Having just wrapped up the messy debt situation surrounding the tricky African Tangkriili iron ore project, the resilient Shandong Iron and Steel Group is planning to once again pursue overseas mineral acquisitions—and this time, they’ve chosen Australia as their destination.

　　According to a notice posted on the website of the Ministry of Commerce, Shandong Iron and Steel Group Co., Ltd. has entered into an agreement with an Australian-listed company. IronRoad Company signed value 40 hundred million Australian dollars ( About 180.08 100 million RMB ) Under the agreement, both parties will jointly develop the iron ore project on the Eyre Peninsula in South Australia.

　　The feasibility study report indicates that this project is developable. 25 In addition, the plan also includes the development of a multipurpose deep-sea port and... 148 Kilometer-long highway.

　　 “ Right now, prices of global resource assets are at low levels, making this a good time to buy them relative to other options. 10 On the day, an analyst told a reporter from Jiemian News.

　　 2011-2014 In recent years, the asset-liability ratio of Shandong Iron and Steel Group has been steadily rising, starting from its initial level... 72.45% Rise to 79.46% As of 2014 Year 3 The monthly asset-liability ratio has already reached... 79.75% 。2014 Shandong Iron and Steel Group reported a net loss for the year. 10.41 100 million yuan, with a net loss attributable to owners of the parent company of 23.46 100 million yuan.

　　However, Shandong Iron and Steel, the listed company under the group, has already turned a profit in the second quarter.

　　2015 In the first quarter of the year, Shandong Iron and Steel still reported a loss. 1.89 100 million yuan—the company achieved revenue in the second quarter. 107.32 100 million yuan, net profit attributable to the parent company 1.97 100 million yuan.

　　This is largely attributable to Shandong Iron and Steel’s layoffs and salary cuts since last year. Data shows that Shandong Iron and Steel’s administrative expenses decreased in the first half of the year. 1.01 100 million yuan, of which employee compensation decreased. 35.66% 。

　　However, judging from the financial data in the semiannual report, Shandong Iron and Steel’s profitability remains far from optimistic. The semiannual report shows that the company achieved operating revenue... 230 100 million yuan—yet net profit is merely a paltry amount. 745 10,000 yuan, whereas if we deduct government subsidies... 564 After including amounts of 10,000 yuan and other items affecting current profit or loss, Shandong Iron and Steel’s net profit excluding non-recurring gains and losses amounted to only a mere... 13.6 Ten thousand yuan.

　　Debt is steadily rising, and first-half net profit falls short. 14 Ten thousand yuan, 40 The massive investment of hundreds of millions of Australian dollars still represents a significant expense for Shandong Iron and Steel Group.

　　 “ At the Davos Forum, Xu Shaoshi, Director of China’s National Development and Reform Commission, stated that China has established funds to support international capacity cooperation and is providing financing support as well. ” Analysts say that the steel industry is explicitly mentioned in relevant documents issued by the State Council. 12 One of the key industries in international capacity cooperation—this is good news for Shandong Iron and Steel Group, which is facing financial constraints.

　　Just recently, the private enterprise Chong Group invested heavily. 20 An investment of 100 million yuan has been made in Rizhao Co., Ltd. of Shandong Iron and Steel Group, marking the launch of Shandong Iron and Steel Group’s first mixed-ownership reform project. “ Launching mixed-ownership reform can bring more external capital support to Shandong Iron and Steel. ” Analysts said.

　　 “ Based on past experience, the mining projects that Chinese companies have acquired overseas are generally characterized by low ore grades, substantial investment requirements, and relatively low returns. ” Analysts believe that the iron ore project on the Ail Peninsula will require the construction of a deep-sea port as part of the supporting infrastructure. 148 A railway line spanning several kilometers—yet the project still requires substantial funding and time for infrastructure development. “ If it were of high quality and easy to mine, it would have already been taken over by the three major mining companies. ”

　　 “ The three major mines themselves 2012 Capacity expansion began at the start of the year, so iron ore prices are unlikely to rise significantly in the coming years. ” Analysts believe that the recent capacity expansion by the three major mines is expected to continue influencing the market for six to seven years. Once this investment-induced expansion cycle comes to an end, iron ore supply will ease somewhat, and iron ore prices will then begin to rise. “ There is uncertainty regarding when the Ail Peninsula project will begin mining and what kind of market conditions it will face. ”

　　It is worth noting that there are numerous cases of Chinese companies failing in their overseas mineral investment ventures.

　　Shandong Iron and Steel has previously suffered setbacks in iron ore projects in Africa. Its equity-participated Tangkeli Iron Ore Project once faced a funding crunch among its major shareholders, leading to the mine’s temporary shutdown. As a result, Shandong Iron and Steel was forced to make an additional investment to take over the entire stake and will bear substantial, foreseeable losses.

　　And CITIC Pacific 06 The Western Australia iron ore project, which has been under investment and construction for years, has finally come online after numerous production delays and billions of dollars in overruns. 13 The first shipment will be completed by year-end.

　　 2006 、2007 Year and 2010、2011 Most overseas iron ore acquisition projects undertaken this year are currently operating at a loss. ” Analysts said that when Shandong Iron and Steel acquired the Tangkeli iron ore project, the Platts iron ore price index was... 120 U.S. dollar / tons, whereas now it has fallen to 60 U.S. dollar / Ton. ( The relevant price index data are compiled by Platts Energy Information. Data are collected from miners, steel mills, and steel traders via telephone inquiries and other methods; among them, selections are made... 30-40 Home “ The most active enterprise ” Inquiries are conducted, with the primary basis for valuation being the highest buyer inquiry and the lowest seller quote on that day. The Platts price index also serves as the pricing benchmark for iron ore from the world’s three major mines. )

　　 “ The cost of iron ore from the three major mines to northern ports in Australia generally ranges from... 45 U.S. dollar / Around tons, the port-of-arrival cost of iron ore from Australian sources for domestic Chinese enterprises is... 60 around the U.S. dollar, while the iron ore costs for domestic mining companies are... 80 Above the U.S. dollar. ” Analysts say that, if all goes smoothly, Shandong Iron and Steel’s A’er Peninsula project could secure access to low-cost iron ore resources. From a long-term strategic perspective, this will effectively ensure the resource supply for its Rizhao high-quality steel base. “ However, the underlying market risks, environmental risks, and labor disputes are all difficult to predict. ”