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China’s Zijin Mining Group Co said on Sunday it would pay 3.88 billion yuan ($548 million) to acquire a majority stake in a mining firm with rights to two copper deposits in Tibet.
Best known as a gold miner, Fujian-based Zijin will pay cash for the 50.1% stake in Tibet Julong Copper Co Ltd, operator of the Qulong mine, one of China’s biggest copper deposits, and the Zhibula mine.
The move is aimed at boosting the company’s resource base and achieving sustainable development, Zijin, which is also a major smelter in China, the world’s top copper consumer, said in a filing to the Shanghai Stock Exchange.
Zijin’s move to take over a large domestic mine comes as copper smelters fret over raw material supply due to coronavirus-related mine closures
Its move to take over a large domestic mine comes as copper smelters fret over raw material supply due to coronavirus-related mine closures around the world.
Zijin is buying the stake from a number of shareholders in Tibet Julong Copper, including Zangge Holding – controlled by billionaire Xiao Yongming – which will retain 24.9% in the venture.
The Qulong mine, for which Tibet Julong’s licence runs until 2037, can produce 30 million tonnes of ore annually, the filing said, adding that the smaller Zhibula mine can produce 1.2 million tonnes a year.
Tibet Julong’s mining rights for Zhibula expire in September but it is in the process of renewing them, Zijin said.
Both mines also contain molybdenum and silver, according to the U.S. Geological Survey.
The sellers will be granted compensation if the Phase 2 150,000-tonne-per-day mining and ore processing project at Qulong fulfils conditions set out in the sales agreement, Zijin said in the filing, without elaborating.
(By Tom Daly; Editing by Jason Neely)
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