RE:RE:Chinese State Owned CompaniesEvh,
Both Lundin and Freeport abandoned Tenke Fungurume, even though in terms of copper equivalent it is for superior to Kamoa-Kakula, since it has similar tonnage and grade, but is entirely open pit. This would be the crown jewel of any major's operations. And they sold cheap to the Chinese. $1.14 billion for Lundin's 24%, and Freeport it's 56% stake China Moly for $2.65 billion. They would have made huge profits for decades, even at $2 copper. Freeport says they were paying down their debt, and Lundin didn't say anything, they just walked. I don't believe Freeport's explanation. They have to provide some kind of explanation without burning bridges. The Congolese government is under no obligation to approve the sale. They could have forced Freeport/Lundin to develop the property, or risk losing the asset entirely. As it is both companies must pay a sizeable penalty just to exit the Congo, and hand it over to the Chinese. This is a tough place to do business. That doesn't mean IVN, with their 39.6% stake can't make a go of it. After all taxes IVN will take home just under 25% of the profits. Unless the new valuations for concentrate announced recently trim profits further.
The fact is Chinese State miners enjoy a competitive trade advantage that Western companies can't match. So, to compare a company like IVN to Zijin or Jiangxi is misleading. Both companies have private shareholders, yet the government is the largest. IVN is completely accountable to shareholders, while the Chinese miners are mostly accountable to a Communist government.That's not true for all Chinese companies, just those which are State owned.