When cross-border capital allocation shifted from lengthy "prior approval" to efficient "same-day remittance", and when lithium ore from West Africa was converted into battery materials in Yangpu for global sales, Hainan Mining Co., Ltd. (hereinafter referred to as "Hainan Mining") is relying on Hainan Free Trade Port (FTP) policies to complete its transformation from a single mineral enterprise to an international resource group. Standing at the new node of the whole-island closed operation, how will it plan its future global layout and industrial upgrading path? With these questions, recently, reporters from New Hainan Client, Nanhai Net, and Nanguo Metropolis Daily interviewed Teng Lei, Chairman and President of Hainan Mining.

Teng Lei, Chairman and President of Hainan Mining

Ride the FTP Wave to Unblock Industrial and Capital Chains

Hainan Mining's transformation was born out of crisis and thrived on opportunity. Since its establishment, the company has long relied on the single business of Shilu Iron Mine in Hainan, with weak risk resistance capacity. From 2015 to 2018, the sluggish iron ore prices, coupled with the rising costs brought by the transformation of mining methods, led to a decline in the company's performance, making it urgent to seek and layout a second growth curve.

The real turning point came in 2018, when the news of the state supporting Hainan in building a free trade port was announced. With the support of its controlling shareholder Fosun Group, the company acquired a controlling stake in ROC Oil in 2019, taking the first step towards diversification. Since then, through a series of mergers and acquisitions and development, the oil and gas business has achieved rapid growth, and its revenue and profit contributions now account for half of Hainan Mining's total, successfully building a "second pillar" to resist the cyclical fluctuations of traditional mining.

Subsequently, facing the global trend and transformation of the energy transition, under the background of the national "dual carbon" strategy and the construction of Hainan's clean energy island, Hainan Mining clearly defined in its "14th Five-Year Plan" strategic plan that the new energy industry, focusing on lithium resource mining, beneficiation and processing, would be an important direction for transformation and upgrading. "Choosing lithium in the new energy field is not only to comply with the industrial trend, but also to take advantage of the policy dividends that Hainan FTP is about to release," Teng Lei introduced.

Hainan Mining's Lithium Hydroxide Project in Yangpu

As the third main track to be built alongside "iron ore + oil and gas", in 2022, Hainan Mining's lithium hydroxide project with a total investment of over 1 billion yuan started construction in Yangpu New Materials Industrial Park. Its imported raw materials can enjoy the "zero tariff" policy, and the first batch of products has been sold recently.

To ensure the supply of upstream resources for the new energy industrial chain, in 2023, the company completed the acquisition of the Bougouni Lithium Mine in Mali, Africa, becoming one of the few domestic upstream lithium resource enterprises with the integrated advantages of its own high-quality mines and advanced processing production lines. Up to now, the Bougouni Lithium Mine project in Mali has produced more than 45,000 tons of lithium concentrate. The first batch of 30,000 tons of lithium concentrate was loaded and sailed from the Port of San Pedro, Côte d'Ivoire in November this year, and is expected to arrive at Yangpu Port in early next year. So far, the industrial model of "Overseas Resources + Hainan Processing" has entered the substantive operation phase.

Hainan Mining's Bougouni Lithium Mine Project in Mali, Africa

Business globalization has put forward higher requirements for capital management. With the continuous deepening of cross-border investment and financing reforms in Hainan FTP, Hainan Mining was approved to establish Changjiang's first "Hainan Free Trade Port Cross-Border Capital Pooling Operation Center" in October this year. With the help of this platform and multi-functional free trade accounts (EF accounts), the company can more efficiently complete cross-border capital allocation within the group, simplify business processing procedures, and significantly improve the capital management efficiency of global operations.

Teng Lei gave an example: "When overseas subsidiaries are short of funds, the company needs to lend funds to them in the form of overseas lending. Previously, handling this business required prior registration and filing of overseas lending with foreign exchange management departments, which took a long time. Currently, through the Hainan FTP EFE account, there is no need to conduct preliminary business registration and filing with foreign exchange management departments, and enterprises can complete the remittance on the same day of application."

Embrace the Closed Operation Opportunity to Deepen Globalization and Industrial Upgrading

While expanding new tracks and laying out globally, Hainan Mining is also committed to promoting the transformation, upgrading and value reconstruction of traditional businesses. Through the dual paths of "technology-driven" and "cultural-tourism integration", it explores the sustainable competitiveness and new value of old mining areas.

Faced with fluctuations in the iron ore market price, Hainan Mining did not respond passively, but took the initiative to invest in technological innovation, applying advanced technologies such as jigging beneficiation, photoelectric beneficiation, and suspended magnetization roasting to continuously improve production efficiency, product quality, and comprehensive resource utilization rate.

"Hainan Mining is the first mining enterprise in China to apply the jigging process," Teng Lei said. According to reports, this process is based on the principle of gravity separation, with a processing capacity of 500 tons per hour. The photoelectric beneficiation technology efficiently sorts ore by combining AI algorithms based on the differences in optical properties of ore particles.

Hainan Mining's Magnetization Roasting Project in Shilu

In addition, the technical transformation project of suspended magnetization roasting of iron ore is undergoing full-process commissioning. This technology is a world-leading new technology for the efficient utilization of complex and refractory iron ore. After commissioning, the grade of iron concentrate will be increased to more than 65%, and the iron metal recovery rate will be increased to 85%. The active tailings generated after roasting can also be used as building materials, gradually realizing the circular economy goals of tailings-free discharge and "comprehensive utilization of resources".

While realizing green production through technical means, Hainan Mining also cooperates with Hainan Iron and Steel Group to systematically promote the protection and development of geological and industrial relics in Shilu Iron Mine, and continuously explore the value continuation path of the mining area. Among them, the iconic 15,000-ton finished ore silo is being declared a provincial-level industrial heritage, and the Mining Expo Park built with old mining equipment has become a regional tourist attraction. This is not only "turning waste into treasure", but also transforming industrial history into cultural and tourism assets, injecting new cultural connotations and economic vitality into Changjiang, where the mining area is located, and realizing the unification of economic and social benefits.

Mining Expo Park

Standing at the threshold of the whole-island closed operation, Hainan Mining's future plan is clearer. "We will continue to deepen the global layout and expand the diversified industrial ecology," Teng Lei said. The company will continue to focus on key strategic resource categories such as iron ore, oil and gas, lithium ore, and fluorite ore, continuously consolidate and expand the global asset layout in China, Southeast Asia, West Africa, and the Middle East, strengthen cross-cycle product allocation, and continuously improve the strategic resource guarantee capacity.

"With the help of Hainan FTP policies such as corporate income tax reduction and exemption and 'zero tariff' on imported raw materials and auxiliary materials, the company has achieved cost reduction and efficiency improvement and obtained more development opportunities. With the advancement of FTP construction, government service efficiency has been significantly improved, and infrastructure supporting facilities have become increasingly improved, providing solid support for enterprise operations and making us more confident in the development after the FTP's closed operation," Teng Lei expects that on the basis of the stable continuation of the existing "zero tariff and low tax rate" policies of the FTP, higher-level opening-up policies can be further implemented.

"In the future, we will continue to be based in Hainan and face the world. We not only need to 'go global', but also firmly root high-value-added processing, trade and innovation links in Hainan, on this fertile land of the free trade port," Teng Lei said.