[Chapter 588: Not Enough Time to Dig]
Australia is rich in resources and has always been an export-oriented economy. Its labor force is mainly concentrated in the service sector, resulting in very high labor costs. Sometimes, abundant resources are not necessarily a good thing; when making money becomes too easy, there's no room for labor-intensive industries to thrive.
In Australia, clothing and electronics factories aren't considered labor-intensive industries because they hardly exist. What they refer to as labor-intensive industries includes slaughterhouses and steel mills. It's also true for automotive plants, though there aren't that many of them.
This situation has led some to call it a "resource curse." The general idea is that with such plentiful resources, there's a complete loss of innovative capacity. Instead of striving to improve, it turns into a cycle of simply getting by.
The situation in desert regions is quite similar. It's rather unfair when you think about it -- over twenty million people living in a place rich in resources, and they show no real interest in mining.
Recently, Australia discovered a massive iron ore deposit, and White Capital has acquired two major mining companies. The news immediately sent shockwaves through the capital markets.
William White's understanding of BHP is quite superficial. After all, in his previous life, he was just a reckless second-generation rich kid who only knew that the company was formidable and had conned plenty of money out of investors.
With just that knowledge, he decided to make the acquisition. Doing business with the big players is incredibly tough.
Japan is also resource-dependent, and their iron ore isn't enough; they are in the same boat. Now is the most cost-effective time to act -- if he doesn't make a move now, when will he?
"Sir, the banks in Japan have gone crazy; they're eager to lend you money. The fund created by Morgan Stanley was cleared out by them."
"Seriously? I heard they were about to go under!"
"Cough, not quite. Smaller banks are indeed struggling, but conglomerates like Sumitomo and Itochu are still doing well."
"Tch, what is this, a charade? I'm telling you, unless there's an insider, the financial system isn't that easy to crack."
"Hehe, they must be eyeing those resources. I've heard they're also occupying land in Australia. I just wonder if they can actually mine iron ore there."
"Ugh, those fools don't understand a thing. If you unearth any iron ore, it won't even sell for twenty bucks a ton. C'mon, it's not like more is better with this stuff."
"It's not that simple. Our exploration in Christmas Creek was largely by chance. The two Australian companies have already surveyed that area."
William White was of course aware of this; a significant part of that mineral resource belonged Japan. Before his rebirth, the Japanese were vigorously mining that area.
The big players are feeling the crunch now, as they came in late, losing out on many prime spots.
Things are different now; Japan doesn't have that resource. Their steel companies could be in serious trouble.
William White's current dilemma is that there's simply too much iron ore, and the market can't absorb it all. Maybe he should secretly negotiate with Rio Tinto to slow down mining because the more they dig, the lower the prices drop.
The only saving grace is that iron ore isn't coal; it can be left out in the sun without fear of spoiling.
Iron ore is selling way too cheap right now. Although he can't establish an OPEC-like situation, surely they can coordinate production rates?
What? Monopolizing? Price gouging?
Hehe, something like that can be done, but it's best left unsaid. Sometimes, talking isn't even necessary. There are very few who can become big players who are just naive. When everyone else is cutting back, you decide to increase production? Just take a look at Kuwait's fate.
And that's a country we're talking about. As for companies? Rest assured, they'll end up in a situation where there won't even be bones left.
...
"Is this guy planning to control export quantities now?"
"Isn't he expanding the bulk cargo terminal? Shouldn't that mean an increase in exports? Other iron ore giants are feeling the squeeze, and prices are already near the cost line."
Richard Fisher was speechless about this subordinate, believing everything he said. Conspiracy theories are common in investment banks.
Just look at what their announcements say: labor is expensive in Australia, but land resources are relatively cheap. You can't take that literally; the subtext is that labor is too costly, and they want to raise prices. If they can't sell it off, can't they at least stack it up? Cheap land resources essentially imply the same thing.
Hehe, they'll use a significant amount of automated mining and transportation equipment. Goodness, how much will that cost? Is William White a fool?
After shaking his head and sighing, he said, "In the next decade, Asia will have great expansion potential. Do you get what that means?"
"Sir, the economy of Japan has no short-term chance of recovery. I'm a bit perplexed; what other countries can take this much of resources?"
"Sigh, take a closer look later."
Richard Fisher was tired of talking; if Morgan Stanley was full of such fools, his future wouldn't be bright either.
Does that idiot even know how many cars Tesla sells in Asia every year?
A random brand, and it's somehow sold worldwide. Thinking of this year's IPO made him feel overwhelmed.
Investment banks, the most reliable business is underwriting stocks, isn't it? If you don't understand their strategic goals, you'd better hit the hay.
Rio Tinto and Billiton are industry giants; they sure know how to interpret these things. At the very least, prices will definitely not plummet.
With such huge investments, isn't that money coming from the sheep's back? Just wonder if Japan or the big players will foot the bill.
Tsk, how about we get in on this too? I heard the dock workers in Australia are planning to strike, and environmental organizations are causing trouble, claiming it affects sea turtle breeding.
Damn, can you be more ridiculous? Why isn't it affecting lobster breeding? If that were the case, maybe those wealthy folks who love lobster would change their minds. Sea turtles are not exactly consumable.
...
"Damn, I just made an acquisition, and they're already trying to pull one over on me? None of the conditions are acceptable, and if you want to do business, do it; if not, get lost. Those iron ores are just lying there, rusting instead of rotting."
"Okay, sir, if they show weakness this time, they will definitely push further."
"Sigh, it's ridiculous. Their wages are significantly higher than in the U.S. What else could they be complaining about? It's too hot? What a lame excuse; the whole of Australia is hot."
William White ignored the kangaroo outcry; they think they're so smart, but he's just acting like a koala for now. Since it's taking too long to respond, they can do whatever they want.
So what if iron ore can't be shipped out? The dock workers striking is an act of God. Let them sort it out; he hopes they enjoy their new job roles.
*****
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