Mining overseas report released, advising mining companies to promote synergy between upstream and downstream industries

China News Service, Beijing, November 7 (Reporter Zhang Su) A recently released report believes that the development logic of the global layout of Chinese mining companies is changing from early sporadic testing to diversified models of overseas expansion, and from resource acquisition orientation to long-term value management.

The report titled "Across Mountains and Seas, Resources Without Borders: Insights into the Globalization of China's Mining Industry" was released by KPMG. It pointed out that China has significant resource advantages in a variety of strategic minerals, and some mineral reserves, output and smelting scale are among the best in the world. However, the structural shortcomings of resource endowment are prominent, which is reflected in the fact that new resource reserves cannot keep up with the consumption rate, and domestic mineral production cannot keep up with the pace of actual consumption.

The report believes that the national strategy has been systematically upgraded from the legal, institutional, energy target and other levels. It is difficult to fully cover the new demand by tapping domestic potential alone. Overseas mineral development has become an important strategic extension to ensure national resource security.

The report summarizes the three historical stages that Chinese mining companies have gone through in their globalization development, namely budding and testing, expansion and setbacks, and rational development and the rise of giants. The report noted that since 2014, the focus of corporate investment has shifted to Africa, Latin America, Southeast Asia and other regions. Participants have formed a pattern of coordinated advancement of state-owned and private enterprises. Investment targets have extended to key new energy minerals such as lithium, cobalt, and nickel. A group of local mining giants have gradually established global influence.

"The globalization journey of Chinese mining companies is a marathon that tests endurance and wisdom. Only with professionalism as the basis can we weather the wind and waves and move forward steadily." said Jiang Liqin, partner in charge of client and business development at KPMG China.

The report points out that in the context of global energy transformation and profound adjustments to the geopolitical landscape, the model of mining companies going overseas has evolved from the traditional model to the upstream and downstream "gathering overseas", in-depth localized "resources + industry + infrastructure" package cooperation, and the "soft power" output of technology, standards and ESG (environmental, social and governance) systems.

Focusing on the key aspects of mining companies going global, the report proposes professional solutions from the aspects of financial advisory for M&A transactions, fiscal and tax due diligence and tax planning, ESG due diligence, transaction risk management, post-investment integration, accounting consulting and mining auditing.

The report also pointed out that mining companies should promote upstream and downstream industry collaboration, deepen localized cooperation, follow a sustainable development path, and shift the focus of evaluation from investment return efficiency to long-term stability of the supply chain.