China Day Ahead: Zijin Calls Off Investment; Billionaires Dodge Buffett

Zijin Mining Group Co., saddled with regulatory probes in China over a toxic spill, said it called off the acquisition of Platmin Congo Ltd.

The company has allowed the deal to expire after failing to complete the purchase by the Aug. 31 deadline, the Shanghang, Fujian province-based company said in a statement to Shanghai’s stock exchange.

Chairman Chen Jinghe’s plan to make at least two overseas acquisitions this year was hampered by regulatory probes and cleanup for the acid-laced waste leakage on July 3 that polluted a river in Shanghang, killing enough fish to feed 72,000 residents a year.

Gates, Buffett

Billionaires Bill Gates and Warren Buffett will publicly explain the purpose of their planned visit to China after a newspaper reported that a number of wealthy Chinese individuals declined to attend an event hosted by the two due to concerns they’d be asked to give their money to charity.

Gates and Buffett, respectively the world’s second and third-richest people, will write a letter that may be released as early as this week detailing why they’ve invited Chinese billionaires to a private event during a visit to the Asian nation at the end of the month, Zhang Jing, a press officer for the Bill and Melinda Gates Foundation’s Beijing office, said by telephone.

“Our biggest intention for this month’s China trip is to learn how to do philanthropy in China,” Zhang said. “We would like to learn how to propel the charity business in such a big developing nation.” Gates, 54, and Buffett, 80, who Forbes Magazine estimates are worth a combined $100 billion, are aiming to press billionaires to pledge at least half of their fortunes to charity.

Renewable Subsidies

China, the world’s biggest power consumer, almost doubled consumer subsidies for renewable-power generation in the second half of last year, putting a greater burden on electricity users to reduce air pollution.

Surcharges paid to low-emissions generators harnessing the wind, sun and biomass such as straw totaled 3.7 billion yuan ($545 million) in the second half of 2009, compared with about 2 billion yuan in the year-earlier half, according to a joint statement by the National Development and Reform Commission and State Electricity Regulatory Commission.

Yanzhou Coal Purchase

Yanzhou Coal Mining Co., the Chinese company that paid more than $3 billion for Felix Resources Ltd., said it will seek to acquire 51 percent of Inner Mongolia Haosheng Coal Mining Ltd. to increase its reserves.

The company will pay 4.63 billion yuan to two sellers for a 35.5 percent stake in the developer of the Shilawusu coal field, and seek to buy a further 15.5 percent through an open bidding process, Zoucheng, Shandong province-based Yanzhou Coal said.

Pilots Lied

An investigation by China’s aviation authorities after a crash last month found more than 200 commercial pilots lied about their qualifications and flying records on their resumes, news website said, citing comments by an unidentified official from the regulator.

At least half of the pilots worked for Shenzhen Airlines, the parent of Henan Airlines, according to the report. A Henan Airlines plane operated by the Shenzhen Airlines, an affiliate of Air China Ltd., crashed in Yichun, northeast China, on Aug. 24 leaving 42 people dead and 54 injured.

China Rail Traffic

China’s railroads carried 1.14 billion people in the first eight months this year, a rise of 8.9 percent from a year earlier, Xinhua News Agency reported, citing the Ministry of Railway.

Trains transported 1.32 billion tons of coal from January to August, up 16.4 percent on year, while the amount of oil transported rose 5.5 percent to 91 million tons, the ministry said.

Finance Ministry Bond Sale

China’s finance ministry will sell 15.2 billion yuan of five-year bonds and 20.6 billion yuan of three-year bonds on behalf of local governments today, the ministry said in a statement on its website.


Stocks rose to a four-week high, industrial metals rallied and corporate creditworthiness improved on the prospects for economic growth. European bonds rebounded from three days of losses.

The MSCI World Index of shares in 24 developed markets climbed 0.4 percent at 9:25 a.m. in New York, while U.S. stock- index futures advanced 0.2 percent on the Labor Day holiday and Brazil’s Bovespa index rose 0.3 percent. The cost of insuring European corporate bonds using credit-default swaps fell for a fourth day, the longest decline in six weeks. German bunds and U.K. gilts rose, while copper and nickel gained and oil fell.

“People have to recognize we’re not facing economic Armageddon,” Mark Tinker, global equity-portfolio manager in London for Axa Framlington, which oversees $30 billion, said on Bloomberg Television’s “Start Up” with Maryam Nemazee.

U.S. markets were closed for the Labor Day holiday.


Baoshan Iron & Steel Co. (600019 CH): China Iron & Steel Association is in talks with iron ore producers seeking to price the raw material on a monthly basis, China Minmetals Corp. said. Baoshan rose 7.1 percent to 6.98 yuan.

China Properties Investment Holdings Ltd. (736 HK): The real-estate investor will raise as much as a net HK$19.4 million through the placing of as many as 360 million new shares at 5.6 cents each to finance development of its copper and molybdenum mine in China’s Inner Mongolia region. The stock fell 4.6 percent to 6.2 Hong Kong cents.

Far East Holdings International Ltd. (36 HK): The information technology and garment-trading company said one director and two of its employees have been charged by the Hong Kong’s Commercial Crimes Bureau under the Companies Ordinance. The stock, suspended from trading yesterday, fell 3.8 percent to 77 Hong Kong cents on Sept. 3.

Guoyuan Securities Co. (000728 CH): Guoyuan Securities Co.’s August net income was 88.9 million yuan on sales of 177 million yuan. The stock rose 6.2 percent to 13.08 yuan.

Industrial and Commercial Bank of China Ltd. (601398 CH): The bank plans to sell 22 billion yuan ($3.24 billion) of bonds on Sept. 10. The stock rose 1.2 percent to 4.15 yuan.

Longrun Tea Group Co. (2898 HK): The maker of branded tea products in China will buy 70.9 percent of the operator of the Tea Story chain of more than 400 franchised teahouses in China for 4.5 million yuan. The stock gained 1.1 percent to 46.5 Hong Kong cents.

Maanshan Iron & Steel Co. (600808 CH): Maanshan Iron & Steel Co. said its board approves restructuring investment in Anhui Changjiang Iron & Steel Co. The stock rose 4.4 percent to 3.58 yuan.


Larry Summers, head of President Barack Obama’s National Economic Council, continues his visit to Beijing. He is scheduled to meet Chinese Premier Wen Jiabao and State Councilor Dai Bingguo in the Chinese capital today.

Vice President Xi Jinping will address an investment forum in Xiamen, Fujian province today that is also attended by Trade Minister Chen Deming, stocks regulator Shang Fulin and the heads of the Shanghai and Shenzhen stock exchanges.


7:10   Li Wei, Standard Chartered Bank, China Economist 8:10 Kirby Daley, Newedge Financial H.K., Senior Strategist 8:40 Eric Wen, Mirae Asset Internet Research 9:10 Tomo Kinoshita, Nomura Securities Asia, Deputy Head of

Asia Economics

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