O gold, where art thou? A peek at what happens at the Porgera Joint Venture, an open pit and underground gold mine in Papua New Guinea. (Photo : Barrick Gold)
Taking advantage of the low prices of gold, Chinese companies look for gold mining prospects in other countries, reported The Wall Street Journal.
It’s an ideal time for Chinese gold miners to buy mines because, according to the report, “huge” debts and credit crunches beset various mining companies abroad.
Peter Grosskopf, chief executive officer for Canadian company Sprott Asset Management, told WSJ that he made talks with five Chinese gold companies, and all expressed their interest to venture abroad.
China will launch a new yuan-denominated gold benchmark on April 19, according to Asia Times.
The Bank of China, China Construction Bank, Agricultural Bank of China, and Industrial and Commercial Bank of China--all state-owned banks--will join the price-setting group.
China remains to be the top producer and consumer of gold in the world.
According to Hong Kong Census and Statistics Department, China’s gold imports in 2015 reached 992 tons. The biggest import it made so far was in 2013, at 1,495 tons, reported CNN.
Last year, Zijin Mining Group, as part of its “internationalization strategy,” ventured into two international projects, one in Congo and the other one in Papua New Guinea, according to its website.
It invested CA$105 million for a 9.9-percent stake in Vancouver-based Ivanhoe Mines, according to Ivanhoe’s website.
The two companies then signed an agreement for the Kamoa Copper Project located at Kolwezi District, Katanga, Congo.
Zijin bought a 49.5-percent stake for $412 million in the project, giving $206 million for the initial payment with the remaining half to be paid “in five equal installments.”
Beijing-based China National Gold Group Corp. discussed with Ivanhoe Mines its plan of buying a stake but nothing materialized, reported WSJ in 2013.
Zijin also acquired a 50-percent interest in the Porgera Joint Venture in Enga Province, Papua New Guinea, paying Toronto-based Barrick Gold $298 million, according to Barrick’s website.
The company announced on March 25 on its website its 74.30 billion yuan ($11.42 billion) sales revenue and net profit of 1.656 yuan ($254 million) for 2015.
In 2014, its sales revenue reached 58.76 billion yuan with a net profit of 2.345 billion yuan.
The company cites the “sluggish economy and plunging gold and commodity price” for the 29.40-percent decrease year-over-year.
Incorporated in Sept. 2000, Zijin Mining Group Co. Ltd. is “engaged in the exploration and development of gold, copper and zinc” and holds office at Shanghang County, Longyan City, Fujian Province.
