TORONTO ? Some of the global gold market is retrenching, one of China’s leading producers is constantly on the eye big global growth.
“We wish to become a global leading company,” George Fang, executive director of Zijin Mining Group Co. Ltd., told an audience in the Prospectors and Developers Association of Canada (PDAC) conference in Toronto.
It was a rare public appearance outside China for a Zijin executive, although the firm continues to be making headlines around the world because of its aggressive expansion strategy.
State-owned Zijin, formed in 1993, continues to be looking abroad for gold and copper acquisitions for over a decade, but is a very active buyer over just the last few years.
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In December 2014, the organization unveiled an $81 million purchase of Canadian miner Pretium Resources Inc. As well as in May of this past year, Zijin announced two very big investments in Canadian companies. It gave Barrick Gold Corp. US$298 million for a stake in the Porgera mine in Papua New Guinea, and gave Ivanhoe Mines Ltd. US$412 million for any stake within the Kamoa copper project in the Democratic Republic of Congo. Those transactions instantly made Zijin a substantial global player.
The two deals come in a challenging here we are at Western mining companies to boost capital on favourable terms. Zijin is following in the footsteps of numerous other Chinese resource firms over the past decade, which took advantage of drops in commodity prices to invest billions of dollars in companies around the globe.
Many of these Chinese firms have encounter problems with their overseas investments, partly because they have struggled to adjust to business environments outside China. Fang stressed that Zijin wants to learn from its partnership with Barrick in order to be a better global company. The two miners intend to co-operate on future investments.
Fang spoke included in a China-focused session in the PDAC conference. Among the key themes was that Chinese firms have to adjust to the local environments in which they operate in to succeed. Michael Laffin, someone at Blake Cassels & Graydon LLP, said they ought to concentrate on retaining and empowering good local employees, delegating some authority and upholding best practices in the local country.
“Tackling the cultural issues is crucial,” he said.
While Zijin is better known outside of China because of its acquisitions, it has faced lots of criticism within the country because of its environmental practices. Especially, it was blamed for a massive toxic spill this year that reportedly released more than 9,000 cubic metres of acidic waste into a river.
pkoven@nationalpost.com
Twitter.com/peterkoven
