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Chinese mining companies line up for $2bn Vasilkovskoye gold mine

A Chinese gold mining company is currently the leading bidder for Glencore Plcs Vasilkovskoye gold mine, after the Australian mining company announced i...

Dale Benton
|Sep 27|magazine9 min read

A Chinese gold mining company is currently the leading bidder for Glencore Plc’s Vasilkovskoye gold mine, after the Australian mining company announced it was exploring sale options in August this year.

Shandong Gold, one the largest gold producers in China, is reported to be the highest bidder in the sale of the mine which could bring around $2 billion in revenue for Glencore.

Other reported bidders include Zhongjin Gold Corp and Zijin Mining Group – one of China’s largest gold producers.

Glencore is looking bring its net debt below $18bn with a target of $15bn by the end of 2017.

While Shandong Gold is believed to be the top bidder, Glencore has made no decisions as of yet and is still examining the options, which may even see the company retain the asset.

Here’s what we know about the potential buyers:

Shandong Gold:

  • Established in 1996, Shandong Gold Group was converted into a state-owned capital investment company directly under the Shandong Provincial Government in 2015
  • The trophy shelf at Shandong is quite crowded, with wins in the “National May Day Labor Award”, the “China Charity Award” as well as ranking second in “China’s top 100 listed companies (Golden Bull Award)”
  • Shandong Gold’s the strategic objective is to see the company “taking the lead in China's gold production enterprises and ranked top ten in terms of the overall strength in gold mining industry”.

 

Zhongjin Gold Corp:

  • Zhongjin Gold Corp was established in 2000 by the China National Gold Group Corporation
  • In 2003 Zhongjin became the first company with a public offering of RMB 100 million ordinary shares, and was listed on the Shanghai Stock Exchange becoming known as “China's first gold."
  • The company focuses on gold, non-ferrous geological exploration, mining, smelting investment and management
  • It prides itself on the production of high purity gold
  • In its 16-year life, the company has racked up 48 awards, with the most recent being listed amongst China’s “top ten listed companies” and the China hundred enterprises award

 

Zijin Mining:

  • Zijin Mining started life at the Zijinshan Gold Mine in 1993
  • Zijin went public in Hong Kong Stock Exchange in December 2003 and then got listed in Shanghai Stock Exchange in April 2008.
  • Its core asset Zijinshan Gold & Copper Mine was rated as China’s largest gold mine by China Gold Association in March 2008
  • Zijin has invested in over 20 provinces across China and 9 countries, with operations in gold, copper, lead and zinc, tungsten, iron ore and other base metals.
  • It is one of China’s largest mined gold producers, second largest mined copper and zinc producer, as well as a major producer of tungsten and iron ore
  • During 2000 - 2014, the company has donated RMB 2.14 billion for public charity

 

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