中國礦業(yè)投資政策與機會(中國投資峰會)分析

www.EmpireCPolicyandOpportunity

-ChinaMiningandmetalsindustry

RoyPenn,Ph.D,CIO

EmpireCapitalManagement

Oct.20th,2011www.EmpireCPolicyandOpportunityGovernmentpolicyupdatesandexpectationsonthefutureindustryregulations；EvaluationofChina’slongtermresourceacquisitionstrategy;CurrentstatusofChineseoutboundinvestmentdealsandacquisitionsThe

efficientwaytoinvestinChina’sdomesticminingmarket;ThenewwaytoinvestinglobalminingmarketwithChinacompanieswww.EmpireCGovernmentpolicyupdatesandexpectationsonthefutureindustryregulationsIndustryintegration(M&A),especiallycoalindustryandrareearthindustryNaturalresourcestaxcollectionmethodchangesfromtheamountleviedtoAdvalorem(basedonmarketprice).SPRCstrategicreservesmanagement(China’scopperinventorieswere1.9millionmetrictonsattheendof2010)www.EmpireCEvaluationofChina’slongtermresourceacquisitionstrategyFromimportcommoditiestobuymineequityFrombuymineequitytostartjointventuretomineandimportDiversificationfromtraditionalareastoAfricaandCentralAsiawww.EmpireCCurrentstatusofChineseoutboundinvestmentdealsandacquisitionsDuringlast10years,Chinacost50blnUSDtobuy370mines.CICisgoingtoinvestaboutUSD300millioninaMongolianironoremine.MongonliaTTcokingcoalmine(1.8blntons,40%share)byShenhuaGroup.Chileironmine(76%share)byaGuangdongcompany.AustraliaRMLsold$800millionpriceofitsAfricancoalprojectandthecompany's40%sharetoaWuhanCompany.www.EmpireCOpportunitiesinChinadomesticmineindustryLiquiditycontrol

byPBoCpushesminersseekcapitalfrombankloantoPEfund.ResourcesintegrationpolicyaddsM&Aopportunityintheindustry,especiallycoalminers.HigheroilpricemakescoalwhichChinahashugereservesbeaneconomicalsubstitute.www.EmpireCThe

efficientwaytoinvestinChina’sdomesticminingmarket

ThetraditionalwayisforeigninvestoracquiresamineinChina,includingthroughJV,andwaitsfortime-consuminggovernmentpermission.NowhecanjoinaChinabasedPEfundasaqualifiedforeignlimitedpartner(QFLP).Atpresent,theQFLPquotaisonly6blnUSD,ofwhichEmpireCapital(EmpireMineFund)has1blnUSD.www.EmpireCThenewwaytoinvestinglobalminingmarketwithChinacompaniesThetraditionalwayisforeigninvestorbuyamineoutsideofChinawithaChina’scompanyatthesametimeandthesameprice.NowhecanuseasmallamountofcapitaltoinjecttheminerandmaketheminemorematureforChina’sState-owedcompanies,includingCIC,tobuyatahigherprice.China’sState-owedcompaniescanaskpolicybankstogiveleverageloantoclosethedeal.www.EmpireCWhoisEmpireCapital?EmpireCapitalManagementLLPisaglobalassetmanagementcompanywiththreemajorbusinesslines:hedgefund,privateequityfund(PE)andinvestmentconsulting.

Dr.RoyPenn(PengJunming)isthefoundingpartnerandChiefInvestmentOfficerofEmpireCapital.Withalmost10yearsofinvestmentexperiencesintwoofthemostprestigiousinvestmentinstitutionsinChina:StateAdministrationofForeignExchange(SAFE)andChinaInvestmentCorporation(CIC),Dr.Pennisreadytousehisexperiencesandskillstohelpmoreinvestorstoachievetheirfinancialgoals.Dr.Penn’sstrongtrackrecordhasprovenhisabilityofmaintainingapositivereturnunderdownsidemarketenvironments.In2008,attheworstmomentsofthefinancialcrisis,manytop-tierinvestmentcompaniessufferedunprecedentedhugelosses.Atthattime,Dr.Pennwasmanaginga$40billionSAFEportfolioinNewYork.ThankstoDr.Penn’sexceptionalknowledge,experience,andaccuratejudgment,theportfolioachievedamorethan10%positivereturnin2008.www.EmpireCDr.PennandProf.Chen,hisadvisorRoyPenn(PengJunming)CIO,EmpireCapitalManagementSeniorEconomist,XinhuaNewsAgencySeniorFellow,CenterforChinaForeignStrategy,RenminUniversityofChinaFormerCICandSAFEofficialwitharound9yearsglobalmarketexperience.Prof.ChenXuemingChiefGeologist,EmpireCapitalManagementProfess