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China’s largest gold mining company, China National Gold, is officially setting up shop in junior mining hub Vancouver this week as part of a push into new markets and its global acquisition strategy.
President Xin Song told the Wall Street Journal ahead of Wednesday’s event, the Beijing-based firm is on the hunt for global acquisitions and partnerships in gold, silver and copper:
“The growing strategy is very clear, we are going out looking at things globally. On our hands we have a few opportunities, at different stages.”
Song, who also chairs the China Gold Association, has not ruled out acquisitions in developed countries, such as Canada, Australia and the US, but the main focus of its expansion strategy is assets in the region including in Mongolia, Russia and countries in central Asia.
Investments in “politically stable” countries in Latin America and Africa are also being considered Song said.
Rumours were circulating last year that China Gold could buy into Ivanhoe Mines, Robert Friedland’s latest creation with copper projects in the Democratic Republic of Congo and platinum mines in South Africa.
Song told the paper China Gold has a long relationship with the billionaire mining financier:
“We keep a hotline” open with the entrepreneur, he said. “But we need to figure what the advantage points where we can work together. Just like a marriage we have to know the common benefit.”
China National Gold also confirmed recent talks about potential partnerships with Barrick Gold, the world’s top listed gold producer.
Song said at the moment these opportunities are not likely to include an investment in the giant Pascua Lama project straddling Chile and Argentina. Barrick stopped construction of Pascua Lama in October as part of its debt-reduction program and after fierce opposition from local communities and environmental groups.
The Toronto-based miner has already spent $5 billion on the project which could have a final bill in excess of $8.5 billion after a series of cost overruns.
Image of Ao, a giant turtle in Chinese mythology, outside Zhaoyuan, China’s official city of gold, located in Shandong province.
2 Comments
Daniel Miranda
This article is incorrect. Pascua Lama was not stopped due to fierce opposition from Communities and environmental groups. They were stopped because they consistently breached their EIA requirements over a very long period of time. What is amazing is that they were doing it on the Chileno side but more so on the Argentine side. They knew they were doing it but continued. Maybe the Chinese will have better luck with Barrick, but the Chinese are not renowned for complying with environmental requirements or successful project execution. They might be a perfect match for each other.
Kirill Klip
Great article, Frik.
Lumina Copper buyout by First Quantum Minerals has already re-rated valuations in the mining sector of Argentina and this pick up in M&A activity will signify the major bottom in this mining cycle, as we have discussed before. It is very important that money is coming in the large CAPEX Copper project particularly in Argentina, where our Los Azules Copper project is located. I hope to share with you industry research reports on Los Azules copper in the nearest future – this activity should awaken the sleeping analysts. We are working with PI Financial on the Sale of our Back-In Right and below you can find the big picture view on Copper provided by Derek Hamil in his very well researched article:
http://kirillklip.blogspot.co.uk/2014/06/tnr-gold-los-azules-back-in-right-multi.html#