You are here

Chinese Gold Producers Looking For Overseas Mines To Buy

The Porgera gold mine in Papua New Guinea

Chinese gold mining firms are hunting for gold mines to buy as the current low gold prices mean miners can be had for low prices. China is the world’s largest consumer of gold, but unlike the way their counterparts in other commodities have, Chinese gold miners have previously not ventured aggressively overseas in search of assets.

In 2015, however, China’s gold production declined 0.4 percent compared to the previous year, while its gold consumption rose 3.7 percent. That supply and demand mismatch is now spurring the search overseas by several cash-rich Chinese gold miners for global mining assets to snap up.

Many gold mining firms are facing credit crunches and have huge debts. They might provide easy pickings for Chinese miners, who have lots of spare cash and a great deal of leverage in the current global economic situation. Successful buyouts could help China reduce its dependency on overseas producers for supplies and increase its influence in global gold markets.

Zijin, the Chinese firm that is now the world’s third largest gold producer, has been steadily increasing its overseas assets. Last year, it bought a 50 percent stake in the Barrick Gold entity that owns 95 percent of the Porgera gold mine in Papua New Guinea for $298 million.

Leave a Comment

0 Comments