China’s Zijin inks deals with two Canadian firms on the same day
The deals will see Zijin help Barrick and Ivanhoe advance their respective projects in Papua New Guinea and the Democratic Republic of Congo.
- The Chinese miner is paying $298m for a joint venture with Barrick Gold where each company will own 47.5% of Porgera, a gold mine in Papua New Guinea.
- Under the $412 million deal with Ivanhoe Mines, Zijin will buy through its subsidiary, Gold Mountains International Mining Company Limited, a 49.5% stake in Ivanhoe’s subsidiary Kamoa Holding Limited, which currently owns 95% in the Democratic Republic of Congo (DRC) Kamoa copper project.
But perhaps the most important aspect of today’s agreements is the fact that both aim to form long-term strategic partnerships to collaborate on further ventures, opening new markets for all the firms involved.
Barrick’s Chairman John L. Thornton, couldn’t have summarized the significance of these deals better:
“A twenty-first century mining company with global reach and the intention to become an industry leader must, by definition, have a distinctive relationship with China,” he said in today’s statement. “China has become both the largest producer and consumer of gold, and a major source of capital and expertise for the mines of the future.”
Zijin, which besides gold also produces copper and zinc, acquired in March a 10% ownership in Ivanhoe for about $85 million. At that time, Ivanhoe Executive Chairman Robert Friedland said the two companies were in “detailed, friendly discussions about the strategic co-development of our Kamoa copper discovery.”
According to a preliminary economic assessment, Kamoa’s first phase of development is estimated to cost about $1.4 billion. Ivanhoe said it has invested about $337 million to date on discovering and developing the project.