China mining giant set to add to $1bn in deals
Zijin Mining Group, the world's biggest gold producer by market value, will press ahead with mine acquisitions to improve its portfolio quality, adding to the $1bn of deals it agreed in the past year.
"We will not stop," vice president George Fang said yesterday in an interview in Kalgoorlie, Western Australia. "In terms of how much we will need to spend, that depends on the opportunity and on the funding strategy."
While China is the biggest producer of gold, it lacks large individual mines, which means producers including Zijin are searching overseas to add operations, said Greg Foulis, chief executive officer of Kingsgate Consolidated, which operates mines in Thailand and Australia.
"China's gold mines are very small on a world scale," Mr Foulis said. "If Zijin wants to be a global gold miner, it needs to operate global gold mines."
Gold producers proposed or completed deals valued at $9.6bn in the six months to June 30, up 7pc on the previous half, as asset prices fell in the wake of tumbling bullion prices. The metal fell to $1,077.40 on July 24, the lowest level in five years.
Growth in demand for gold in China, also the biggest consumer, will continue to rise as the nation's middle class swells by about 500 million people in the next five years.
Mr Fang declined to comment on whether Zijin had discussed a potential acquisition of a stake in Kalgoorlie's Superpit, Australia's largest open-pit mine. (Bloomberg)