ERG law suits would worry GCL? i just find this laughable. You have no idea mate. Let me put you in perspective with a story i recently read.
ShenHua decided to enter CTL in 2004, it has spent BILLIONS of dollars on the project but encountered some technical bottleneck. They turned to South Africa, the only country who has successfully gone industry scale on CTL.
SA asked for 50% JV disregarded the fact Chinese has spent BILLIONS of dollars. Chinese hated that so much and turned it down and the whole deal gets dragged out for a number of years.
Guess what happened a few years later? Shenhua completed the first plant with direct CTL conversion and entered 50% JV with SA on their CTL indirect conversion with their second plant.
I read a lot of articles about this SA deal. The biggest complain from the Chinese regarding their SA parter is: They are too INFLEXIBLE, overly CAREFUL.
When they asked SA partner to prepare a feasibility study, SA took it very seriously and catered for every single detail and submitted a prelimiary project plan. ShenHua was very frustrated as they expected SA to do it ASAP, so they can proceed to apply for Gov funding.
Meanwhile, there are articles pointing out that GCL has planned for this day since 2007 with giant enterprise POLY backing them. They acquired Bayabaogeli Mine on 2008/2009 for today. But the timing was a bit bad, since 2008 Gov put the brake on CTL and only granted ShenHua to go ahead.
ShenHua's plant is right next to GCL my friend. Just put it in perspective please, some silly law case which has nothing to do with UCG or CTL against LNC would scare off Chinese for BILLIONS of dollar deal on the plate. If you say this law case is somehow even remotely related to the IP, that might worry the Chinese. A very attractive thing is 33% JV is way lower than other competitors have asked for and would be seen as much fairer than other alternatives in GCL's eye.
IMO, the problem here is PB seems to be repeating the SA's story. I don't blame him trying to get details right but he is behind schedule while chinese expected him to just sign the bloody thing and start construction which was supposed to happened back in MAY. GCL needs the contract to formally kick off everything. GCL has waited for this day for a long long time and on GCL's website this project is referred as the third strategic business transformation of GCL. And, i am sure GCL does not want to repeated the story back in 2008 . It is critical to get it done ASAP while GOV's foot is off the brake.
Maybe you dont understand the timing importance, I will give you a side story of YONGKANG, another giant spent billions of dollars on CTL ShenHua and went through two phases of trails and submited 2 feasibility study and requested the final approval in 2008. Their progress was second to ShenHua and they missed the window and their third and last approval request was rejected due to Gov's changing direction on CTL. Kaboom, 30 Billion Yuan, 5B aud dollar investment was dead in the water. GCL was simply lucky that they haven't actually invested anything other than acquiring coal resources back then.
Now you come in trying to tell me that ERG would trouble GCL for 1 second as they were little frightened rabbits.
LNC Price at posting:
53.0¢ Sentiment: None Disclosure: Held
