With the launch of a series of state-owned enterprise acquisitions of overseas mines—such as Chinalco’s acquisition of Rio Tinto shares and China Minmetals’ purchase of the OZ mine—private capital has also begun to join the rush to explore and develop foreign mineral resources. For example, Zhongjin Lingnan (000060) acquired a 50.1% stake in PEM Company, while Hualing Steel (000932) purchased 500 million new shares in FMG, the world’s third-largest mining company. Clearly, Chinese enterprises’ enthusiasm for investing in mining projects continues to grow unabated. At the Third China Mining Investment and Financing Summit held on May 25, 2009, China’s first-ever mining investment fund—the China United Fund—was officially established. This private equity fund has a fundraising target of 10 billion yuan; currently, the initial seed funding of 500 million yuan has been secured, and the fund has already begun making investments in various projects. The establishment and operation of this fund undoubtedly represent a significant boost and support for mining investments.

　　According to data provided by Dealogic, currently, the primary sector for cross-border acquisitions by Chinese companies is natural resources, accounting for 97% of the total acquisition value across all sectors. At the same time, capital flows are highly concentrated, with acquisitions in Australia accounting for as much as 90% of the total amount. Among the numerous acquisition deals, the role of private enterprises is steadily increasing. On June 2, Shanshan Co., Ltd. (600884), China's largest supplier of lithium-ion batteries, announced that it had signed a framework cooperation agreement with Australia's Heron Company regarding the Yerilla nickel-cobalt mine project, aimed at meeting the company's demand for nickel and cobalt. Under the agreement between Shanshan Co., Ltd. and Heron, the two parties will jointly build a plant in Australia and process the ore into nickel-cobalt concentrates. Initially, Shanshan Co., Ltd. will independently invest in the construction of the plant and associated infrastructure, holding a 70% stake in the joint venture. Once the plant is completed, operationalized, and meets regulatory standards, the two parties will jointly manage and operate the project. Heron will contribute all mining rights to the Yerilla nickel-cobalt mine, receiving a 30% stake in the joint venture. As China's leading and the world's third-largest supplier of lithium-ion batteries, Shanshan Co., Ltd. has significant demand for nickel and cobalt. This investment in Australian mines represents a concrete manifestation of its strategy to expand and integrate its industrial chain.

　　Previously, led by Shagang Group—the largest privately-owned steel company in China—along with more than ten other sizable private steel enterprises including Guofeng Steel and Delong Steel, a consortium of private steel companies had planned to establish a joint venture overseas to acquire mineral resources and invest in mining projects. However, due to approval issues, the plan ultimately fell through. Despite this setback, Shagang has not given up its efforts to explore overseas mineral resources. Shen Wenrong, Chairman of Shagang Group, traveled personally to Australia and signed an acquisition agreement with a local publicly listed company, securing the mining rights to an iron ore deposit with reserves estimated at 800 million tons. Currently, Shagang’s overseas investment projects involving mineral resources include the Wheellala project in Australia and the Granger Resources project in Australia.

　　In addition, Owen, CEO of Zhi Fu Energy, stated that the company will enter the gold production sector by acquiring projects surrounding the Martabe project, as well as other projects in Indonesia and mineral resources in Australia. The company is currently also keeping an eye on projects in Asian countries such as Cambodia and Thailand.

　　The path to “going global” is far from smooth sailing. Recently introduced revitalization plans have encouraged strong enterprises to venture overseas and acquire strategic resources. However, the enterprises that fall within the scope of this encouragement are almost exclusively large state-owned enterprises and major local state-owned enterprises—private enterprises are conspicuously few in number. At present, the capital required for acquiring overseas resources is beyond the reach of most companies; even large state-owned enterprises typically need bank support. “It’s one thing if you’re buying iron ore, but when it comes to investing in mines—where sums often run into tens of billions—it’s simply impossible for private enterprises to shoulder such costs without bank backing,” said Geng Bingxi, Executive Deputy Secretary-General of the Metallurgical Chamber of Commerce under the China Association of Private Enterprises. It is precisely because of these challenges in mining investment and development that the China United Fund has emerged, offering a measure of relief to enterprises facing difficulties in overseas mineral exploration.

　　Zheng Zhi, Chairman of the China United Fund, stated, “Going forward, the fund will focus on investing in mergers and acquisitions of high-quality mining resources both domestically and internationally, as well as in publicly listed mining holding companies with significant growth potential in the capital markets. We will also work closely with local partners to carry out activities such as resource integration, project matching, pre-IPO investments, credit guarantees, and short-term lending.”