Chen Jiulin: * Ore prices will rise sharply

When the renowned investor Chen Jiulin took the stage at the 2014 Beijing Mining and Investment Summit, the audience greeted him with enthusiastic applause. As the former chairman of Beijing Joseph Investment Co., Ltd., he has always been passionate about the mining sector, aiming to generate substantial returns through strategic investments. His journey in finance has been nothing short of dramatic—once hailed as the "King of Chang You," he later faced a major scandal that led to his imprisonment.

Chen's career took a remarkable turn when he was appointed to manage China Aviation Oil (Singapore) Co., Ltd. Under his leadership, the company’s net assets soared from $176,000 to $150 million—an impressive 852-fold increase. However, this success was short-lived. In 2006, due to a massive loss of $550 million from oil options trading, he was convicted of fraud, failure to disclose information to the Singapore Exchange, and insider trading. This marked a dark chapter in his career.

After serving his sentence, Chen Jiulin made a comeback in 2010, joining the Gezhouba Group International Engineering Co., Ltd. as a leading member. But his tenure there was brief, and by 2012, he decided to focus on investment again. Recently, he announced an ambitious move: investing in an Australian-listed company valued at over $40 billion. “This is a great time to get into the mining sector,” he stated, expressing confidence in his decision.

Chen believes that the future of nuclear energy is inevitable, and with it, the demand for uranium will surge. He pointed out that China is actively acquiring global mining resources, with companies like China Guangdong Nuclear Power and China National Nuclear Corporation leading the charge. “It makes sense to invest in an Australian listed company with significant mining assets,” he said, emphasizing the long-term potential.

Currently, 75% of China’s uranium is imported, mainly from Australia, Canada, Africa, and Central Asia. Australia, in particular, is known for its rich mineral resources. With plans to build 80 nuclear reactors by 2020, the need for raw materials will only grow. “You can’t fight a war without fuel,” Chen joked, highlighting the importance of securing these resources early.

Wang Jinping, head of the China National Nuclear Zimbabwe Project Company, echoed similar sentiments. He noted that by 2020, China aims to reach 58 million kilowatts of nuclear power capacity, which would account for around 4% of total electricity generation. This represents a threefold increase in the next five to six years.

Despite this growth, nuclear power still accounts for less than 2% of China’s electricity, with coal dominating at two-thirds. However, with 28 nuclear plants under construction and more in the planning stages, the shift toward cleaner energy is becoming more apparent.

Wang also pointed out that the Fukushima disaster in Japan caused a drop in uranium demand, leading to a surplus and falling prices. Uranium prices, once as high as $135 per pound, have now fallen below $30. However, he predicts a significant rebound by 2020, citing the lengthy development cycle of mining projects—from exploration to commercial production, which can take 8 to 12 years.

Chen Jiulin is confident that uranium prices will rise sharply by 2016 at the latest. “We must seize this opportunity,” he emphasized. To maximize returns, he plans to drive up the stock value of the company he invested in, aiming for a major valuation boost by 2017 or even further ahead. “This is not just an investment—it’s a long-term bet on the future of energy,” he concluded.