Sail across the sea

Chapter 401 is exactly what it sounds like.

"You spend over 300 million to research a single technology?"

Yu Zhiping looked at Pei Hengxue and asked suspiciously.

Pei Hengxue's eyes revealed a calm demeanor: "Director Yu may not know, but the process we developed is the first of its kind in the world. To evaluate the leaching effect, we need to repeatedly take samples from various locations on the mountain for analysis. The reagents used for analysis are all imported, and each sample analysis costs several hundred yuan."

"It was only by our engineers working hard to save money that we managed to keep the budget down to just over 300 million. If we had followed the research methods used by foreigners, even 300 million US dollars might not have been enough."

"This..." Yu Zhiping didn't know what to say.

He had worked in geology for a few days as the director of the Bureau of Geology and Mineral Resources, but he had no academic foundation whatsoever and couldn't distinguish whether what Pei Hengxue said was true or false.

Based on his past experience dealing with Pei Hengxue, he knew that Pei Hengxue was a very meticulous person who wouldn't easily lie. Could it be that Zeyan Institute really went to great lengths to develop this new technology?

At this moment, Pei Hengxue sighed inwardly:
Alas, his reputation is ruined in his later years.

I must have lost my mind. How could I have listened to Gao Fan's few words and started spouting nonsense along with him? What 300 million yuan investment? We only spent 60 yuan at most, and 30 yuan of that was for leasing the mine.

However, I'm not entirely exaggerating. Following strict scientific research standards, we do need to take soil samples daily for analysis to complete the evaluation of the entire process cycle. Spending 300 million isn't really that much. And it's not finished yet, is it?
"Director Pei, even if you have invested more than 300 million yuan in the early stage, this investment cannot be made by our Gu'nan County alone, right? There are more than ten counties in Zeshan that produce rare earth, as well as neighboring Shizhou Province and Chibei Province. If you add them all up, there are at least dozens of counties that are involved in rare earth production."

“Once you develop this technology, they can also use it. With an investment of over 300 million yuan, each county would only receive 10 yuan. But based on your current charging standards, you could receive at least 30 yuan in technical service fees just in our Gunan County, and that's just one year's income.”

Shang Weimin spoke up.

Like Yu Zhiping, he couldn't tell whether Pei Hengxue's words were true or false. Since it wasn't the time to argue about this issue, he simply changed his perspective.

Pei Hengxue chuckled and said, "Director Shang, don't just look at how much money we've made. You should also think about how much money we can generate for Gunan County. If you knew that number, you definitely wouldn't care about the pittance we earned."

"Director Pei, are you saying that your new technology will allow those mine owners to make more money?" Shang Weimin asked.

Pei Hengxue said, "To put it this way, when our Zeyan Institute contracted that mine from the Youtang Township government, the agreed contract fee was 30 yuan. Now we have decided to raise the contract fee to 60 yuan."

"What!" Zhong Jiangang's eyes widened in disbelief. "Director Pei, what do you mean?"

"That's what it means literally."

Pei Hengxue appeared calm and collected, but his heart was bleeding.

Damn it, I just gave away 30 yuan for nothing, what did I get out of it?

That little kid kept saying that you can't catch a wolf without risking your cub, but I've never even seen what a wolf looks like.

“I don’t understand,” Zhong Jiangang said. He looked at his two subordinates and asked, “Did you understand what Director Pei meant?”

Shang Weimin and Yu Zhiping both shook their heads, indicating they didn't understand what Pei Hengxue was thinking or what conspiracy he was plotting. Pei Hengxue said, "To be honest, we have conducted a serious evaluation of this demonstration mine in Youtang. Conservatively, we estimate that this mine can be mined for 10 years, producing no less than 150 tons of rare earth oxides, which, at current prices, would generate a value of 350 million."

"Based on our production process, the production cost over these 10 years will not exceed 200 million. We will pay a contract fee of 60, and ultimately still have a profit of no less than 90."

"There are actually so many!"

The three officials from Gunan County were shocked.

Everyone knows that mining can be profitable. These government officials can't directly contract mines, but they'll more or less use a relative's name to get a stake in a mine and receive some dividends.

When Pei Hengxue approached Zhong Jiangang, saying that the Zeyan Institute wanted to lease a mountain for industrial testing of a new technology, Zhong agreed and wrote a note to the township officials of Youtang Township. He also instructed them that the lease fee should be based on a uniform standard, without giving the Zeyan Institute any special treatment or asking for exorbitant fees.

In Zhong Jiangang's mind, the Zeyan Institute was probably using the guise of conducting industrial experiments to engage in some tertiary industries to earn some extra money in order to provide some benefits for the institute's employees. According to the mining experience in Gunan, a small hill could earn three to four hundred thousand yuan after five or six years of mining, averaging fifty to sixty thousand yuan per year. For a unit like the Zeyan Institute with four or five hundred employees, this was just a small supplement.

He never expected that Zeyan Institute would actually develop a new process, claiming that it could earn a gross profit of 150 million yuan on a small hill. If calculated according to the originally agreed contract fee, Zeyan Institute's net profit would be 120 million yuan, which is no small sum.

Of course, what surprised him even more was that Zeyan Institute felt that making too much money was a bit too much to handle, so they took the initiative to ask for the contract fee to be increased to 60.

"So that's it..."

Shang Weimin understood as well. He pondered it for a moment, then suddenly thought of something else:

"According to Director Pei, those mines that adopted your new technology can also achieve such high profits?"

“That’s exactly right,” Pei Hengxue said.

"So……"

Shang Weimin turned to Zhong Jiangang, as if he had figured something out, but he waited for Zhong Jiangang to speak first.

“If that’s the case, then the county’s original contract fee standards will have to be revised,” Zhong Jiangang said in a deep voice.

"Change it? How do I change it?" Yu Zhiping was a little slow to react and still didn't understand what was going on.

Shang Weimin said, "Old Yu, didn't you hear what Director Pei said? They originally contracted the mine for a fee of 30. But after adopting their new technology, their gross profit can reach more than 150 million. At this point, it would be unreasonable to still charge a contract fee of 30."

"The county's consistent principle in developing mineral resources is to ensure the interests of the state, the collective, and individuals. In the past, if a mine could generate a gross profit of 60 yuan, the state would take 30 yuan in contract fees, and the mine owner would receive 30 yuan in profit. This was reasonable."

“Now the gross profit has become 150 million. If the contract fee is still 30, the individual can get 120 million. Isn’t the income of the country and the collective too small?”

(End of this chapter)