Chapter 339: Adventure to the Arctic
In Canada, mineral resources are administered and regulated by the respective provincial and territorial governments. However, when it comes to foreign investments, especially large-scale ones such as the high-profile case of Noranda Inc.'s previous attempted sale, several federal government departments jointly conduct rigorous reviews.
Noranda's assets involved multiple industrial systems and significant mineral rights, accompanied by substantial financial transactions. Thus, federal departments including Finance, Industry, and Natural Resources were highly attentive, closely monitoring and scrutinizing the developments. Various departments expressed differing views—some in support, others against—but unfortunately, the acquisition ultimately did not materialize.
Minister of Industry, Emerson, had just finished a meeting and walked out alongside Minister of Natural Resources, Jack.
"You know the Chinese Wukuang Group returned recently for discussions with Noranda, right?" Emerson initiated the conversation.
"Yes, I heard," Jack replied. "This time, they want Noranda to separately sell the shares of its subsidiary, Falconbridge. Noranda holds about 60% of Falconbridge. Honestly, I don't think it would be beneficial if the deal goes through."
"You're right; Falconbridge currently represents one of Noranda's few profitable ventures."
"All their valuable mining rights are under Falconbridge's name. Everyone knows that mineral extraction at the upstream end of the industry chain is the most profitable. If these lucrative assets are separated, Noranda will lose its soul completely. If there's a vote, I'd likely oppose such a deal," Jack explained.
"But Noranda's current predicament indeed requires external assistance to lift them from the mire," Emerson noted.
"That's a company matter," Jack shrugged indifferently.
"You're correct," Emerson nodded, though his expression remained relaxed. "News has spread that the major shareholders of Noranda have already rejected Wukuang's proposal to purchase Falconbridge. However, Jack, have you noticed something strange in the news a few days ago? A peculiar figure joined Wukuang Group's acquisition team."
"Yes, I saw that."
Discussing this, Jack's previous cautious and solemn demeanor relaxed significantly. After all, Noranda was a national enterprise, making the matter highly sensitive. The Conservative Party and the New Democratic Party had both stepped up vigorously against the acquisition. Naturally, opposition parties criticizing the government was routine. Nonetheless, public sentiment was stirred, ultimately derailing this substantial merger.
However, when discussing unrelated and less sensitive matters, they felt no need to be overly cautious and could speak openly.
"You're talking about Li Tang, the legendary figure from China, right?" Jack smiled.
"Exactly," Emerson confirmed, nodding gently. "He has deep connections with Wukuang Group and has achieved remarkable success in both mining and business."
"He established a joint coal mining venture in British Columbia, collaborating with a local firm, investing a total of 50 million USD to explore coal in the eastern Rocky Mountains. It's a substantial investment—he appears determined and confident," Jack stated, clearly aware of the details. "From the resource department in British Columbia, I learned they secured an exploration area of roughly 200 square kilometers."
In Canada, obtaining exploration rights was relatively easy. Any individual or enterprise, regardless of nationality or expertise, could apply. However, after obtaining these rights, they must meet mandatory exploration spending thresholds based on the area's size. Once the investment per unit area reached the required benchmark, they could then apply for mining rights.
Although obtaining rights wasn't complicated, actual exploration and construction were extremely challenging due to strict environmental regulations. Performing any work within a permitted area required meticulous adherence to legal frameworks. Even damaging a single small tree or patch of grass could constitute a violation.
Emerson wasn't surprised, having received similar information, hence his reason for approaching Jack. "Do you think Li Tang, this Chinese entrepreneur, will actually find significant coal deposits in the Rocky Mountains?"
"Of course," Jack asserted confidently. "That region is known for its abundant coal resources. Finding coal isn't the issue; the challenge is determining how large these coal reserves might be. Also, it matters whether they're exploring shallow surface layers or deep underground seams extending down a thousand meters."
"Would deep underground coal seams at such depths even matter?"
"Maybe not to us, but Chinese companies have the capability to mine deeply buried coal seams," Jack smiled, visualizing the possibilities. "Bringing in Chinese enterprises to develop our coal resources is indeed one of our strategic plans."
"Most of our annual coal production already goes to China. If Chinese companies directly invest here, local employment and tax revenues would greatly benefit."
"I recently spoke with Frando," Jack suddenly recalled another conversation related to Li Tang's coal investments. "Frando told me Li Tang has never failed in exploration projects worldwide. He believes if we aim to boost our mineral resource development, Li Tang is the ideal catalyst."
"Did you watch Frando's debate with Layton on TV?" Emerson laughed.
Jack nodded, smiling slightly. "Layton remains as arrogant and blindly prejudiced as ever."
"It seems you're optimistic about Li Tang's Canadian investments," Emerson noted.
"Compared to the overall economic benefit Wukuang Group's acquisition of Noranda might offer, I personally believe Li Tang holds greater potential," Jack praised. "If Li Tang's Lianying Mining can soon generate substantial profits and reinvest them into our market—establishing one or two major mines—our national economy would greatly benefit."
"The iron ore business's profitability is enviable now," Emerson added with anticipation. "I hope he'll soon come to us to discuss developing large-scale mines."
Canada's mineral resource environment was characterized by easy entry but stringent exit requirements; large-scale mining operations faced strict requirements for funding, technology, and environmental protection. They could only hope global mining giants would invest locally to boost the economy.
He looked playfully at Jack. "Even the Prime Minister hopes Li Tang can nurture a new world-class mining enterprise here, just like Lianying Mining."
…
Li Tang was unaware his actions had drawn intense scrutiny from countless eyes across Canada. His visit to Canada indeed had investment intentions. Funds from the Pebble Project sale had been idle, confined to Austrian accounts. His companies at home were financially secure, especially after the 600 million RMB obtained from selling Shazhai Molybdenum Company. The first payment of 200 million RMB before New Year's had provided ample liquidity for stable operations.
Lianying Mining's construction was orderly, and short-term liquidity was sufficient. Future needs like port and railway constructions—about one billion Austrian dollars—could be gradually raised over the next two to three years, leaving him unhurried.
At the Talego project, Wukuang Group's team handled development; although coal projects had stalled due to public opposition in Mongolia, copper-gold mine construction progressed smoothly. Besides this, the Simandou iron ore project was gradually advancing, without requiring significant immediate investments.
Idle capital without financial expertise gradually lost value. Investing these funds into mineral exploration was thus his best option. This was Li Tang's forte, a strategy long planned and greatly anticipated.
"You invested in coal?" Frando, neatly groomed, holding a thick cigar, stared puzzled at Li Tang.
"I'm interested in all kinds of minerals," Li Tang replied, sipping coffee. Finding it bitter, he poured plenty of sugar, stirring rhythmically.
"We previously agreed to jointly explore copper in Congo. Are you still interested?" Frando anxiously asked.
"Yes, absolutely!" Li Tang nodded firmly. "However, Africa's overall infrastructure is poor, with considerable political instability. If our investment goal includes developing mines there, risks significantly rise, making it less profitable."
"I fully acknowledge Canada has the world's most attractive mining investment environment. Our annual mining industry evaluation consistently ranks first globally," Frando noted proudly as a native Canadian. Yet, his face turned worried: "However, large discoveries here have become incredibly rare. Canada is vast but has thousands of exploration companies already operating extensively. Discovering valuable deposits now is nearly impossible."
For decades, mineral exploration and development had dominated Canadian industries. Here, capital markets passionately supported mining ventures, employing countless talented professionals and adventurous explorers. Most significant deposits had already been uncovered.
Precisely for this reason, Frando traveled globally, from South Africa and Congo to Myanmar, seeking undiscovered riches in primitive jungles, knowing such opportunities outweighed those remaining in Canada.
"It's difficult indeed, but gems still remain hidden," Li Tang drank his sweetened coffee contentedly. Meeting Frando today wasn't solely to discuss African copper projects; he had other intentions too.
"I've already invested in a coal project here in Canada, but someone else is managing it. They don't need my direct involvement."
Li Tang looked at Frando and spoke frankly about his plans: "I'll be staying in Canada for a while longer. I have some thoughts about visiting the Arctic Circle. I've heard it's covered in snow and ice, inhabited by polar bears and penguins. I've never seen them with my own eyes, so I'd like to go and take a look."
"You want to go on an Arctic adventure?" Frando shivered involuntarily at the mere thought of the frigid temperatures there.
"Yes." Li Tang nodded firmly. "I want to visit Baffin Island. I've heard it's Canada's largest island and inhabited as well. The scenery there is supposed to be pretty good, and there are regular flights and hotels catering to tourists. Although it's within the Arctic Circle, the landscape is beautiful, albeit somewhat dangerous, so I would need professional help."
"You could charter a small plane directly to Baffin Island," suggested Frando. "There's a landing strip left behind by previous research bases, and then you can use a helicopter to reach your desired destinations. Alternatively, you could contact a travel company; they'd be able to arrange your entire trip."
Frando had visited Baffin Island once but never wanted to go back. As far as he was concerned, it wasn't particularly interesting. Clearly, he underestimated Li Tang's plans.
"In addition to sightseeing, I have another objective: to explore an area that's potentially rich in iron ore."
Li Tang sipped his sweetened coffee casually as he spoke.
"You're going to Baffin Island to look for iron ore?" Frando was so shocked that his jaw nearly dropped.
Clearly, it was a bold idea. Frando knew well that Canada's Arctic regions indeed held abundant mineral resources, with numerous mines scattered throughout its frozen expanses. In fact, many of Canada's renowned diamond mines were located precisely within the Arctic Circle. But exploring for minerals on Baffin Island was extremely challenging, nearly impossible. If exploration itself was difficult, actual mining operations would be even harder—pushing human capabilities to their absolute limits.
"I'll just go and take a look. Maybe there's an opportunity," Li Tang said lightly.
"You really are insane!" Frando couldn't quite fathom Li Tang's intentions but still asked, "What kind of help do you need from me?"
"I need to gather historical exploration data regarding iron ore on Baffin Island. If I remember correctly, there's a project called Mary River Iron Mine," Li Tang explained, directly stating his needs. Clearly, obtaining data in Canada would be easier through someone prominent in the industry, and Frando fit that description perfectly.
"Mary River Iron Mine?" Frando nodded readily, "I'll collect the information for you as soon as possible."
"Thank you!" Li Tang lifted his coffee cup as if to toast.
…
Hu Zhenchi returned to Yanjing with his team.
The senior management of the Wukuang Group listened carefully to Hu Zhenchi's detailed report on their recent negotiations with Noranda Inc., specifically concerning their second attempt at acquisition. For Wukuang Group, the outcome was most important, and unfortunately, it wasn't promising. It was clear their strategy of acquiring parts of Noranda was not going to succeed.
After the meeting concluded, Niu Fu called Hu Zhenchi back to his office and asked, "Li Tang traveled with you. Did he stay behind in Canada instead of returning?"
"He said he was heading to the Arctic Circle," replied Hu Zhenchi, who hadn't mentioned Li Tang in the earlier briefing.
"When you were still in Canada, you mentioned by phone that Li Tang invested in a coal-mining project there?" Niu Fu had been intrigued by this unexpected investment and was puzzled as to why Li Tang would suddenly venture into coal.
"In British Columbia. He partnered with an immigrant businessman originally from Shanxi Province to invest in coal exploration deep in the Rocky Mountains," Hu Zhenchi explained. "The coal project also has Shenxia Group's investment. I was there when Li Tang visited the site. He decided on the spot to invest 50 million U.S. dollars: Li Tang himself contributed 30 million, taking a 50% share, and the Shanxi businessman and Shenxia Group each took 25%. The local Shanxi businessman is primarily responsible for exploration, coordination, and management. Shenxia Group's Xie Jiashu stayed behind as well. If everything goes smoothly, they should have already secured exploration rights and started formal exploration work. I heard if preliminary exploration goes well, they'll invite exploration teams from China."
"Coal?" Niu Fu fell into deep thought. He found it quite unexpected for Li Tang to invest in coal in Canada. Previously, he'd never heard that Li Tang was interested in coal exploration and had even assumed Li Tang had limited expertise in this field. Zhongcheng Mining's right to operate the Talego coal mine was secured through a share-swap deal involving Nanhuang Resources Company.
"Actually, Li Tang previously worked on a coal project in Qianzhou Province," Hu Zhenchi reminded him. "That was technically his first project when he joined our company."
"Oh right, I'd forgotten about that," Niu Fu recalled.
"When I was leaving Canada, Li Tang had already left Vancouver for Toronto. From what he told me, he planned to go to the Arctic Circle."
"What's he doing in the Arctic Circle?" Niu Fu was even more confused.
"Maybe just sightseeing," Hu Zhenchi speculated. "Honestly, this entire trip to Canada, Li Tang spent most of the time traveling and shopping with his girlfriend. It didn't really look like he was seriously hunting for projects."
"Really?" Niu Fu found this odd.
"I think the coal investment was something he casually decided, possibly just to help Shenxia Group. It seemed like Li Tang didn't put much thought into it. He invested 30 million U.S. dollars as if losing it wouldn't matter at all," Hu Zhenchi added.
"Impossible—30 million U.S. dollars is still a huge amount," Niu Fu remarked skeptically.
"I accompanied Li Tang throughout the trip, but frankly, I didn't gain much insight. Even our geological experts couldn't figure out his reasoning or objectives. When I explicitly asked Li Tang, he mentioned that it was his first time venturing deep into the Rocky Mountains, and his first inspection of Canada's coal mines. He literally took a brief look, exchanged a few words with the locals, then casually decided to invest," Hu Zhenchi explained further.
"That does seem very impulsive," Niu Fu admitted.
"This is why I didn't recommend following Li Tang into this coal project when I called earlier," Hu Zhenchi reminded him.
Earlier, they had seriously considered whether to join Li Tang's investment. After rational evaluation, Wukuang Group had decided not to proceed. Overseas investments, especially without comprehensive detailed information or clear investment expectations, carried substantial risks. Even if they trusted Li Tang personally, such large-scale funding proposals wouldn't pass board approval without solid justification.
Recently, Niu Fu also struggled to understand Li Tang's true intentions. Looking back, however, Li Tang had always been unpredictable. Since Wukuang Group hadn't invested, Niu Fu wasn't overly anxious—just curious.
"Shenxia Group is investing 15 million dollars, nearly 100 million yuan. Recently, Li Xingchao frequently contacted me to inquire about the Canadian side," Niu Fu remarked.
"Xie Jiashu from Shenxia Group accompanied us the entire time. He saw exactly what we saw, and since then, he's been staying in Canada, meaning he knows more about the coal project than we do," Hu Zhenchi replied, puzzled about why Li Xingchao would seek further information from them.
"They must be uneasy," Niu Fu sympathized. "An overseas exploration project costing over 100 million yuan needs board approval. Recently, Li Xingchao applied multiple times, but their board repeatedly scrutinized it without giving final approval. He's keen to support Li Tang's idea, but the board obviously finds it unjustifiable. Without detailed project documents or clear expectations, suddenly investing such a massive sum overseas naturally wouldn't pass easily. As a state-owned enterprise, Shenxia Group is very cautious with large-scale, especially overseas, investments."
"They could simply decline to invest, just like we did," Hu Zhenchi suggested lightly, glad they didn't have to worry about losing such a significant sum. They also doubted Li Tang would deceive them since, given his financial strength, the money was trivial.
"A few days ago, Li Xingchao told me he actively convinced Li Tang to investigate coal exploration. Clearly, Li Xingchao wanted a coal project and asked Li Tang for help. But Li Tang showed no interest in domestic exploration—he insisted on going overseas," Niu Fu explained.
"Li Tang truly has his own way, adamantly choosing overseas projects over domestic ones," Hu Zhenchi observed.
"Young people are bold and energetic," Niu Fu remarked. "Li Xingchao knows you're back and will visit shortly to discuss the coal project. Just honestly share what you saw and thought."
"I really didn't see much," Hu Zhenchi sighed.
"Just tell him the truth," Niu Fu advised reassuringly.
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