Chapter 295: Guinea
When Li Tang departed for Perth, Li Xinqi still came to see him off at the airport. While she admired his ambitious spirit, she often felt lonely, given how frequently he traveled away from home.
Upon arriving in Perth, Alice picked him up alone, driving herself.
"Take me straight to the Lianying Mining headquarters," Li Tang said, showing no interest in resting.
"How about we grab something to eat first?" Alice suggested thoughtfully, knowing the long flight must have tired him out.
After brief consideration, Li Tang nodded. "Alright. You can update me about the current situation at Lianying Mining."
They sat down at a nearby restaurant. Li Tang seldom ate Western cuisine, but he found the meal decent enough. As he ate, he asked Alice, "How has Fred performed since joining the company?"
He remained somewhat concerned—not doubting Fred's capabilities but worried whether Fred, holding just 10% stock options, would truly give his best efforts in managing Lianying Mining. Technically, this wasn't entirely his own business.
"Fred is exceptionally capable!" Alice put down her knife and fork as she spoke, her bright, clear blue eyes animated and expressive. She wore an elegant, high-end business suit and exuded an authoritative presence reminiscent of royalty. She typically maintained a cold, dignified demeanor in front of outsiders but relaxed into a more approachable stance around Li Tang. Leading Lianying Mining—a listed company neither too big nor small—with numerous employees, required her to maintain an imposing presence.
"I know he's competent," Li Tang said calmly, unsurprised.
"He has excellent relations with many officials in the South Australian government. Thanks to him, many approvals related to our mining construction project have been expedited. Additionally, he has extensive connections in the investment community. Since he joined, numerous investors have visited our company at his invitation," Alice explained.
She appreciated Fred's abilities but admired Li Tang's insight even more. "Previously, Fred had a questionable reputation, often referred to as a 'big talker.' But you trusted him from the start, convinced that he would successfully manage our company and develop our iron mines."
"He has extensive investment experience and a strong background in resource development. That's exactly why I valued him," Li Tang explained, chewing thoughtfully on a piece of beef.
"Yet the nickel mining company he previously founded was considered unsuccessful by most observers," Alice noted.
"But he gained significant experience from that venture, undoubtedly," Li Tang smiled confidently.
"Either way," Alice concluded, "based on his recent performance, he's done a satisfactory job."
Alice paused, looking slightly troubled. "He can be stubborn, though, relying only on his own people. He assigned Kent, Tracy, and others to the exploration project at the Hamori Range, while the Qiqie Iron Mine construction is entirely managed by the team he brought with him."
"What worries you?" Li Tang asked directly.
"The mine's construction involves around two billion Australian dollars. If Fred has any hidden agendas, it could lead to significant financial losses," Alice confessed.
Li Tang stopped eating briefly to consider her concern. "Your worries are reasonable. We must closely monitor how the funds are used."
"I feel you've granted Fred excessive authority," Alice voiced her deepest concern.
At present, Fred practically ran Lianying Mining independently. Transactions involving millions of Australian dollars didn't even require signatures from Li Tang or Alice—Fred's signature alone sufficed. Alice, despite being the chairwoman, served merely as a supervisor. Only major decisions involving hundreds of millions required Li Tang's or Alice's approval. For regular decisions, Fred had complete autonomy.
"I won't always be here. Decisions must be flexible and responsive to local circumstances. There's an old saying in China: 'A general on a distant battlefield isn't bound by orders from afar.' That's the logic here," Li Tang justified.
Giving Fred complete operational autonomy had been Li Tang's condition for bringing him aboard. It was also precisely why Fred agreed to work under someone else—unusual, given his typically rebellious personality and aversion to authority.
"I'm concerned that we might lose control of the company completely," Alice warned, worried Fred might eventually seize control through manipulative tactics. Such hostile takeovers were common in business history, especially when someone with Fred's dubious reputation was involved.
"We still hold the upper hand. You possess full authority," Li Tang reassured her. "Fred has only 10% stock options—he can't make significant waves. If you discover he's harming the company's interests, document it clearly. According to his employment contract, we can dismiss him immediately."
"Alright," Alice conceded reluctantly, realizing Li Tang wouldn't budge. She quickly changed the subject, her tone softening. "Actually, my reason for asking you to visit wasn't purely personal... though, I admit, I've missed seeing you."
"Fred wanted to speak with me?" Li Tang ignored Alice's subtle emotional hint, guessing her meaning immediately.
"Yes, he wants to discuss something with you." Alice appeared somewhat disappointed at Li Tang's unresponsive demeanor.
"Is the company short on money?" Li Tang guessed Fred had eyes on the $200 million still in their accounts.
"Indeed. But Fred has already resolved it," Alice revealed unexpectedly.
"Really?" Li Tang had anticipated Fred asking directly for additional funding, not hearing that funds had been secured elsewhere.
"Fred met with investors in Australia, Singapore, and the US, flying constantly to raise funds—but from what I know, all these attempts failed," Alice explained.
"So where did he get the money?" Li Tang asked, puzzled.
"He convinced a local bank manager—a friend of his—to grant our company a loan of two hundred million Australian dollars," Alice revealed.
"Two hundred million Australian dollars?" Li Tang immediately gained new respect for Fred's resourcefulness. "That's no small amount."
"Lianying Mining has never turned a profit. Most banks are very cautious when approached for loans, especially given the high risk in iron ore development, as failures could lead to total losses," Alice elaborated. "This is precisely why I admire Fred's capability—he truly has remarkable influence within financial circles."
"It seems I chose the right man!" Li Tang laughed heartily.
"But we're still short another 1.8 billion Australian dollars for mine construction," Alice reminded him soberly.
At the mention of such figures, Li Tang lost interest in his meal, setting down his knife and fork with a heavy sigh. Realistically, he had no immediate solutions, merely patience. They would wait until iron ore prices rebounded, attracting more eager investors. Only then could such massive funding gaps possibly be bridged. Fortunately, that moment was rapidly approaching.
"What's Fred's next plan for mine construction?" Li Tang asked.
"Due to our contract with Lituo to transport 60 million tons of iron ore, Fred plans first to build a mining camp, purchase equipment, and start extracting ore. The desalination plant and thermal power plant will also be prioritized. However, building the railway and port—the two costliest sub-projects—must wait for now," Alice detailed, approving of Fred's phased approach. "We should first produce and sell iron ore to generate revenue and strengthen investor confidence."
Li Tang nodded thoughtfully.
"Many outsiders doubt our intentions, suspecting we're inflating stock prices artificially before exiting the market," Alice said clearly. "Given our entry into iron ore at such an unfavorable time—when only major companies like Lituo and BHP profit due to their cost advantages—skepticism is natural."
"You're right," Li Tang acknowledged. Determination alone wouldn't convince investors. Once their mines produced ore shipments, visibly operating and exporting iron ore, investor skepticism would vanish naturally. Only then would Lianying Mining truly represent not just dreams but actual profits.
After resting overnight at a hotel, Li Tang arrived at Lianying Mining headquarters the following day to meet Fred.
"My friend, it's been a long time!" Fred stood warmly, giving Li Tang an enthusiastic hug. Despite his modest office size, Fred was brimming with enthusiasm.
"I heard you had an urgent matter to discuss?" Li Tang skipped pleasantries, getting straight to business.
Fred nodded towards Alice, knowing well her position as Li Tang's trusted associate. He saw her frequently and understood her importance.
"I assume Alice briefed you on our operational plans," Fred handed Li Tang a document. "This is the two hundred million Australian dollar loan agreement. According to company policies, large transactions require your signature."
Li Tang took the document, carefully reviewing it at length. The text, drafted by professional lawyers, was filled with technical jargon. Although Li Tang struggled with some details, he clearly understood crucial financial figures. "The interest rate is quite high," he noted critically.
"Without a high interest rate, no bank would have lent us the money," Fred admitted openly. "Next year, iron ore prices will rise significantly—I assume you've heard that next year's long-term contract price is set at forty US dollars per ton. That's very good news for us."
"Yes, I'm aware," Li Tang confirmed, recalling his earlier conversations.
"Rising iron ore prices make our mining project more promising. This loan's slightly high interest rate is a necessary risk. If iron ore prices continue rising next year, our project might become profitable," Fred reasoned confidently.
Fred clearly had done his calculations. At current iron ore prices, investing two billion Australian dollars in mine development was guaranteed to lose money.
Based on a fifteen-year mining lifespan, the projected cost allocation pushed their iron ore extraction price up to seventy or eighty U.S. dollars per ton.
This calculation only accounted for their current Rice Mine project. If they could also begin development at the nearby Corn Mine, or initiate extraction following the successful exploration at the Hamori Mountains, the resulting scale economies would significantly reduce overall costs. Only by achieving a production cost of under thirty dollars per ton, similar to giants like BHP and Rio Tinto, could they truly achieve sustained profitability. This represented their long-term goal.
Li Tang had previously set clear incremental production targets for them—55 million tons, 100 million tons, and finally 150 million tons. Fred viewed these targets as three steep mountains lying before them, awaiting conquest. Within these ambitious goals, Fred felt Li Tang's profound expectation and determination regarding the iron ore project.
"I think you're right," Li Tang said, decisively picking up a pen and signing his name without hesitation. Amid the dense array of foreign text, he distinctly inscribed his Chinese characters.
"The funds will be available very soon. However, our planned railway and port projects are unlikely to be completed in the short term," Fred remarked calmly as he put away the signed documents. "I've met many investors and explained our vision thoroughly. Unfortunately, their enthusiasm remains quite limited for now."
"No rush," Li Tang reassured him, knowing he couldn't entirely leave Lianying Mining to fend for itself. Infrastructure projects inevitably required enormous funds, and he'd have to help secure them.
"Often, steel manufacturers sign early supply agreements with iron ore producers, even paying partial advance deposits," Fred continued thoughtfully. "I've had some initial meetings with Japan's Shin Nippon Steel. Their iron ore demand has always been considerable, dating back to the 1960s and 70s. It's no exaggeration to say that BHP and Rio Tinto's growth was significantly boosted by Shin Nippon Steel. Japan's economic boom greatly accelerated South Australia's iron ore exports."
"Indeed," Li Tang nodded knowingly. "And now, China's robust economic growth will have a similar, perhaps even greater, effect."
"I haven't yet contacted Chinese steel companies, but I've had two formal meetings with the chairman of Shin Nippon Steel. Initially, they showed interest in investing, as they already hold stakes in several mines in South Australia. Their involvement would greatly assist in production, marketing, and transportation."
"They undoubtedly have significant influence," Li Tang acknowledged.
"However, they've recently cooled toward us," Fred said, observing Li Tang closely. "They mentioned you're not a suitable partner."
"Me?" Li Tang was genuinely surprised.
Fred nodded, puzzled. "They suggested that if we wished to continue our cooperation, you'd have to personally clarify some matters with them."
Li Tang smiled wryly, recognizing the likely cause—the coal mining project in Mongolia. It seemed Shin Nippon Steel held grudges deeply.
"Shall I arrange a meeting?" Fred asked.
"No need," Li Tang shook his head firmly. "When you have time, visit China. We'll meet Chinese steel manufacturers together. China's steel industry is increasingly influential in global iron ore trade. Our target market isn't Japan—it's China."
"I fully agree," Fred concurred easily.
After their discussion, Fred accompanied Li Tang as he toured various departments, reviewing project progress. Subsequently, Li Tang took a flight to the Pilbara region to meet He Runqi and inspect ongoing exploration activities. After confirming that company operations ran smoothly, he felt reassured and instructed Alice to arrange his return flight to Yanjing.
"The Pebble Project is sold, and our domestic projects are mostly wrapped up for now," Alice mentioned, somewhat reluctantly handing Li Tang his suitcase as he prepared to leave. "If you value this iron ore project so much, why not stay directly involved?"
"We're essentially an exploration company—that's my genuine positioning," Li Tang replied warmly.
"But Lianying Mining is at a crucial stage—not merely exploration anymore," Alice persisted.
"We're headed to Africa next, to see if we can secure an exploration permit," Li Tang clarified directly.
"Africa?" Alice was visibly surprised. While it wasn't unusual for major international mining corporations to pursue projects worldwide, she questioned whether Li Tang's Shengshi Holdings had sufficient resources to expand so far. They had little room for trial and error. A failed project would incur unsustainable losses.
"Guinea, specifically. We're exploring possibilities—it's far from certain," Li Tang laughed lightly, waving goodbye. "Keep an eye on things here and contact me immediately if necessary."
Back in Yanjing, Lei Pingjin and his team had already arranged their international travel documents. After a brief layover in France, they finally landed in Conakry, Guinea's capital—a city of around two million people, heavily influenced by French architecture and culture, a remnant of past colonialism.
Greeting them warmly at the airport was a businessman named Zheng Jinhui, a friend of Li Xingchao from Taiwan Province who'd spent many years trading timber and steel in Guinea. He showed great hospitality to Li Tang's group, bringing them to a Chinese restaurant run by a fellow countryman.
"I hear you're planning to explore resource projects here?" Zheng asked during dinner.
"That's our intention. We're here to evaluate opportunities," Li Tang replied honestly. He'd never been to Guinea, relying only on newspapers and media for preliminary knowledge. Feeling unsure, he sought Zheng's firsthand perspective. "How's the local business environment?"
"Not very good," Zheng admitted gravely. "With my business—timber—I mostly transport materials from the east to Conakry via waterways. The western coastal plains are flat, allowing easy transport. However, other types of businesses face significant logistical challenges. Unless your operations are based directly in Conakry, where development is decent, you'll struggle."
"What about safety?" Li Tang asked, concerned.
"Guinea has a military government, often unpredictable," Zheng pointed outside toward the bustling streets. "Conakry seems decent, mainly because the nation's wealth concentrates here. But if you venture inland eastward, poverty is severe—Guinea truly ranks among the world's poorest countries. On the streets, secure your valuables carefully—robberies happen frequently."
"And the mining investment climate?" Li Tang inquired further.
"Heavily influenced by French practices, Guinea attempted privatization and market reforms long ago, but unsuccessfully. In mining, I'd describe regulation as extremely loose and corrupt," Zheng explained candidly.
Li Tang handed Zheng a document—a simplified exploration proposal detailing a geographic location of interest, compiled by Lei Pingjin's team. "This is our primary interest area."
"I'll take you to investigate tomorrow," Zheng promised.
After spending a restful night in their hotel, Zheng brought them to the Chinese consulate, where the commercial attaché detailed Guinea's challenging business environment, highlighting important security precautions.
They then visited Guinea's Ministry of Mines and Geology, meeting Minister Praka. Upon reviewing their area of interest—located in Guinea's mountainous southeast region near Liberia—they discovered exploration rights had already been granted to a company named Newfield, a subsidiary of the Lituo Group.
Hearing this, Li Tang wasn't discouraged. Instead, he seemed to confirm some suspicions.
"What do you plan with Lituo's mining rights?" Zheng asked, puzzled.
"Nothing specific," Li Tang addressed Minister Praka directly. "Newfield's exploration rights expire this year. Have you extended them?"
"They applied recently—but for mining rights instead, not exploration," Praka answered straightforwardly.
"Mining rights?" Li Tang was astonished. "Have they conducted any exploration work?"
"No," Praka shook his head.
"No exploration, yet they applied directly for mining rights? Is that even allowed?" Li Tang couldn't hide his disbelief. "Did you approve this?"
"Such matters require presidential approval; discussions are ongoing," Praka explained, smiling broadly, displaying rows of brilliant white teeth. "Lituo is a globally recognized company. We warmly welcome investments from companies of their caliber, so their application should encounter few problems."
"That's extraordinary," Li Tang stifled his laughter, genuinely astonished. According to Praka, Lituo had performed virtually no exploration—no drilling, nothing—and yet confidently requested mining rights. Worse, their application was likely to succeed. The lack of regulatory oversight seemed surreal.
"We also warmly invite companies and investors from China to explore mining opportunities in our country," Praka continued warmly, smiling openly.
After a moment's thought, Li Tang nodded resolutely. "We intend to invest here."
Outside, Zheng couldn't conceal his confusion. "What's your actual plan?"
"We must seize these mining rights immediately—before Guinea formally grants Newfield the license!" Li Tang declared decisively.
Zheng stared at him, momentarily stunned. "But how is that possible?"
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