Chương 1232: Chapter 1232: The internally divided Qianzhou Rare Earth Group
'Mr Xia, let me introduce you. This is Director Chen Liyan of the Ministry of Metallurgical Industry's Rare Earth Office.'
'Director Chen, this is Mr Xia.'
'Mr Xia, I have long admired your name, and now I am finally honoured to make your acquaintance.'
'Director Chen, hello, it's an honour to meet you!'
...
After Sun Yucai introduced the two sides as an intermediary, Xia Yu shook hands with Chen Liyan to exchange pleasantries.
In terms of posture, it was clear that Chen Liyan had lowered himself a little, showing Xia Yu enough respect.
After both parties had taken their seats, Sun Yucai said to Xia Yu bluntly, 'Mr Xia, regarding your previous proposal, I have already reported to the provincial government, which will then report to the higher authorities. Director Chen will talk to you about the details.'
Chen Liyan immediately took over the conversation: 'Yes, Mr Xia, this matter cannot be decided by our Rare Earth Office and the Ministry of Metallurgical Industry alone. It has also been discussed at the top. The meaning is that the general direction is agreed, but the details need to be clarified.'
'This is certain. Even close relatives have to account for their actions. Everything must be made clear at the beginning, so as not to sow the seeds of future problems.'
Xia Yu smiled and nodded.
Chen Liyan smiled and said, 'Mr Xia, I'll be blunt!'
'Remember everything.'
After reminding his subordinate, he sat up straight, his smile fading, and said in a dignified tone, 'Mr Xia, there are currently 19 rare earth mines that have been explored and mined in Qianzhou, with 49,000 tons of heavy rare earth reserves and 680,000 tons of light rare earth reserves.
'There are thirteen rare earth mining licenses, belonging to thirteen rare earth companies. Eight of these companies are under the jurisdiction of our Ministry of Metallurgy, and five are controlled by the local government.'
'These companies can be consolidated into one company, and the government will no longer issue rare earth mining licenses to a second company, while at the same time fully cracking down on private mining and smuggling.'
'The value of these mines has been urgently assessed. Here is a detailed and summary breakdown of the assessed value. You can have a look.'
With that, Chen Liyan took out a document and handed it to Xia Yu.
Xia Yu nodded slightly and took it, quickly skimming through it.
The document contained a lot of content, much of which he skipped over, focusing on the names of the mines, companies, reserves and values. He skimmed over the other introductions.
In his previous life, he was from Qianzhou City, so of course he knew how much rare earth was stored there. The proven reserves of heavy rare earth were only 49,000 tons, and the light rare earth was 680,000 tons.
Not to mention the even lower value of light rare earth, which is mainly used in civilian applications. Just the strategic heavy rare earth, with proven reserves of about 470,000 tons, has a long-term reserve of over 9.4 million tons!
And now it's only proven to have 49,000 tons!
A few minutes later, Xia Yu's eyes fixed on the total appraised value at the end.
428.54 million yuan!
According to the current official exchange rate of 1.9573 yuan to the US dollar, it is only worth 219 million US dollars!
Perhaps for Qianzhou City, this is a huge fortune.
But for Xia Yu, it is practically worthless!
However, considering the current situation in the mainland and the purchasing power of the money, this assessed value is relatively fair.
Come to think of it, the mainland itself assessed it, so it is impossible to suppress its own value.
'This assessment table is very fair, I have no comments,'
Xia Yu closed the material and said with a smile.
Chen Liyan revealed a smile and continued, 'Mr. Xia, this is the value assessment of the mines, and this is the current value.'
'However, due to technical reasons, the proven reserves are definitely not at their peak. We have reason to believe that there are still rich rare earth deposits buried underground in Qianzhou City.'
'In addition, if these mines and companies are integrated together, it involves franchises, the value of potential mineral deposits and the value enhancement behind them.'
'Therefore, according to what is written above, our cooperation in this regard is definitely not calculated based on the current value of the mines and companies, but also needs to fully incorporate other factors.'
Xia Yu nodded in understanding, saying, 'This is certain, I can accept it. Director Chen, just tell me, what is the price set by the authorities for the integrated company, and how can we cooperate?'
Having received Xia Yu's support, Chen Liyan felt assured, and after a moment of thought, he said slowly, 'Mr Xia, the authorities say that you are our most loyal friend, and have done a lot for the country. Therefore, the authorities have decided that the value of the integrated company will be set at 800 million yuan.'
After saying this, Chen Liyan fixed his gaze on Xia Yu.
'800 million?'
Xia Yu was greatly surprised, as the price was 800 million yuan!
'Yes, that's what the higher-ups decided,'
Chen Liyan nodded to confirm.
Sun Yucai, who was standing nearby, also fixed his gaze on Xia Yu, his hand unconsciously clenching into a fist.
Before coming here, he and Chen Liyan had already discussed this decision from the higher-ups, and they weren't sure if Xia Yu would have any objections to the price.
He was clearly worried, and he wanted to find a good way out for Qianzhou City so badly...
Opinion?
Xia Yu definitely has no opinion!
This price is not high, but low!
It's too low!
Without considering the reserves that will be discovered in the future, just by integrating all the current mines and companies together and obtaining the exclusive rights, with a few simple manipulations, he can double the export price of rare earth ore.
In this way, the value of the mine, which is currently valued at more than 400 million yuan, will soon double to more than 800 million yuan?
More importantly, it's the future that counts!
The purchasing power of money is not static, and the amount of mineral deposits will gradually be discovered.
If the technology is developed independently and reaches the international advanced level, the price of a 99.8% pure mixed metal rare earth ingot, which is refined from ordinary rare earth ore with a value of more than 400 US dollars per ton, will reach 160,000 US dollars per ton.
The highest price for rare earth powder, thulium powder, is as high as 7.5 million US dollars per ton!
In the final analysis, technology is the primary productive force. Whether rare earths sell for a low price or a high price depends on technological strength.
As long as the mainland and Xia Yu can cooperate and gradually achieve results, it will be a win-win situation for both parties.
'Director Chen, I have no objections, and I can fully accept this price,'
Xia Yu said softly with a smile and a nod.
Sun Yucai's tension disappeared at these words, and an unconscious smile appeared on his face.
Chen Liyan was also very pleased, as this was a good start.
He continued, 'Mr Xia, the price is fine, so let's talk about the other details of the cooperation.'
...
After that, the atmosphere of the negotiations between Xia Yu and Chen Liyan was very good. Chen Liyan had already been told the bottom line by his superiors, and had also been told that he did not have much autonomy.
So the negotiations with Xia Yu were more about communication than negotiation.
The key issue was the shareholding. The instructions from above were that the established Qianzhou Rare Earth Group could transfer 40% of the shares to Xia Yu, with the remaining 60% jointly owned by the Qianzhou municipal government and the Ministry of Metallurgical Industry's Rare Earth Office, with the Ministry of Metallurgical Industry owning 41% and the Qianzhou municipal government 19%.
As for taxes, the Qianzhou municipal government could retain 60% and hand over the remaining 40%.
Of course, during the negotiations, Xia Yu took into account the special nature of state-owned enterprises and, in order to avoid interference, made a request that the right to appoint personnel of the parent company of Qianzhou Rare Earth Group be owned by the authorities.
However, Qianzhou Rare Earth Group must achieve 'dual links and full coverage' of rare earth mining and smelting separation.
All rare earth mining resources are concentrated in Qianzhou Rare Earth Mining Co., Ltd., which is responsible for the exploration and mining of rare earth resources.
Qianzhou Rare Earth Development Co., Ltd. is responsible for the industrial chain of smelting, processing, trade, research and development, and application.
Although the two companies belong to the Qianzhou Rare Earth Group, they are under separate management.
The employees of Qianzhou Rare Earth Mining Co., Ltd. are all former employees of the major mines. The company's personnel appointments and management are entirely the responsibility of the officials, and Xia Yu's side can send people to supervise to prevent corruption and other phenomena.
As for Qianzhou Rare Earth Development Co., Ltd., the personnel appointments and management are the responsibility of Xia Yu's side, and the officials can send people to supervise.
Although the two companies are separated, especially Qianzhou Rare Earth Development Co., Ltd., which is still run by Xia Yu's side, with a strong capital atmosphere, there is one rule that must be followed.
That is, national strategic interests come first. If there are special circumstances, Qianzhou Rare Earth Group must execute the directives of the state.
Xia Yu had no problem with this last requirement at all.
Since Xia Yu could hold 40% of the shares, according to the original valuation of 800 million yuan, he would need to inject 533.34 million yuan in capital. Of this capital, 400 million would need to be converted into the equivalent in US dollars.
After everything was settled, it still had to be reported to the higher-ups.
Chen Liyan reported everything, and after waiting until the next day for the higher-ups to give the go-ahead, he signed the agreement with Xia Yu.
'Papatapata...'
In a meeting room of the Guangdong Provincial Government, Xia Yu and Chen Liyan signed the agreement in the presence of Liu Zhongfei and Sun Yucai, and the room burst into warm applause.
'Mr Xia, it's been a pleasure working with you, and the development of the country's rare earth industry still requires a lot of your hard work!'
'Director Chen, this is what I should do. Don't worry, you should be able to see some results before the end of the year.'
'Well, I believe you!'
After shaking hands with Chen Liyan, Xia Yu shook hands with the smiling Sun Yucai and said with a smile,
'Secretary Sun, I hope that the government can crack down on illegal mining within the Qianzhou city as soon as possible to prevent internal chaos and affect the group's strategy.'
Sun Yucai assured him without hesitation: 'Mr Xia, this is my responsibility. Don't worry, the government will crack down on such illegal mining and smuggling for the healthy development of the rare earth industry in Qianzhou City.'
'Two months!'
'I promise you, within two months, it will be completely eradicated. We will crack down on all parties involved without mercy, arresting and punishing those who deserve it!'
As he spoke, Sun Yucai's gaze was very sharp, showing his resolute attitude.
Although Qianzhou City government only held 19% of the shares, it was said that 60% of the taxes could be retained by Qianzhou City, which was the greatest favour!
The dividends from the shares held were only a fraction of the taxes, which were far more!
Central enterprises like this one would not normally give 60% of the taxes to the local government, and Qianzhou Rare Earth Group was truly a special case!
He knew that this was the care of the higher authorities for the Gannan old revolutionary base area.
Of course, before that, he had also found many elderly people from the old revolutionary base areas in Gannan. If not for the voices of many people, Qianzhou City would not have been able to receive special attention.
After the celebration, Xia Yu took Elena and the others and set off for the journey back to Xiangjiang.
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