According to Andrew Cole, West African Mining Company's review of its acquisition of OZ Mining is currently stuck on one issue.
That is, among the minerals owned by OZ Mining, there is a copper-gold mine called Prominent Hill, which is located in the military testing area of South Australia. Therefore, the Australian side has conducted extremely strict review of the acquisition of this asset.
After all, the West African Mining Company is not a company of Australia's "ally" Britain, but is registered in Kolo, West Africa, and its headquarters is also there...
Although Colo has become an observer of the Commonwealth and is negotiating with the Commonwealth to join it, in this not-so-close relationship, they still need to review issues involving Australia's military sensitivities.
In this regard, Andrew Cole's suggestion is to remove the Prominent Hill copper-gold mine, which involves sensitive issues, from the acquisition list of OZ Mining by West African Mining Company - and sell it to other companies. But the problem is that in this case, the acquisition price given by the other party may not be very "fair".
In addition, we will continue to negotiate with Australia on resolving this issue...
The key is that it is not convenient for Barron to be directly involved in this matter now. If he can directly state that this is his own company, then the problem will not exist - after all, the nominal monarch of Australia is still Her Majesty the Queen, and she has a direct "father and son" relationship with Britain. This is not a problem at all when it comes to matters involving the military test area.
The problem now is that although Kolo's negotiations with the Commonwealth will soon come to a conclusion and they will establish a partnership with Australia later, they now hope to complete this acquisition in the shortest possible time.
Many problems do not arise without reason.
It can be imagined that Australia's strict review of the Prominent Hill copper-gold mine this time may involve the involvement of mining giants such as BHP Billiton or Rio Tinto - they certainly do not want new large mining companies to appear in Australia, and if the situation of OZ Mining continues to deteriorate, they also hope to be able to acquire its assets at a low price.
"I will discuss the matter of the Prominent Hill copper and gold mine with Earl Ian Bute. I believe it will be resolved soon."
Barron planned to find another way to get around the scrutiny.
The Bute family owns the Stuart Mining Group, which not only has close cooperation with the West African mining industry in Colo, but has also been operating in Australia for many years. Although it cannot be compared with BHP Billiton and Rio Tinto in scale, with the support of Britain, Australia's "biological father", there will be no problem for them to take over the Prominent Hill copper and gold mine.
Barron can give up a small amount of interests and let Stuart Mining Group take over the Prominent Hill copper-gold mine first, and even allow them to mine for a period of time. When conditions permit, West African Mining will buy back the mine.
This will successfully bypass Australia's review of the Prominent Hill copper-gold mine.
The main reason why West African Mining Company hopes to complete the acquisition as soon as possible is because they own the mining rights to the Carrpateena mining area.
The Karapatina mining area is 130 kilometers away from Port Augusta in South Australia. Last year, possible copper-gold associated minerals were discovered here, so it was bought by OZ Mining Company.
However, for the time being, it is only regarded as their reserve mining area, and no more detailed exploration has been carried out.
It was not until several years later in the original time and space that OZ Mining began further exploration of the Karapatina mining area after it sold all its assets except the Prominent Hill copper-gold mine and the Karapatina mining area.
At that time, a surprising discovery was finally made.
According to their exploration results, the mineral combination of the Karapatina mining area is copper-gold-iron ore-uranium type, which belongs to the IOCG type deposit. At that time, the proven controllable ore volume was 1 billion tons, including 6.4 million tons of copper metal and 210 tons of gold. It was the largest undeveloped copper mine in Australia at that time.
Just this one mining area, even if OZ Mining Company pays a 50% premium to acquire it now, it will be a very rich gain for West African Mining Company.
What's more, before this, the scale of West African mining companies... was almost the same as those private mining companies in China.
The project in Kolo is mainly carried out in cooperation with Stuart Mining Group.
After acquiring OZ Mining, they will be able to obtain a sizable professional ore mining team as a basis to enrich the structure of West African Mining Company.
Speaking of which, OZ Mining Company was also very lucky. In the original time and space, their futures investment department had a big mistake and suffered heavy losses. Then they encountered an economic crisis and were forced to sell most of their assets, leaving only the Prominent Hill copper-gold mine and the Carrapateena mining area. Later, relying on the rich mineral deposits discovered in the Carrapateena mining area, they became the third largest mining giant in Australia.
Some people may wonder why a mining company has a futures investment department.
In fact, many mining companies are involved in futures investment - what they do is futures hedging.
Simply put, if a mining company produces iron ore, they will buy a certain amount of short iron ore futures to counter the fluctuations in iron ore prices.
In this way, if the iron ore price falls, although the iron ore spot they sell will be affected and their profits will decrease, they can be compensated in the short futures; vice versa, if the iron ore price rises, their losses in the short futures will be compensated in the iron ore spot.
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However, the futures investment department of OZ Mining Company made a major mistake. It did not strictly carry out reverse futures hedging according to its own production, and over-played the game, resulting in huge losses.
Barron knew that the prices of raw materials such as iron ore would continue to rise for a long time to come. After acquiring OZ Mining Company, there was no need to retain their futures investment department and they could directly entrust this business to DS Capital.
With the involvement of Stuart Mining Group, the difficulty of West African Mining Company in acquiring OZ Mining Company was immediately solved.
The entire acquisition process was that West African Mining Company acquired OZ Mining Company at a cost of US$1.8 billion; then Stuart Mining Group issued an additional US$600 million worth of shares to West African Mining Company at the average price of the past 30 trading days to acquire the Prominent Hill copper-gold mine project.
After that, West African Mining Company acquired all assets of OZ Mining Company except the Prominent Hill copper-gold mine project; and Stuart Mining Group acquired the Prominent Hill copper-gold mine project.
The current market value of Stuart Mining Group is around US$5.25 billion. After issuing additional shares worth US$600 million to West African Mining Company, West African Mining Company will hold approximately 10.26% of the shares of Stuart Mining Group, becoming the second largest shareholder after the Bout family - the Bout family controls a total of more than 36% of the shares in Stuart Mining Group through several companies.
In addition, it is worth mentioning that the OZ Mining Company of the original time and space, after selling most of its assets, was able to take off again and become the third largest mining giant in Australia. In addition to the surprising discovery in the Karapatina mining area, it was also due to the reforms made by their later CEO to the entire OZ Mining Company.