodwill. Currently, the enormous price discrepancy between spot and long-term contracts partially resulted from panic buying by steel companies, but was also encouraged by the opportunistic actions of the three major global suppliers.
"Spot and contract prices will always be equal?" Bao asked, clearly intrigued.
This measure could fundamentally curb significant future iron ore price increases. If Lianying Mining's production became substantial enough, they might even challenge the market dominance of the major suppliers in China.
"Yes, always!" Li Tang affirmed strongly. "Of course, priority will always be given to those who sign long-term contracts."
"Excellent!" Bao was ecstatic. "If our nation had more ambitious young people like you, there would be no worry about our growth and standing on the world stage!"
After parting ways with Bao, Li Tang returned to Cloud Peak Tower and immediately arranged to send a complete copy of the Lianying Mining development plans to Bao's office. He wasn't certain exactly when Bao's promises about bank loans would materialize, but it was undoubtedly an excellent start.
Coincidentally, Alice and Fred had just arrived in Yanjing from Perth.
"My dear boss!" Fred immediately embraced Li Tang warmly upon meeting.
Li Tang personally picked them up at the airport, joking as they walked to the parking lot, "It's been a long time since we had a good chat. Let's find a restaurant and catch up over dinner."
Seated in a private dining room, dishes soon filled the table. As they began eating, Li Tang asked, "I heard you recently increased the mine's total budget?"
At this, Alice quickly opened her bag to pull out some documents.
"Let's just casually discuss for now. No formal reports are necessary," Li Tang reassured her with a smile.
Alice relaxed and briefly explained, "We increased the budget to three billion AUD, partly due to rising costs but mostly because Fred wasn't satisfied with our initial designs and proposals."
"Oh?" Li Tang glanced curiously at Fred.
"I believe the railway and mine designs you initially planned were outdated," Fred began passionately. "In the future of mining, efficiency will decide success!"
"Efficiency..." Li Tang considered this thoughtfully.
"We plan to build a fully automated, intelligent mining and transportation system—from extraction to shipment, no human intervention required!" Fred gestured enthusiastically. "From our Perth office, we can monitor every detail, every carload. Any safety hazard or malfunction can be detected and addressed immediately, ensuring no downtime!"
"Is that truly achievable?" Li Tang asked cautiously.
"Absolutely!" Fred insisted confidently. "Companies have already developed fully automated mining vehicles that require no manual drivers. These vehicles are operated remotely by computers. If successful, we'll extend this model across all operations, completely eliminating manual labor and associated risks!"
"You have my approval," Li Tang smiled, convinced by Fred's enthusiasm and innovation.
Fred hadn't expected such rapid agreement from Li Tang and felt even more convinced that they shared the same vision.
"Our smart mine operations will exceed global standards in efficiency!" Fred continued excitedly. "With higher efficiency comes significantly lower production costs, which is critical to competing globally."
"I knew you'd revolutionize Lianying Mining!" Li Tang praised warmly.
Alice, however, appeared worried. "The budget has risen drastically. Originally two billion, now it's three billion AUD. We currently lack sufficient funds."
Li Tang waved reassuringly. "Eat first. I have plenty of good news to share later. After resting, I'll explain everything in detail."
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