(Source: China Business Network 2024-07-05)
With the continuous development of new energy, the competition for core mineral resources, led by w88 online sports betting ore, has become increasingly fierce.
Recently, my country's "w88 online sports betting mining duo" Tianqi w88 online sports betting Industry (002466.SZ, 09696.HK) and Ganfeng w88 online sports betting Industry (002460.SZ, 01772.HK) have encountered setbacks overseas. The two companies' local mineral resource ownership issues have suddenly changed.
In this regard, Lin Boqiang, dean of the China Energy Policy Research Institute of Xiamen University, said in an interview with a reporter from China Business News: "Although w88 online sports betting resources face the risk of excess in the short term, in the process of carbon neutrality, the demand for w88 online sports betting resources is very large. Currently, scholars in the industry generally believe that w88 online sports betting resources are scarce resources. This kind of 'nationalization' process in overseas resource countries is foreseeable."
In fact, due to the uneven distribution of w88 online sports betting resources, it has become inevitable for my country's w88 online sports betting mining companies to go global. For this purpose,Dong Xiucheng, Executive Dean of the China International Carbon Neutral Economic Research Institute, w88 casinoIt is suggested that on the one hand, the management of mining and development should be strengthened domestically to achieve orderly development; on the other hand, when enterprises go global, they should consider the core demands and transform their concepts into a global perspective.
Overseas minerals are “nationalized”
On June 25, Ganfeng w88 online sports betting issued an announcement regarding arbitration matters involving its holding subsidiaries.
The reporter learned that this announcement involves Ganfeng w88 online sports betting’s mining concession in Mexico.
In August 2023, the Mexican General Administration of Mining issued a notice to cancel the 9 mineral concessions of the Sonora w88 online sports betting clay project (hereinafter referred to as the "Sonora Project") held in Mexico by Ganfeng w88 online sports betting's affiliated company Bacanora. The mineral concession allows Bacanora to operate the Sonora project in Mexico.
After receiving the notice, Ganfeng w88 online sports betting filed an administrative review with the Mexican Ministry of Economy through its subsidiary Shanghai Ganfeng and three holding subsidiaries registered in Mexico (hereinafter referred to as the "Mexican subsidiaries") to question the above matters. In November 2023, regarding the administrative review filed by the Mexican subsidiary, the Mexican Ministry of Economy made a decision to uphold the decision to cancel the mineral concession issued by the former Mexican Mining Directorate. In January 2024, the Mexican subsidiary submitted an administrative litigation application to the local Federal Court of Administrative Justice, requesting to revoke the cancellation resolution of nine concessions. The administrative litigation application has been accepted and is currently pending resolution.
The reporter learned that in August 2022, Ganfeng w88 online sports betting acquired 100% of the equity of Bacanora through Shanghai Ganfeng with a transaction amount of no more than 190 million pounds.
Regarding the impact of this incident on the company, the reporter contacted Ganfeng w88 online sports betting Industry, but no reply was received as of press time.
Ganfeng w88 online sports betting mentioned in the announcement that since the written hearing stage of the arbitration has not yet begun, no decision has been made on the applicant’s compensation request. Therefore, there is still uncertainty about the impact of this arbitration on the company's profits and losses.
Previously, Tianqi w88 online sports betting, another domestic w88 online sports betting giant, also encountered changes in its overseas minerals.
Public information shows that on May 31, 2024, Tianqi w88 online sports betting's joint-stock company Sociedad Quimicay Minera de Chile S.A. (Chile Chemical Mining Company, hereinafter referred to as "SQM") and Corporacion Nacional del Cobre de Chile (Chile National Copper Company, hereinafter referred to as "Codelco") signed a Partnership Agreement (hereinafter referred to as the "Partnership Agreement"). According to the Partnership Agreement, the core w88 online sports betting business of Atacama Salt Lake will be majority owned by Codelco in the joint venture from 2025, and will be consolidated by Codelco from the second stage. SQM is expected to no longer have control of its core w88 online sports betting business in Atacama, Chile, starting in 2031.
As for the impact of the above incident, Tianqi w88 online sports betting has not responded to reporters as of press time. However, Tianqi w88 online sports betting stated in the announcement that it is not expected to have a significant impact on the company's financial status and operating results in 2024. At the same time, Tianqi w88 online sports betting warned in the announcement that the transaction may not be completed, SQM will lose control of its core w88 online sports betting business, SQM's w88 online sports betting business income will be affected, which will affect the company's investment return and economic interests, and the company's rights and interests in participating in SQM governance will be affected.
The reporter learned that in December 2018, Tianqi w88 online sports betting completed the acquisition of 23.77% of Class A shares of SQM, with a total transaction price of US$4.066 billion (converted to RMB 27.844 billion based on the exchange rate on the delivery date).
Lin Boqiang said in an interview with this reporter: "Although w88 online sports betting resources face the risk of excess in the short term, in the process of carbon neutrality, the demand for w88 online sports betting resources is very large. Currently, scholars in the industry generally believe that w88 online sports betting resources are scarce resources. This kind of 'nationalization' process in overseas resource countries is foreseeable."
How to control the risks of going overseas?
As countries around the world continue to make efforts in the field of new energy, core mineral resources, including w88 online sports betting ore, have received focus.
Dong XiuchengIn an interview with this reporter, he said: "At present, when we talk about energy security, oil and natural gas are mentioned most. In the future, with the energy transformation, the connotation of energy security will continue to extend, from traditional fossil energy to key minerals. As the importance of w88 online sports betting resources for the development of new energy industries such as power batteries and energy storage continues to become more prominent, resource countries are paying more and more attention to the competition for resources in this area."
Tianqi w88 online sports betting said in a reply to investors on the Interactive Platform that the company purchased 23.77% of SQM’s equity in 2018 based on its long-term optimism about the development prospects of the new energy industry and SQM’s high-quality resource endowments. The Atacama Salt Lake in Chile, which SQM is developing, has a high w88 online sports betting concentration, large reserves, mature mining conditions, and low operating costs. It is a salt lake resource with extremely superior endowments worldwide and is an important production area for global w88 online sports betting products. Investing in SQM's equity can obtain sustained, stable, and good investment returns; SQM has stable and reliable profitability and good dividends. By investing in SQM's equity, the company is expected to obtain long-term, stable, and good investment returns.
Lin Boqiang said that when the two w88 online sports betting mining companies invested in the merger and acquisition process, the prices were very good. Although there were risks, there was still room for profit after calculation, so the acquisition was carried out. Now we are facing risks such as "nationalization" of resources and dilution of equity, which need to be considered at the beginning of mergers and acquisitions.
The reporter learned that since joining SQM until the end of 2023, Tianqi w88 online sports betting has recognized a cumulative investment income of approximately 10.1 billion yuan; according to the dividend plan announced by SQM, the amount corresponding to the dividend share that Tianqi w88 online sports betting should enjoy based on the proportion of equity held has accumulated to approximately 7.9 billion yuan.
In fact, the distribution of global w88 online sports betting resources is uneven. According to data from the United States Geological Survey (USGS) in January 2024, the world's currently proven and controllable w88 online sports betting resources have reached 105 million tons of metallic w88 online sports betting equivalent, an increase of 7% from the data released in January 2023, including Bolivia, Argentina, the United States, Chile, Australia and The total of China's proven and controlled w88 online sports betting resources accounts for more than 80% of the global total; global w88 online sports betting reserves have reached 28 million tons of metallic w88 online sports betting equivalent, an increase of 8% from the data released in January 2023, and are mainly distributed in Chile, Australia, Argentina, China, and the United States, accounting for more than 80%.
As the demand for new energy vehicles and energy storage industries continues to grow, global w88 online sports betting carbonate supply will still maintain rapid growth in 2023. According to Fastmarkets statistics for the fourth quarter of 2023, the total global supply of w88 online sports betting compounds in 2023 will be approximately 860,000 tons of LCE (w88 online sports betting carbonate equivalent), a year-on-year increase of 26%. Among them, China's w88 online sports betting salt supply accounts for 68% of the total global supply, the South American w88 online sports betting triangle (Bolivia, Argentina, Chile) supply accounts for 28% of the global total, and the remaining 4% comes from the combined supply of the United States or Australia and other regions.
"The current status quo of overseas w88 online sports betting resources is difficult to change. From this perspective, w88 online sports betting mining companies going global is an inevitable result. It is also inevitable to take risks in this process. The occurrence of the above two events also serves as a reminder to other companies in the industry that companies need to be more cautious in the process of overseas w88 online sports betting resource mergers and acquisitions in the future." Lin Boqiang said.
For future enterprises to participate in overseas mineral resource mergers and acquisitions,Dong XiuchengIt is recommended that on the one hand, the management of mining and development should be strengthened domestically to achieve orderly development; on the other hand, when enterprises go global, they should consider the core demands and transform their concepts into a global perspective. In the process of overseas mergers and acquisitions of assets, you need to comply with local legal and policy requirements. In addition, the overseas resources of the above two w88 online sports betting mining companies have been "nationalized", which does not mean that they have been confiscated. Everything needs to be operated within the legal framework. For resource countries, with the development of w88 online sports betting resources, companies going global should also consider building local factories to drive employment and tax revenue, so as to achieve win-win cooperation.
At the same time, Lin Boqiang suggested that in fact, Chinese companies have had many experiences and lessons in overseas mergers and acquisitions before. This time, the situation arises, and we should be more conservative in the process of overseas asset mergers and acquisitions.
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