Investing abroad not easy: Experts (3)

Cooperation

Valin's Li said its investment has promoted strategic cooperation between Fortescue and other Chinese enterprises.

Up to 50 percent of Fortescue's capital goods - valued at $2 billion - were sourced from China, said Neville Power, Fortescue Mining Group's chief executive officer.

"We believe the number will grow in the future," said Power.

The company's trains used for iron ore transportation from the processing plants to the port are made by two top train producers in China - CSR Corp Ltd and CNR Corp Ltd.

China International Marine Containers Group Ltd provides dormitories in miners' camps for company staff.

China's Fujian Haian Rubber Co Ltd is the supplier of tires for some heavy mining trucks used by Fortescue.

Because of the high standards required for such tires, which can be used in extreme weather and harsh geographic conditions, there are not many producers in the world. China hasn't exported these products before.

Haian Rubber was the first producer of such tires in China and the fourth in the world - the other three being in Japan, the United States and France.

For Chinese suppliers, making their presence known on the international market is more significant than making money. The mining giants usually get a good deal, which is a win-win situation.

Last June, Rio Tinto, another Australian mining company, bought custom-built trucks from Xiangtan Electric Manufacturing Corp, a manufacturer based in Xiangtan, a city in Hunan province. It was the first time the Chinese company had exported trucks and was a large step forward in its expansion into overseas markets.

According to the company, it spent $2 billion in 2012 in the Chinese market, $800 million more than the previous year.

Mark Rivers, general manager of emerging markets procurement for Rio Tinto, told China Daily the company was not only purchasing trucks but also looking for Chinese suppliers of other mining equipment with advanced technology.

He said he believes the high-technology equipment market in China will grow rapidly over the next decade.

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