A mysterious Chinese mine owner controls a kingdom worth 200 billion. There are only rumors, no news.
The International Energy Agency (IEA) predicts that by 2035, there will be a shortage of about 30% in the global primary copper supply.
A mysterious Chinese boss, about whom there are only rumors but no news, has become a world - class copper player and created a legendary wealth myth through a once - in - a - lifetime investment made 20 years ago.
Entering the Game
In 2003, in Luoyang, Henan, a silent business battle was underway.
Luoyang Molybdenum Co., Ltd., a state - owned enterprise mainly engaged in molybdenum ore development and molybdenum product production, was in trouble due to the sharp drop in molybdenum prices and poor management. It had to halt production. More than half of its over 6,000 workers were laid off, and the remaining workers could hardly get their monthly salary of over 400 yuan.
The government then promoted the enterprise restructuring, hoping to introduce social capital to get out of the predicament.
Molybdenum, with characteristics such as high strength, high toughness, heat resistance, and corrosion resistance, is also known as the "industrial monosodium glutamate". Luanchuan County, Luoyang, Henan, where Luoyang Molybdenum is located, is a global molybdenum resource hub. By 1988, the cumulative proven molybdenum metal reserves reached 2.06 million tons, ranking third in the world and first in Asia.
Such remarkable resource advantages naturally attracted many competitors. Guo Guangchang of Fosun and Chen Jinghe of Zijin Mining all flocked to the scene. However, in the end, it was an unknown Shanghai company, Hongshang Industrial Holding Group (hereinafter referred to as Hongshang), that got the entry ticket.
Public information shows that Hongshang officially opened on August 28, 1998, on a whole floor of the Shanghai Jinmao Tower, then known as the "tallest building in China".
Hongshang's equity structure is also very interesting. A natural person named Yu Yong holds 99% of the shares, and a handicraft textile company named Wafangdian Weisite Co., Ltd. holds the remaining 1%. The legal representative of Wafangdian Weisite is also Yu Yong.
Yu Yong's bid was not the highest. He spent 178 million yuan to acquire 49% of the shares of Luoyang Molybdenum. Among them, 137 million yuan was for capital increase, and the other 41.01 million yuan was used to compensate laid - off employees.
In the business circle at that time, Yu Yong was almost unknown. There were various speculations about where his money came from. Some speculated that he might have been a long - position trader in the "327" Treasury bond futures incident in 1995, but this has not been confirmed.
In terms of capital and reputation, Fosun and Zijin Mining had more advantages than Hongshang. However, it was Hongshang that won in the end because the condition Yu Yong offered was the most appealing to the Luoyang government: He didn't ask for controlling rights.
After entering the game, Yu Yong also chose to stay in the shadows in the new board of directors. He didn't hold any position in the company, rarely participated in company activities, and never accepted media interviews. It was also very difficult to find his official information and traces of his activities online.
Over the years, the only time he appeared in media reports was when he, as the person - in - charge of Dalian Dongli Handicraft Textile Co., Ltd., a subsidiary of Wafangdian Weisite, had a discussion with the leaders of the Wafangdian State Taxation Bureau.
In hindsight, Yu Yong's investment was like picking up money, and a huge amount of it. In the year after the restructuring of Luoyang Molybdenum, the company made a profit of 280 million yuan, and in 2006, it soared to 1.714 billion yuan.
In 2007, Yu Yong promoted the listing of Luoyang Molybdenum in Hong Kong, raising 8.1 billion Hong Kong dollars. Top Hong Kong tycoons such as Li Ka - shing, Lee Shau - kee, and Cheng Yu - tung all came to support him, subscribing for stocks worth 160 million US dollars.
In just a few years, an investment of less than 200 million yuan had grown into an industrial map worth tens of billions.
In 2012, Luoyang Molybdenum returned to the A - share market and became an A + H listed company.
After the successful dual - listing of Luoyang Molybdenum, the silent second - largest shareholder, Yu Yong, suddenly launched an offensive.
In 2014, Hongshang Group continuously increased its holdings in the secondary market. Its shareholding ratio exceeded Luokuang Group's 35% and reached 36.01%, making it the actual controller of Luoyang Molybdenum overnight.
Striking Out
After gaining control, Yu Yong led Luoyang Molybdenum out of Luoyang and into the global market.
From 2012 to 2018, the global commodity market was in a long - term bear market. The copper price plummeted from a high of 8,700 US dollars to over 4,000 US dollars. The entire mining market was in a dire situation. International mining giants such as Anglo American Resources, Freeport - McMoRan, and Glencore were all struggling and even had to sell their core assets to survive.
In 2016, at the board meeting of Luoyang Molybdenum, Li Zhaochun, the vice - chairman of Luoyang Molybdenum and a core executive of the Hongshang system, used Charles Dickens' famous quote to describe that moment: "It was the best of times, it was the worst of times."
Yu Yong regarded it as the "best of times" and led Luoyang Molybdenum, which had just raised funds through listing, to start global "shopping".
In 2013, Luoyang Molybdenum spent 820 million US dollars to acquire 80% of the shares of NPM, the fourth - largest copper - gold mine in Australia. At that time, Luoyang Molybdenum's annual net profit was only 1 billion yuan, but it dared to spend nearly 5 billion yuan on overseas expansion.
In 2016, Yu Yong made two consecutive bold gambles.
First, he spent 1.5 billion US dollars to buy a niobium - phosphate mine in Brazil from Anglo American Resources Group, making Luoyang Molybdenum the world's second - largest niobium producer overnight. It controlled about 10% of the global niobium metal supply and entered the agricultural resource phosphate fertilizer business for the first time, forming a cash - flow business that complemented the metal cycle fluctuations.
Only 11 days after the acquisition of the Brazilian niobium - phosphate mine, Yu Yong seized the opportunity when Freeport - McMoRan in the United States was in urgent need of cash due to its failed investment in oil and gas. He spent 2.65 billion US dollars to acquire 56% of the shares of the TFM copper - cobalt mine in the Democratic Republic of the Congo.
TFM is one of the copper - cobalt mines with the largest reserves and highest grades in the world, with 3.06 million tons of copper and 520,000 tons of cobalt.
Source: 21st Century Business Review
When the acquisition was initiated, the copper price was at a low level, hovering around 5,000 US dollars per ton, and cobalt was an obscure metal. However, Yu Yong saw the new value of these two metals: New - energy vehicles cannot do without copper and cobalt.
Copper is the core material for motor windings and is the "brain" of electric vehicles. Cobalt is the key material for the cathode of ternary lithium - ion batteries and is the "heart" of electric vehicles. Yu Yong believed in the future of electric vehicles and thus believed in the future of these two metals.
In hindsight, the timing of this deal was perfect. A few months later, the prices of copper and cobalt began to rise. The cobalt price even tripled from the bottom, becoming the most volatile metal.
But the most exciting part of this deal was the second stage.
In 2017, Lundin Mining, a minority shareholder of TFM, also decided to sell its 24% stake.
Yu Yong wanted this 24% stake but didn't act immediately. Judging from the relevant facts and information later, he promoted Luoyang Molybdenum to design a transitional deal: cooperate with Bohai Huamei (BHR), an investment institution in which Hunter Biden, the son of then - US President Joe Biden, had a stake. First, BHR would complete the acquisition. Three years later, BHR would sell the acquired shares back to Luoyang Molybdenum at the acquisition price. In return, Luoyang Molybdenum would pay BHR interest.
A Chinese company's consecutive large - scale acquisitions of overseas strategic resources in a short period would inevitably arouse high - level alert and scrutiny from the host country and the international community. This design could not only ensure that Luoyang Molybdenum completed the acquisition but also avoid the geopolitical risks of Luoyang Molybdenum being too prominent and better control its own debt level.
Li Zhaochun, the vice - chairman of Luoyang Molybdenum who led this deal, later said that this design was to save money. Letting BHR take over first and using the "equity in name but debt in essence" method could reduce the company's debt pressure.
On the surface, Hunter Biden did not play a role in the deal. Both parties involved in the deal claimed that the deal had nothing to do with him, and the spokesperson of Luoyang Molybdenum also claimed to "not know him". However, BHR's involvement obviously saved Luoyang Molybdenum a lot of trouble.
After this acquisition, except for the 20% dry shares held by the Congolese state - owned assets, Luoyang Molybdenum held the remaining 80% of the equity in TFM. Since then, Luoyang Molybdenum has rapidly developed TFM into the world's fifth - largest copper mine and the second - largest cobalt mine, with five copper - cobalt production lines and an annual copper production capacity of 450,000 tons.
In 2020, Luoyang Molybdenum spent 550 million US dollars to acquire another copper - cobalt mine, KFM, in the Democratic Republic of the Congo, becoming the world's largest cobalt producer and an important copper producer overnight.
Source: 21st Century Business Review
After 10 years of lying low and 10 years of striking out, Yu Yong's initial investment of 180 million yuan had woven into a world - class mining giant with a business map spanning Asia, Africa, South America, and Australia.
It owns nearly one - third of the world's cobalt resources, about one - fourth of the tungsten resources, and nearly one - tenth of the copper resources. It is also the world's largest molybdenum and tungsten producer and the second - largest cobalt and niobium producer.
Yu Yong has thus been crowned the world - class "King of Resources".
Building the Industrial Chain
While continuously deploying in the upstream, Yu Yong also tried to expand downstream.
Selling ore only earns money from the market cycle, which goes up and down. Deeply embedding in the industrial chain, mastering, and even defining the industrial chain not only helps create added value but also gives more initiative.
For this reason, in 2019, he spent nearly 500 million US dollars to acquire IXM, the world's third - largest base metal trader, extending his influence to the core network of the global metal trade and strengthening his voice in the global metal trade field.
His bigger plan targeted the new - energy vehicle industry, which he had long been optimistic about.
The first one he involved was Zeng Yuqun, the "King of Batteries".
Yu Yong and Zeng Yuqun had cooperated as early as 2016 when Contemporary Amperex Technology Co., Limited (CATL) was not yet listed. At that time, during CATL's second capital increase, the Hongshang system subscribed for 1.91 million shares at a price of 3.14 yuan per share, spending 6 million yuan.
In the same year, during CATL's rapid expansion period, it quickly carried out a third capital increase. The Hongshang system subscribed for shares again with creditor's rights worth 794 million yuan, and its shareholding increased to 20.91 million shares.
Yu Yong saw China's national will to develop electric vehicles to achieve "leapfrogging development" and CATL's key position in it. What he wanted was to further catch the wave of the era he had foreseen through CATL.
Obviously, he made the right bet. After its listing, CATL soared. Yu Yong's investment had a book return of over 40 billion yuan. Most importantly, he was deeply bound to the "King of Batteries" and formed a close alliance at the business level.
In 2022, their cooperation deepened further. Zeng Yuqun, who had become the global battery king, through his affiliated company, invested in Luoyang Molybdenum in reverse, holding 24.68% of the shares and becoming the second - largest shareholder after Yu Yong.
The "King of Batteries" and the "King of Molybdenum" officially formed a strategic alliance. After that, they established a joint - venture company to mine lithium salt lakes in Bolivia and jointly develop two copper - cobalt mines in the Democratic Republic of the Congo. They took risks together and won together.
Luoyang Molybdenum provides stable and cheap raw materials for CATL to jointly resist upstream price fluctuations. CATL, on the other hand, secures a huge downstream market for Luoyang Molybdenum. The new - energy vehicles that Yu Yong believed in back then have truly become a reality.
In 2021, Yu Yong also involved Li Shufu of Geely in the game by participating in the Pre - A round of financing of Geely's high - end electric brand, Zeekr, further consolidating his position and layout in the new - energy vehicle track.
The Shadow
In the Chinese business circle, Yu Yong is an outlier.
He has frequently appeared on the rich list since 2018 but has always remained mysterious. There isn't even a recent photo of him. Most of the public information about him is rather ambiguous and shadowy.
The first complex past is related to the Delong Group.
In 2004, Hongshang Group initiated the establishment of China Express Airlines, and its only partner was a company called "Beijing Lide Investment". This company had a close relationship with Hongshang. Xu Jun, who had worked in Hongshang - affiliated companies, was a director of Lide Investment, and Yu Bo, who represented Yu Yong at the listing ceremony of Luoyang Molybdenum, had been the legal representative of Lide Investment.
Lide Investment later transferred Zhongfu Securities, in which it held a controlling stake, to Tang Wanxin's Delong Group. Then Tang Wanxin raised 790 million yuan through illegal fundraising via Zhongfu Securities.
After the incident was exposed, the Delong Empire collapsed, and Tang Wanxin went to prison. Hongshang Group also quietly cut off its relationship with Lide Investment and withdrew from China Express Airlines.
Yu Yong's association with Zhang Shaochun, the former vice - minister of the Ministry of Finance, revealed another side of his wealth map.
In 2017, Hongshang Group tried to take control of Sino - French Life Insurance Co., Ltd. At that time, Sino - French Life Insurance had been