BEIJING -- Armand Hammer, the 89-year-old chairman of Occidental Petroleum Corp., was looking relaxed and sounding ebullient Friday, having confounded the doubters who thought he would never see the opening of his giant China coal mine project.
After 5 1/2 years of torturous negotiations and a little more than two years of construction, one of the world's largest open pit coal mines officially opened Thursday, with Hammer and Chinese officials presiding.
Total investment in the mine and associated facilities has come to about $1 billion. But the investment in time, energy and nerves has been equally impressive.
The project once seemed to be the biggest symbol of western investment in China. Then it encountered so many problems that it began to symbolize the difficulties of investing here.
The biggest Sino-U.S. business deal was once described in press reports as "near collapse" and Occidental's original partner, an Omaha, Neb., construction company, got cold feet and dropped out.
The project still has a long way to go to prove profitable. But Hammer was clearly enjoying the situation Friday. He sipped Chinese tea in a luxurious guest house usually reserved for world leaders and thought back over the predictions of disaster for the coal mine.
"In spite of all the skeptics, we made it and that's what counts," said Hammer, describing with pleasure how the first railroad cars loaded with coal began to roll out of the mine Thursday at Antaibao, 310 miles west of Beijing.
Hammer said that the biggest problem throughout has been dealing with the huge Chinese bureaucracy. But now that China's largest open pit mine, the first to be developed with foreign cooperation, has opened, the biggest remaining problem is the price of coal.
When Occidental was still just studying the project back in 1982, the price of coal was $52 a metric ton. It now ranges between $22 and $25 a ton.
When coal prices fell, the only other American partner, Peter Kiewit Sons' Inc., of Omaha dropped out of the project. But the Bank of China (BOC) replaced the U.S. firm, and Hammer describes BOC as "the best partner you could have."
The bespectacled, rough-voiced Hammer argues that the price of coal will inevitably rise again, because, in his view, it is linked to oil prices.
"It's true that the price of coal is very low now," Hammer said. "It's very depressing. But we're not in this thing for the short haul. We're in for the long haul.
"We think it's tied in with the price of oil, and the fact that there's not enough oil in the world... . Utilities not only in the United States but all over the world will have to turn to coal."
Hammer's China adventure began in 1979, when he met this country's senior leader, Deng Xiaoping, in Houston during Deng's only visit to the United States.
Hammer had already been to the Soviet Union innumerable times since his first visit there in 1921. In that year, he met Lenin and decided that he could make a profit in a communist country. But he had never been to China.
As Hammer recalled it, Deng said to his hosts during the encounter in Houston, "You don't have to introduce Dr. Hammer to me. We all know him in China."
"You helped Lenin when Russia needed help," Hammer said Deng told him. "Now you've got to come to China and help us."
Hammer later encountered problems getting approval to put a corporate Twin-Otter airplane, to be the first based in China, at a coal mine airstrip.
The Chinese military was strongly opposed to the idea but, according to Hammer, Chinese leaders intervened and his company now uses the plane to fly personnel, spare parts and other materials on a regular basis to the mine.
"The most difficult problem has been coping with bureaucracy," Hammer said. "But that's nothing unusual for us. We've had that problem in Russia and everywhere where we have to deal with governments.
"But the government takes care of labor problems in China," Hammer said. "You don't have unions to contend with here.