IT has been a busy year on the acquisition path for Zijin Mining Group, the world’s biggest gold producer by market value, and it intends to push ahead with further deals outside China to improve its portfolio quality. This year Zijin has unveiled intended acquisitions of foreign assets in Papua New Guinea, Democratic Republic of Congo and Australia following increasing its stake in a Canadian property late last year.
Papua New Guinea Mining Minister Byron Chan (right) chats with a Zijin Mining executive regarding the company’s acquisition of 50% of Barrick Niugini Ltd’s 95% ownership of Porgera gold mine.
“We are very active and do not restrict our targets in any specific regions or assets, though we mainly look into gold and copper,” company chairman Chen Jinghe said.
Along similar lines vice-president George Fang said, “We will not stop. In terms of how much we will need to spend, that depends on the opportunity and the funding strategy.”
Started from Zijinshan Gold Mine in 1993, Zijin Mining Group has developed an extensive portfolio of gold, copper, lead and zinc, tungsten, iron and other base metals, with gold being its main focus. Zijin has become a large state holding mining group specializing in gold and mineral resource exploration and development with subsidiaries in more than 20 provinces, municipalities, autonomous regions across China and around the world.
Listed on the Shanghai Stock Exchange and the Hong Kong Stock Exchange, Zijin has a market capitalization of more than US$17 billion and in 2014 recorded revenue of approximately US$10 billion.
Zijin posted a 20.9% rise in its first-half net profit at 1.3 billion yuan (US$203 million) despite a sharp fall in gold and copper prices over the period. Other major Chinese gold producers posted falls in first-half net profit. Zhongjin Gold and Shandong Gold Mining saw their net profit drop more than 80%, according to their exchange filings.
Earlier this year, Zijin completed the purchase of 50% in Barrick Gold Corp’s Porgera mine in Papua New Guinea. Barrick is the world’s biggest gold producer by output. A deal to acquire a 49.5% stake in Ivanhoe Mines’ Kamoa Copper Project in the Democratic Republic of Congo is expected to be completed by November.
Another deal announced in the June quarter was the intended takeover of Western Australian company Phoenix Gold which has assets in the world-class gold producing region of Kalgoorlie. The ASX-listed company’s resources have grown from 595,000 ounces to 3.80 million ounces since listing in 2010 and the reserve is now over 1 million ounces.
However, the Zijin offer for Phoenix is competing with another from Australia’s third largest gold producer Evolution Mining and Phoenix directors have recommended shareholders reject Zijin’s offer.