China’s Zijin Mining looks to purchase gold projects in Africa

18 August 2014 (Last Updated August 18th, 2014 18:30)

China's largest gold miner Zijin Mining is planning to spend $1.3bn on buying further assets in Africa this year, to meet its production targets.

China's largest gold miner Zijin Mining is planning to spend $1.3bn on buying further assets in Africa this year, to meet its production targets.

Zijin Mining CEO Wang Jianhua was quoted by Bloomberg as saying: "We are seeing some buying opportunities in Africa and are examining related infrastructure development and geopolitical risks there.

"What we are interested in buying are those on the world gold mining belt with big sizes."

The company is eyeing gold projects with more than 100t of metal reserves and copper projects containing more than one million tonnes of reserves.

"Zijinshan will undergo a transitory period towards copper mining, but the profitability of copper does not necessarily have to be less than that of gold."

Zijin Mining will also seek help from overseas firms to finance the acquisitions. The decision came after the comapny's Zijinshan mine, which produces 32% of its total gold output, reported a 4.2% fall year-on-year in the first half of this year.

When compared to the 2012 first half results, the company's output fell by 38%, due to the declining gold content in the ore from Zijinshan mine.

Jianhua was quoted by South China Morning Post as saying: "With this in mind, we will focus our effort in the second half on technological and internal management improvement, as well as developing new large-scale projects.

"In the next few years, Zijinshan will undergo a transitory period towards copper mining, but the profitability of copper does not necessarily have to be less than that of gold. The key is a good understanding of the resources."

Despite a fall in the production rate, the company has not changed its annual gold output target of 34t from its own mines and the annual copper output of 140,000t.

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