Ivanhoe’s Kipushi zinc mine in the DRC officially reopens
The restart marked exactly a century since the mine first went into production.
The story of disgraced former senior Chinese leader Bo Xilai may be the most well-known, but further down the political and business scales the position of China’s superwealthy can be just as precarious.
A prime example is the missing billionaire chairman of mining group Hanlong, Liu Han. His curious case also highlights the dangers faced by Western firms trying to do business with Chinese tycoons.
Signs that Liu, who is only 45 years old and founded the conglomerate in 1997, was in serious trouble first emerged last week when Reuters reported on a police investigation concerning accusations that Liu hid his brother – who has since been arrested in a triple murder investigation – from authorities.
Sichuan-based Hanlong has pursued a number of international mining deals– all of which now hang in the balance – including the $5 billion Mbalam iron ore project straddling Cameroon and Congo-Brazzaville in Central Africa with Australia’s Sundance Resources (ASX:SDL), a deal to develop an iron ore and copper-molybdenum mine with Moly Mines (ASX:MOL) in the Pilbara and another molybdenum project with US-based General Moly (NYSE:GMO), of which it owns 25%.
Sundance has indicated that Hanlong’s $1.4 billion takeover offer is unlikely to come to fruition, General Moly’s legal counsel has suspended work on a $665 million loan from the Chinese firm and Moly Mines says it is still investigating the consequences of Liu’s situation on its dealings with Hanlong and his seat on the Moly Mines board.
Naomi Rovnick writing in Quartz in a piece titled Curse of the Chinese billionaire argues Liu may just have been unlucky because China’s Communist Party, under increasing pressure from its citizens to do something about the high levels of corruption makes a show of how it has graft under control and “every so often it claims a high profile scalp”:
Coming so soon after China’s new president Xi Jinping was installed, analysts are saying Liu may have found himself on the wrong side of China’s new leaders. The influential Chinese business magazine Caijing reported, citing unnamed sources, that Liu may have helped wealthy Chinese to move money out of the country before the leadership transition. It’s also possible China’s new leaders may have wanted a big business scalp to prove to they are not beyond bringing tycoons to heel. Since last fall, the nation’s 1% have been dressing down and serving cheaper wine to dodge the spotlight. Alternatively, it may be that Liu simply ran afoul of a government official for reasons we’ll never know, or that he really is the subject of an entirely straightforward criminal investigation that has nothing to do with politics.
Image of Liu and Cameroon President Paul Biya July 2011: Sichuan Hanlong Group.
