Early last year,Lou Dingbo, the man having a wealth of experience in the management of largestate-owned enterprises, became the chairman of Pengxin Mining, a privatemining company.

Although it is not very long as a Pengxinperson, Lou Dingbo has witnessed the “changes” of Pengxin Mining in recentyears, including that the main business has gradually achieved the commondevelopment of copper, cobalt and gold compared with single copper resourcespreviously, and the company’s overseas industry territory has spread to severalcontinents from Congo (Kinshasa); most importantly, Pengxin Mining is graduallyapproaching the vision of “leading global provider of integrated resources”.

Lou Dingbo said, “Except for the achievementswe obtained, Pengxin is also creating a large-scale nonferrous tradingplatform, making correct strategic choices and conducting rhythmic mergers andacquisitions, etc., so I think that the company is now on a very healthybusiness road on the whole.”

Therefore, although Pengxin Mining has notbeen able to sign a formal agreement to acquire the Martabe Gold & SilverMine in Indonesia recently, it has no effect on the pace of Pengxin Mining’sprogress. Lou Dingbo told the reporters that we will wait and seize subsequentacquisition opportunities although we have not realized the acquisition for thetime being.

Lou Dingbo said that “the goal of PengxinMining is to create more value for investors while taking into account the fourdimensions of society, users, suppliers and employees, so as to fulfill oursocial responsibilities.”

The cobalt hydroxideproduction line is ready for production

In 2016, Pingxin Mining put forward the corporate vision of transformation to “theleading global provider of integrated resources”. Lou Dingbo, the helm of thecompany, made a detailed analysis of this corporate vision and divided it intofour key points, namely “global”, “resources”, “leading” and “serviceprovider”. 

Among the four key points, “global”comes first. To Lou Dingbo, global is “internationalized”. At present, thestrategic territory of Pengxin Mining has extended from only one country, Congo(Kinshasa), to South Africa and Australia, meanwhile, under the support ofnational strategic layout of “One Belt, One Road” and related policies, it isexpected that Pengxin Mining will continue to develop overseas nonferrousmineral resources and expand the overseas industry territory by following thenational strategy.

In “resources”, Pengxin Mining has developedminority nonferrous metals by revolving around the new energy vehicle outletsin recent years based on the original copper materials, and such developmentincludes the “acquisition” of the scarce resources of cobalt.

“Because we all know that cobaltis a kind of scarce resources in China, and nearly two-thirds of the world’scobalt resources are in Congo (Kinshasa), so Congo (Kinshasa) has its specialadvantage in resources”, Lou Dingbo said, “Pengxin has taken roots in Congo(Kinshasa) for ten years, so we enjoy the condition and could enter the fieldof cobalt quickly”.

At present, Pengxin’s cobalt hydroxideproduction line with an annual output of 7,000 tons of cobalt metal quantity atCongo (Kinshasa) Shituru Mining is in the construction stage of main part,wherein the first-stage construction (3,000 tons of cobalt metal quantity/year)is expected to be completed by September 30^th this year, and thencarried out trial production in October, and reached design capacity inDecember this year. “The production capacity of the second stage will beavailable as well by the time of the fourth quarter of next year, and then ascale of 7,000 tons of metal cobalt will be formed, and such scale will accountfor about 7% of the market share in the world and will contribute to thesustainable profitability of the company in the future”.

On the other hand, Pengxin Mining has alsoacquired the ORKNEY GOLD MINE in South Africa and set foot into gold mining andsales business. Lou Dingbo said that “As regards entering into gold products,our primary concern is that gold is a kind of nonferrous metal with highfinancial attributes, and at the meantime, gold is the key reserve of thecentral banks of many countries, it is a kind of strategic resources. ForPengxin, gold products are the ballast to boosting the company to grow biggerand stronger in the process of development, so we have acquired ORKNEY GOLDMINE in South Africa from the controlling shareholders”.

Now ORKNEY GOLD MINE hasentered a normalization stage of production, and No. 7 mine of ORKNEY GOLD MINEhas produced ore successfully on June 29^th this year, and Lou Dingbotold the reporters that “our subsequent plan is several tens of tons per day,it should be said that the production efficiency of ORKNEY GOLD MINE haveexceeded the expectations of our board of directors, and gold, as a new productof the company, will become a new growth point for the company”.

In addition, Pengxin Mining has signed a25-year lease development agreement with Congo (Kinshasa) Gecaminies on PE1078copper-cobalt mine, and also signed a comprehensive underwriting agreement withVICENT Mining, a local company in Congo (Kinshasa) so far in order to strengthenthe strategic reserve of resources. Moreover, Pengxin has subscribed 16.17% ofthe shares of Clean TeQ, an Australian listed company, through capitalincrease, so as to make the layout of new-developing minerals such as nickeland cobalt, etc. that are related to the new energy industry.

Lou Dingbo also revealed that the company will keep on enriching the variety ofnonferrous resources in the future. “Of course, our enrichment is not blind, itis the expansion and development completely adapted to the market and thedownstream demand growth in the future, especially to meet the demand of theChinese market, and closely integrated with and conducted along the nationalstrategy”.

Except for the two key points mentioned hereinbefore,how to achieve “leading” also requires the consideration of Pengxin Mining. ToLou Dingbo, “leading” means that the products of the company must be in linewith the international standards. The company has to achieve the shortestdelivery time among resources suppliers while ensuring the quality ofresources, for example, we agree to deliver the goods in 90 days, but we canmake the delivery in 60 days, this would be extremely popular with thedownstream customers.

Asregards “service provider”, it is the overall positioning of Pengxin Mining. “Wewould like to serve downstream customers, serve the Chinese market, and servethose government agencies in the countries where our industries are located,etc.”.

Through years of precipitation, Pengxin Miningis gradually approaching the vision of “leading global provider of integratedresources” through its down-to-earth development under the leadership of LouDingbo.

The number ofSMCO local staff has achieved a fivefold increase in seven years

In fact, Pengxin Mining has continuouslyfulfilled its positioning as a “service provider” and persistently served thelocal residents and local communities, as well as practiced its socialresponsibilities in the process of deep ploughing of the overseas market.

In March of this year, Lou Dingbo made a visitto Congo (Kinshasa), and he had a high fever after returning home because hewas bitten by the local mosquitoes, so Lou Dingbo knew the pains suffered bythe local people of Congo (Kinshasa) due to malaria and other diseases. But heis gratified and proud that the company has started offering free medicine tothe residents of the surrounding communities at a regular basis soon afterPengxin Mining took over the Shituru Mining.

In addition, Pengxin Mining will provideeducational resources for local schools in Congo (Kinshasa) and repair theroads and bridges for the villagers around the factory, etc. in each quarter,meanwhile, it will also send bread and rice to the residents near the factoryduring the Chinese New Year or festivals. All of these would not only reflectthe undertaking of Pengxin Mining as an enterprise for its socialresponsibility, but also establish a good international image for Chineseenterprises in Africa.

Pengxin Mining has continuedto provide employment opportunities for local residents and greatly improvedthe local employment environment during the years of rooting overseas inaddition to its continuous and positive contribution to the public welfareundertakings.   

According to the Social Responsibility Report for 2017 releasedby Pengxin Mining, Pengxin has provided 1307 vacancies to the society in 2017,showing an increase of more than 33% year on year; at the meantime, Congo(Kinshasa)Shituru Mining Corporation SMCO, theholding subsidiary of Pengxin Mining, has continued to increase theopportunities of employment for Congo (Kinshasa), and there have been 709Congolese employees worked in Pengxin Mining SMCO in 2017, a fivefold increasecompared with that of 2010.

“The local residents are very proud to be ouremployees”, Lou Dingbo said proudly, “because they can support more than tenpeople in the whole family, besides, they can get certain medical insurance, sothey greatly cherish us”.

What is more commendableis that the development of Pengxin Mining’s overseas industrial resources hasfully respected the opinions of local people, and such kind of benigninteraction has moved the local people so much.

After taking control ofORKNEY GOLD MINE in South Africa, the first thing Pengxin Mining managementteam need to do is organize local employees to make a dialogue between thesenior management team and the employees. The content of the dialogue is askinglocal employees to collect suggestions on the future development of the plantfrom the surrounding communities.

Lou Dingbo said that ORKNEY GOLD MINE wasabout to resume production at that time, so we collected suggestions orrequirements from families and friends of local employees, and the surroundingcommunities about the upcoming production resumption of ORKNEY GOLD MINE, “thework has won a high acclaim from all employees, then the second step is toannounce the resumption of production plan, and the subsequent cooperationexceeds our expectations”.

Local residents who come for employment at the entrance ofORKNEY GOLD MINE

Reporters learned that there are a largenumber of local residents gathered at the entrance of the mine every morning toapply for their jobs after the announcement of the resumption of production ofORKNEY GOLD MINE. The scene greatly moved the management team of PengxinMining, “Because the social responsibility we showed makes them feel that weare a humane company, we treat local employees and the communities in whichthey live with sincerity, and they respect the management team of the companyas well”.

Grasping the rhythm ofcounter-cyclical mergers and acquisitions

In 2017, Pengxin Mining has realized anoperating income of RMB6.056 billion Yuan, an increase of 136.57% year on year;net profit attributable to shareholders of listed companies of RMB 301 millionYuan, an increase of 484.99% year on year, and such outstanding performance hasfully reflected the preliminary results of the strategy “industry +finance” and“investment + mergers and acquisitions” of Pengxin Mining.

Based on the abovementionedstrategy, on the one hand, Pengxin Mining will continue following the guidanceof the national strategy to merge and acquire mineral resources with bettereconomic benefits. Of course, not all “go global” mergers and acquisitions ofenterprises are profitable, but Pengxin Mining has attached great importance tothe pace of mergers and acquisitions.

Lou Dingbo said that “Pengxin Mining’s M&Astrategy adopts counter-cyclical overseas mergers and acquisitions, i.e. thetime when the price of bulk nonferrous products is adjusted downwards is justthe time for us to take actions, when the price of bulk nonferrous products isat a high level, it is the opportunity for us to add values to the assets wegained previously.”

Lou Dingbo likens the pace of mergers andacquisitions of Pengxin Mining to playing the piano. If the beat is correct, itwill play beautiful melody, but if the beat is chaotic, problems will break outat a critical point.

While on the other hand,Pengxin Mining has also creating a large-scale nonferrous trading platformbased on the development and mergers & acquisitions of mineral resources.

 At present, PengxinMining has carried out domestic trade of nonferrous metals and noble metals,such as copper, nickel and silver, etc. with many domestic large and medium-sizedtrading companies, and conducted international trade of nonferrous metals witha number of international trading companies as well; moreover, Pengxin Mininghas also established Pengxin Congo (Kinshasa) Cobalt Ore Trading Center inLikasi, Congo (Kinshasa) in the fourth quarter last year, so as to vigorouslycreate the largest cobalt ore trading platform in Congo (Kinshasa) and locatenew profit mounting up points through cobalt ore trading, warehousing,logistics, mining contracting and development. 

Lou Dingbo revealed that with the constructionof the cobalt ore trading platform, it is expected to bring a rapid growth intrade volume in addition to the profits and cash flows brought to the company.

  “We  hope we will achieve the goal of becoming a leading global provider ofintegrated resources as early as possible and create the greatest value for ourinvestors through our efforts, and all Pengxin people are making efforts toachieve this goal” Lou Dingbo said.