You can have as much money as you like, if you don't have the knowledge to use it to its full potential, you will loose it very quick. That is what the Chinese have been doing over the last few years. That is why the Chinese are changing tack so often. They now realise that they need to be able to run what they buy in a profitable way to warrant buying it in the first place. They are now seeing it is better to work with others that have the knowledge of running iron ore projects, rather than trying to own every thing themselves.
How many iron ore projects are acquired, financed, built, owned and run by one Chinese company? For that matter any other mineral projects?
How many mineral projects do the Chinese start up from scratch and run at a profit? The Chinese do not understand fully about acquiring a project to running a project. The Chinese let others start up a project and wait for it to get to a stage of looking very profitable or final funding needed before they show an interest. In the mean time they are learning nothing about how it got to that stage.
The Chinese rely on others to do all the hard work and then try to get hold of the projects at a give away price.
In the Hanlong affair, they wanted SDL staff to stay on after the take over was finalised so they could run the projects for them.
Regards Westcott.
SDL Price at posting:
9.7¢ Sentiment: None Disclosure: Held
