Zijin Mining Group Co., Ltd. : Chen Jinghe Dialogues with Rogers on Financial Globalization and Mining Opportunities

10 Sept 2013

On 08 Sept 2013, at the 11th Captial Forum on the 17th China International Fair for Investment & Trade held in Xiamen, China, Chairman of Zijin Mining Group Chen Jinghe talked with famous international investor Jim.Rogers on key economic issues at home and overseas.

The China International Fair for Investment and Trade (CIFIT), sponsored by Ministry of Commerce, People's Republic of China (MOFCOM), takes place on September every year in Xiamen. Themed on "Introducing FDI" and "Going Global", CIFIT is currently China's only international investment promotion event aimed at facilitating bilateral investment. It's also the largest global investment event approved by Union of International Fairs (UFI).

Jim Rogers is the co-founder of the Quantum Fund, and famous for his investment in commodity futures. At the Capital Forum, Mr. Rogers said that "there are many wisdom and ambitions people in China, I feel very optimistic about the future of China and its currency" "The only currency I can see that is on the rise and can replace the US dollar some day is the Renminbi."

Chen Jinghe, chairman of Zijin Mining Group Co Ltd and also vice-chairman of the China Gold Association, said that" in the field of base metals, there is a strong demand of Renminbi globalization as it will have a very profound influence on Chinese enterprises such as reducing restrictions for Chinese enterprises to 'go global', helping relieving the pressure of excess capacity and improving the efficiency of private capitals; meanwhile, it also will promote China open wider to foreign investors like Mr. Rogers and create a batch of real highly internationalized Chinese enterprises. Let's take China's accession to the WTO in 2001 for example, many people were worried about its negative impacts for Chinese enterprises, while actually, China's accession to the WTO brought out rapid growth and development to China. Therefore, as a whole, though the process of Renminbi globalization is accompanied by unknown risks, Renminbi globalization will create more benefits to us.

Mr. Rogers added that China should "globalize the Renminbi in the next 20 minutes rather than the next 20 years". He thought that China is currently the world's second largest economic entity as well as the country with most amount of foreign exchange reserve, "there is no reason to restrict the Renminbi globalization. It is good for all Chinese people, as Renminbi globalization means all investors worldwide can invest in China, which will bring great market opportunities to China's commodities. Stock price in China will rise, China will become the world's center for commodity transaction, China's financial market will be the best in the world. The US dollar is a troubled currency, Renminbi globalization can't wait too long, now it is an opportunity for it. "

In addition, both Mr. Rogers and Chairman Chen believed that after over ten years' rise in price of gold and other base metals, it is common to undergo a "price correction" period. Chairman Chen said that "the production and consumption of China's base metals account for 40% of total amount all over the world, it is inevitable to reduce the growth pace and further affect the metal prices."Mr. Rogers said that "the significant decline of market value in mining industry is a very good opportunity for people who are familiar with this field. If the value drops to 10% of original value, I am going to take some actions."

Talking about experiences of corporate internationalization, Mr. Chen thought that" in the beginning, we could be more conservative as we lack sufficient capacities and experiences, but once we find great chances, we should be bold enough to take immediate actions.""Zijin spent over ten years in doing one overseas project and gained a lot of experiences and lessons. Currently we can see that the overseas projects of Zijin are still comparatively competitive despite great depression of overseas market. This is mainly because that we can take different strategies according to different market and situations. For example, we put Chinese managers into the management team of our Mid-east Projects due to its backward local economy, while in our project in Australia, most of people in management team are local people except the CEO who is Chinese who lived in Australia for over 20 years. "

Mr. Chen thought that the Mr. Rogers's classic investment cases perfectly reflect the basic concept of "invest in rock-bottom". At present, the market value of many international mining companies drops to 30%-40%, or even 10% of the average level in past several years. "This is absolutely a great opportunity for us to make an investment."