Chinese miners eye Glencore’s Kazakh gold operation

Chinese firms Zhongjin Gold Corp., Shandong Gold Mining Co. and Zijin Mining Group Co. are said to be competing for Glencore’s (LON:GLEN) gold mine in Kazakhstan, which the miner and commodities giant put up for sale earlier this year.

Glencore may be seeking about $2 billion for its Vasilkovskoye mine, people familiar with the matter told Bloomberg.

The sale would bring Glencore closer to its target of cutting net debt to below $18 billion this year.

The sale would bring the Swiss mining giant closer to its target of cutting net debt to below $18 billion this year and it would follow similar recent moves, such as its decision to sell an almost 10% stake in its agriculture unit to Canada’s British Columbia Investment Management Corp. for $624.9 million in cash on Wednesday.

Gold is one of the best-performing commodities of 2016. The yellow metal has gained 18%, the best start to a year in in almost three decades. According to the World Gold Council, the rally has been almost entirely driven by investors in physical gold-backed exchange traded funds and large-scale futures speculators like hedge funds.

Vasilkovskoye’s gold output is pegged at roughly 350,000 ounces a year. A smaller gold mine Glencore used to own in Kazakhstan, Komarovskoye, was sold in April to Polymetal International for an initial $100 million.

Kazakhstan, the world's largest landlocked country by land area, is known for its riches.

According to data provided by the Embassy of Kazakhstan to the Canada, the Asian country holds the second largest uranium, chromium, lead, and zinc reserves, as well as the third largest manganese deposits and the world’s No. 5 copper reserves.

The country is also said to rank in the top ten for iron, and gold, it’s a well-known diamonds exporter and holds the 11th largest proven reserves of both petroleum and natural gas.