China and Australia sign 8.8 billion U.S. dollars, single deal and 70% agreement on energy minerals

International Energy Newsletter: For China's resource bottleneck, the management team is not satisfied with only purchasing large quantities of minerals and other resources from the international bulk commodity market. According to news from foreign media yesterday, China and a resource-rich country, Australia, signed a cooperation agreement with a total value of up to 8.8 billion U.S. dollars this week. The cooperation agreement is mainly focused on energy and mineral resources.

It is reported that China and Australia have signed 10 bilateral agreements, of which 7 are concentrated in the energy and minerals industry, including the China Development Bank (hereinafter referred to as "the CDB") to several large Australian mining projects. The largest amount was the **1.2 billion U.S. dollar agreement with Carrara Resources, a joint venture between Angang and Australia's Jindabi.

In addition, the agreement also includes an agreement between Australia's leading telephone company, Australia Telecom, and China ZTE Corporation to expand their relationship of cooperation. The Australian Telecom company will become the preferred telecommunications provider of ZTE in the world in the future; Australia Express also announced that it will expand with China. Eastern Airlines' code-sharing alliance relationship.

Previously, as the Australian government is currently seeking to collect a new mining tax, BHP Billiton, Rio Tinto and other Australian miners have expressed opposition to this, and claimed that the introduction of the mining tax will enable them to reduce the new project investment of 20 billion US dollars, Rio Tinto It even stated that Australia is currently the country with the highest investment risk in the world.

However, our country’s signing of a huge cooperation agreement with Australia is exactly the reason for the government’s “support”. Australian Prime Minister Kevin Rudd also said at a press conference afterwards: “China is still the most important partner in the minerals industry in Australia. The introduction of mining taxes does not inhibit Chinese investment interest in Australia.”

However, China’s move is definitely not merely to “support” the Australian government to levy a resource tax. The resource bottlenecks faced by China and Australia’s abundant resources are the fundamental reasons for this cooperation.

According to the latest news from the Australian Bureau of Agriculture and Resources Economics, Australia’s merchandise exports for the 2010/2011 fiscal year are expected to increase by 23% to A$202.49 billion (approximately US$178.84 billion) annually; however, prices of coal and iron ore will increase and exports increase. As a result, the export of mineral resources is expected to increase by 29% to A$169.82 billion (approximately US$150 billion).

Iron ore is "the highlight"

Among the agreements signed this time, the agreement on iron ore can be said to be the core content.

It is understood that the largest amount of this ** project is for the Carrara Resources Corporation's $ 1.2 billion**. In fact, Carrara Resources was established in 2007 by Anshan Iron and Steel to achieve a "go global" strategy and international operations with a joint venture with Australia's Jinda Bi Metals, each with 50% stake. It is understood that the main business of Carrara Resources is the development of Australian iron ore resources, and its iron ore mine has been proved to have a recoverable reserve of over 2 billion tons of iron ore. After the project is fully put into production, it can form an annual output of 10 million tons of iron ore. The total investment of the project is 1.975 billion Australian dollars (about 1.744 billion U.S. dollars) and it is also the largest resource project being constructed in Australia.

According to the agreement, CDB will set up a syndicated bank including Bank of China, Industrial and Commercial Bank of China and Agricultural Bank of China to pay US$1.2 billion to support the development of the project's infrastructure such as ports and railways.

Another Australian iron ore company, Aquila, also signed a memorandum of cooperation with China Development Bank. When appropriate, CDB will provide them with **, while China’s leading steel company Baosteel is the second largest in Aquila. shareholder.

Australia’s third largest iron ore producer, FMG, also announced that it has signed a cooperation agreement with Gezhouba Group in China, and Gezhouba Group plans to expand the annual production of 55 million tons of Chichester mine to an annual output of 95 million tons in cooperation with FMG. As required by FMG, Gezhouba Group “is also likely to provide projects with certain cost advantages** source”.

According to industry analysts, the ever-failing defeat in the iron ore inter-exchange market negotiating table, huge resource costs engulfed China's manufacturing profit margins, and also formed a higher inflation expectations. At this time, the management of our country has apparently realized how critical it is to hold the resource discourse right for future economic development. The large-scale investment in Australian mineral resources, especially iron ore resources, and the increase in the iron ore production capacity of steel enterprises in China are fundamental solutions to resource bottlenecks.