Those Years When I Was Forced to Top the Forbes List

Chapter 355 A Trillion-Dollar Game
“Rare earth elements can not only be sold, but also used in green automotive energy, annealing processes, the medical field, and even the military industry. These applications of rare earth properties, combined with your titanium alloy industry and special steel manufacturing, can completely break away from your current status of mid-range manufacturing of vanadium-titanium basic products and ordinary steel, and gradually complete the upgrade to high-end products.”

"So, you should be looking for Baogang, not Baosteel."

"This year, Baogang Group's holding subsidiary, Baogang Rare Earth, is undergoing a rare earth industry restructuring, mainly involving the rare earth industry in the north. However, the rare earth industry in the south is still relatively scattered. You should apply to the higher authorities to undertake the research and development tasks of the southern rare earth industry, take the initiative to invest in cooperation with Baogang, establish a technology research and development company, and obtain technical support."

As Chen Xuebing spoke, he became somewhat agitated.

There's an old saying: "If only I had your advantages back then."

Now he has returned to his former self, and he also has the unique advantages of Panzhihua Iron and Steel Group.

Panzhihua Iron and Steel Group (Pangang) is not without rare earth mineral resources. Apart from the Bayan Obo mine, the largest light rare earth deposit in China is located in the Panzhihua-Xichang region. Pangang is practically half-established on rare earth mineral resources.

Although it is a relatively rare light rare earth element, it has already laid the groundwork for Panzhihua Iron and Steel Group to research rare earth extraction technology.

Moreover, of the six major rare earth groups that emerged later, only Xiamen Rare Earth and Baotou Steel Rare Earth (i.e., Northern Rare Earth) are present; the other four have not yet been established.

Pangang Group's backing as a central state-owned enterprise means they are qualified to enter strategic fields like rare earths.

The fact that its subsidiary, Panzhihua Iron & Steel Vanadium, is a listed company gives him room to intervene. The steel and vanadium also need to be integrated into all the major production capacity of Panzhihua Iron & Steel Group, which involves a whole restructuring process. This process can maximize the strength of Gu'an.

This is what is meant by being born with exceptional advantages.

Non-ferrous metals.

With Panzhihua Iron and Steel Group becoming a core group in the non-ferrous metals industry, its value is at least hundreds of billions of yuan, and it has countless hidden resources. Whether Panzhihua Iron and Steel Group is incorporated into the rare earth group or continues to develop independently, this investment will be very worthwhile.

Although helping Panzhihua Iron and Steel Group will be more complicated, in this era, businesses that have reached the level of tens of billions can no longer rely solely on simple operations such as buying low and selling high to maintain development. They must utilize all favorable conditions to gradually expand their influence over high-end resources and enhance their own potential.

"Rare earth, Baogang," Yu Zisu recalled.

After a long pause, he shook his head, seemingly somewhat regretful, and said:

"Rare earth prices are much higher now, so it's probably difficult to get Baogang to come up with advanced rare earth refining technology."

“In fact, the rare earth elements that have been discovered in our vanadium-titanium mine include scandium, gallium, cadmium, rhenium, and indium. Among them, the reserves of scandium are particularly outstanding, with 25 tons and a relatively high grade. It also contains 18 tons of gallium and 5.5 tons of rhenium.”

“We just didn’t take these byproducts seriously before. How much did rare earth cost back then? A few thousand US dollars per ton, and the quantity was small. As a state-owned enterprise, we had to pay attention to environmental issues when mining, and we also had to protect our main minerals. You know our vanadium-titanium mines. Vanadium reserves account for 11.6% of the world’s reserves, and titanium reserves account for 35.2% of the world’s reserves! The safety of the main mines is very important! So we didn’t deliberately mine rare earths, nor did we stockpile them. Even if we mined some, we sold them all.”

"Our smelting technology, particularly regarding rare earths, focuses on the synergistic extraction of rare earths with iron, vanadium, and titanium, as well as the application of rare earths in steel. We emphasize rare earth microalloying rather than the smelting and separation of rare earths."

"However, Xu Guangxian's technology was promoted free of charge back then, and the rare earth technology was spreading. The industry threshold was relatively low. Many companies were engaged in rare earth purification back then. We know a few companies that survived and had decent technology. If there is a real opportunity in rare earths, we can make acquisitions."

Chen Xuebing listened with a smile and nodded.

correct.

This is the meaning of time.

A few years later, the government began to consolidate the industry to prevent technology leakage. Hundreds of rare earth companies were consolidated into six major rare earth groups, leaving no room for Panzhihua Iron and Steel Group to acquire them.

"Rare earths don't just offer opportunities, they definitely represent a huge future opportunity! And you also have gallium mines! You know gallium nitride, right? It has extremely high power density, extremely high melting point, and extremely high thermal conductivity! Our gallium nitride phased array radar has already reached the third generation in public reports. Radar is the eye of a missile! Electronic warfare and the slogan of informationized forces have been chanted for six years since Kosovo. Do you think these rare earth application technologies are far from large-scale deployment? The global arms race cannot be separated from rare earths!"

"In addition, we have discovered a great deal of use for rare earths in new materials for electronic consumer electronics. In just a few years, our new energy and new materials will move towards high-end applications. Steel is the guarantee for infrastructure, and rare earths are the guarantee for high technology."

"Early entry and early research and development mean that 1+1 is greater than 2. If we can develop some high-tech applications and high-end refining technologies, we will not only develop the company, but also be a hero of the country."

"Once this positioning is clear, even if Panzhihua Iron and Steel Group is still not big enough, who can merge with it?"

"Moreover, with my market-oriented methods to help you, you won't be small in scale either."

Chen Xuebing finally emphasized his role.

I can't help it, the more I talk about it, the more I crave it, my mouth is practically watering.

Without Panzhihua Iron and Steel Group, he could only watch helplessly as the rare earth industry developed.

Securing rare earth technology support is like buying a ticket for a semi-trailer truck – it guarantees you won't fall behind, even if you can't get on board. It's not just about getting on the truck itself.

As for why he knew?
Although he didn't know the specifics of how to use it, how could he not know which sectors of the stock market in later generations were deeply linked to rare earths?
In addition, the development of the defense industry is what he cares about most outside of business.

How assertive he can be in the future depends on how far the Dongfeng missiles can accurately cover.

Yu Zisu's mind was racing as he summarized all the conditions that Panzhihua Iron and Steel Group had in favor of developing rare earth.

The rare earth mines in Xishan Yak Meadow were the biggest reason that attracted him.

The leadership of Panzhihua Iron and Steel Group definitely wants to take a gamble, and rare earth elements are indeed a promising direction, but…

"Mr. Chen, there are a few difficulties with this matter."

"Firstly, this year we need to acquire iron ore through long-term contracts with international mining companies via the China Iron and Steel Association (CISA). Increasing our supply privately would be detrimental to unity, and stockpiling large quantities of iron ore incurs stockpiling costs. If iron ore prices fall instead of rising in the future, we will not only suffer losses, but also damage our relationship with CISA."

"The China Iron and Steel Association asks you questions, and you just push the blame onto me." Chen Xuebing said bluntly, "You increase steel production by 20% after the third quarter, and purchase the imported ore needed for the whole year in advance according to my plan. In return, I will privately purchase 300 million yuan worth of steel and vanadium shares and sign a performance-based agreement with you. The current landed price of iron ore is around 600 yuan per ton, right? If the average landed price of iron ore in the fourth quarter is less than 720 yuan, my private shares will be transferred to Panzhihua Iron and Steel Group free of charge to make up for your losses. However, we will intervene in the production review to ensure that there are no problems with your production and sales management. If you operate according to our plan and the final annual profit reaches 3 billion yuan, you will acquire my special steel plant next year at a fair market price."

Yu Zisu's eyes gradually brightened.

To dare sign such a performance-based agreement, it seems Mr. Chen is truly confident.

"Mr. Chen, thank you so much! However, we need to buy billions of iron ore and increase production, so isn't 300 million a bit too little for the bet?"

Chen Xuebing grinned: "We can't do any more. Changzheng and my personal shares are easily judged as acting in concert. If we buy another 300 million, we'll be right on the threshold for disclosure. Besides, if we buy 300 million now, it might be worth 1 billion or 800 million by the end of the year. I'm helping you guys, and I've already minimized the risk for you. Aren't you going to take any responsibility yourselves?"

“Okay!” Yu Zisu patted the armrest between the two of them decisively.

If Panzhihua Iron & Steel can really achieve a profit of 30 billion yuan, it will be in a strong position this year! At least until next year, it won't have to face the issue of being merged!
Only a fool wouldn't sign a contract like that!

"That's the second problem. Although we currently hold 65% of the shares in Steel & Vanadium, the share swap between the two listed companies will reduce our shareholding. After selling our shares, the State-owned Assets Supervision and Administration Commission may reject our three-in-one plan."

"Didn't I say the three-in-one plan should be postponed until the stock market is low? If you sell your shares, you can buy them back when the market is low! This way, the shareholding ratio remains unchanged, and the profit from selling and buying is secured, which can be included in next year's non-operating profit statement! Your financial statements will look good for another year! By then, the shareholding will remain unchanged, the profits will be in your hands, and you won't need guarantees to carry out the three-in-one plan on your own. Why worry about the State-owned Assets Supervision and Administration Commission not approving it? Changzheng will assist you in stock market operations! The biggest loophole is that you will squander the money you make! I've said it beforehand, whether it's this year's profits or the profits from selling shares, you must save them and keep them for restructuring!"

Chen Xuebing's voice was somewhat stern, but his plans were truly inspiring.

Equity remains unchanged, profits are recorded, and the three-in-one process is completed independently.

The biggest variable is whether the equity operation is profitable. But in today's market, there is probably no more professional helper than Changzheng. Such a helper with almost no failures is someone they can't hire even if they ask for help normally.

Yu Zisu's voice rose: "I'll call Chairman Fan as soon as I get off the plane! I'm in charge of the operations! I guarantee it! If these two profits are realized, not a single penny will be touched!"

"That's fine then. You guys just wait for the reorganization," Chen Xuebing said confidently.

Yu Zisu pondered for a moment, then said, "However, we'll probably need to hold a workers' representative meeting to discuss the company's transformation with the representatives from each factory. After all, this concerns the future of the company."

Chen Xuebing frowned.

"Pangang has created too much of a burden for itself over the past few decades. Your group has dozens of low-profit and negative-profit enterprises. Separating core and auxiliary businesses is a necessary step. The era of egalitarianism is long gone. Listed companies need to be restructured, and the group's assets also need to be restructured in the same way."

Pangang's 400 billion yuan in assets consist of more than just three listed companies, but also other subsidiaries, welfare institutions, and life services, most of which are inefficient.

"What needs to be stripped away must be stripped away, what needs to be changed must be changed, and you must move forward with a lighter burden. This is the work you must face. Of course, I personally do not agree with a one-size-fits-all approach. We have done a lot of restructuring work in Chongqing and have some experience. If needed, as long as you are willing to pay consulting fees, we will help you."

Chen Xuebing has a certain understanding of future industry cycles and is confident about which sectors should be cut and which should be retained.

"Then we'll have to trouble you, Mr. Chen. We do need a professional organization, but you may face a lot of pressure if you want to help us restructure."

Yu Zisu has a deeper understanding of the companies under Panzhihua Iron and Steel Group. What he needs is not professional judgment, but reasons.

Everyone will have opinions if they cut someone else's hand, and the group will definitely face a lot of criticism. Having a third party's voice will reduce their pressure.

Chen Xuebing nodded in understanding and said he was willing to take the blame and participate deeply in the restructuring of Panzhihua Iron and Steel Group, which would benefit his future influence.

"You guys should hold a group leadership meeting first, set the tone, and once you've confirmed that you need my help, I'll bring people to sign the relevant agreements. As for the subsequent restructuring issues, the State-owned Assets Supervision and Administration Commission wants you to negotiate first. I'll find an entry point and try to connect with the leaders to get their support."

The State-owned Assets Supervision and Administration Commission (SASAC) is not the same as local SASACs. It is a truly powerful department that controls the development of more than a hundred central enterprises and can, to a certain extent, determine their life or death. Not to mention the leaders and deputy leaders, even the section chiefs below them are hard to meet. If Gu'an wants to obtain the status of assisting Panzhihua Iron and Steel Group's reform, it must at least have a direct conversation with the leaders of the Enterprise Reform Bureau and the Planning and Development Bureau under the SASAC.

needs time.

However, the restructuring of Panzhihua Iron and Steel Group is at least a year away, so we can discuss it slowly.

We chatted all the way to the airport.

When I got off the train, I shook hands with Chen Xuebing again, still feeling a bit reluctant to leave.

"President Chen, we will reach a consensus internally as soon as possible and give you a reply. When that time comes, you must come to our group company in person. Secretary Fan and our group's Party Committee will definitely want to hear your professional opinions."

His tone was certain, as if a cooperation agreement had already been reached.

A truly important decision that can be implemented doesn't require much time for consideration. A decision that can be made by the main decision-maker within a short distance of just over 20 kilometers from the Jinjiang Hotel to the airport is one that is beneficial and makes people eager to implement it.

Those collaborations that require lengthy negotiations and constant back and forth often yield insufficient benefits, and most lose their optimal opportunity due to the hesitation of both parties.

Chen Xuebing understands the importance of timing, so in most negotiations he often chooses to personally take charge and quickly offer conditions that meet the other party's psychological threshold, saving time.

"That needs to be done as soon as possible. I should be in Sichuan before the Lunar New Year. I need to go abroad for an investment negotiation during the holiday."

Upon hearing this, Yu Zisu immediately calculated the time.

Today is January 15th, and Lunar New Year's Eve is February 18th.

"It won't take that long! At most a week! Mr. Chen is really busy, not even taking a break during the Chinese New Year? And going abroad too?"

"Hehe, everyone in China is on holiday during the Chinese New Year, but I can't stay idle. Luckily, foreigners are still working, so I can go abroad and have someone keep me company for a few days!"

"Tsk tsk, Mr. Chen's work ethic is no wonder you're so rich!"

Haha, I'll be waiting for your news!

The next day.

Chen Xuebing visited Chengdu Shuangliu Airport again.

However, this time the Mercedes was replaced with a rented business bus, and the parking location was changed to the VIP parking lot.

Two special guests emerged from a VIP passage separate from the terminal building and were transported here by a special car arranged by the airport.

This special service also included independent security checks and check-in assistance, for which Gu An spent over eight thousand dollars.

As Chow Yun-fat, wearing Ray-Ban sunglasses, helped Gong Li, who was dressed in a simple dress and had her hair up, off the bus, Chen Xuebing, standing in front of the bus, smiled with admiration in his eyes.

The aura of the emperor and empress is truly pleasing to the eye.

"Brother Chow, Sister Li, welcome, welcome! I'm your fan!"

(End of this chapter)