Deep pockets
By Wang Yu (China Daily)Updated: 2006-12-18 11:08
Anglo American has inked a partnership with Shaanxi Coalfield Geological Bureau of Northwest China's Shaanxi Province to develop coal-related products in Yulin.
"For our coal project in Shaanxi, the total investment could hit billions of US dollars, if a feasibility study is positive," the chairman says.
But as to what specific product the joint entity is to make and who will be its potential customers and partners, Moody-Stuart admits that details are still in discussion.
"We are still doing feasibility studies regarding what exact products are to be made in Shaanxi, using what technology and sold at what price," Moody-Stuart says.
What is certain with the joint project in Shaanxi is that future products will target the local market but will have to be competitive with the international market. Only in this way can the joint venture be sustainable globally, rather than just in China, he says.
Besides the Shaanxi project, Anglo American's other investment plans are also right on track.
Anglo Platinum has a platinum exploration joint venture in Ganzi, Southwest China's Sichuan Province. And AngloGold Ashanti is actively looking for gold in Xinjiang Uygur Autonomous Region and Qinghai Province.
"We are eyeing diversified business opportunities in China. We are moving forward with our existing projects and most of them are in good shape, such as our Yang Quarry (limestone), which already started production last year.
"And the feasibility study for future projects, such as coal in Shaanxi and platinum in Sichuan, are doing well and showing encouraging results," Moody-Stuart adds.
Market and investment base
Anglo American regards China as both a gigantic market and an important place for investments in the long run.
"We are committed to establishing a long-term and sustainable partnership with China to meet the country's surging demand for minerals and energy resources," Moody-Stuart says. Anglo American's sales reached US$2 billion in China last year.
In the chairman's vision, China plays an increasingly important role in the global natural resources market. For the production and consumption of some mineral commodities, China's demand has become a driving force on a global basis.
For instance, China's jewellery market is growing so rapidly that the country
has become the world's top consumer of platinum and a significant market for
diamond jewellery. China imports about 70 tons of platinum every year for
jewellery as well as for industrial purposes.
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