Zijin Mining Expands Overseas Mines
Zijin Mining Expands Overseas Mines
By David Harman
17th April 2007
SHANGHAI (Interfax-China) -- Zijin Mining Corp, one of China's largest gold miners, has been developing overseas projects rather than domestic projects in the past two years and intends to further develop overseas mines in the next few years, the company's vice president Lan Fusheng, said in the 2007 Asia Nonferrous Metals Investment Dialogue held in Shanghai yesterday.Zijin Mining is currently involved with three overseas mining projects, including the Rio Blanco copper mine in Peru, a laterite nickel project in Burma and the Blue Ridge Platinum Mine and Sheba's Ridge polymetallic mine in South Africa.
In order to obtain Monterrrico's Rio Blanco copper project, a consortium, co-established by Zijin Mining, Tongling Nonferrous and Xiamen Construction and Development Inc., will offer GBP 94.6 million ($12.25 million) to acquire a 54.19% stake in Monterrico, a London-listed copper miner. The purchase will complete by next Friday.
The Rio Blanco copper mine is located in the Northern Peru province of Piura, close to the Ecuador border and contains deposits of 1.257 billion tonnes of 0.57% copper and 228 ppm molybdenum. The mine might produce 200,000 tonnes of copper concentrate and 2,900 tonnes of molybdenum concentrate per year once the mining project comes into stream, Lan said.
Zijin Mining purchased a 29.9% stake in London-listed Ridge Mining last September for RMB 123 million ($15.93 million), through an additional share and warrant issuance, enabling Zijin Mining to take part in the development of Blue Ridge and Sheba's Ridge.
Blue Ridge mine contains proven mineral reserves of 51.1 million tonnes, among which 166 tonnes are platinum, palladium, gold and silver reserves. Sheba's Ridge mine contains nickel reserve of 1.40 million tonnes, platinum related reserves of 596.75 tonnes, and copper reserves of 540,000 tonnes.
Ridge Mining stock closed at GBP 1.17 ($2.33) per share on the London Stock Exchange's AIM market last week. Zijin Mining purchased the 16 million shares at GBP 0.45 ($0.90) per share last September.
Zijin Mining is currently cooperating with China North Industries Group (North Industries) to explore a laterite nickel mine in the Union of Myanmar. Zijin Mining and North Industries both hold a 50% stake in the joint venture called Jinbao Mining Industry Co.
The laterite nickel project is currently undergoing a feasibility study and contains proven nickel reserves in excess of 10 million tonnes at an average grade of 1.5%.
According to Lan, Zijin Mining is also involved in other mining projects overseas, including gold, lead and zinc mines in Russia, a gold mine in Mongolia and mines in Vietnam.
Other Chinese nonferrous metals producers who own overseas mining projects include the Aluminum Corporation of China (Chalco) and Hunan Nonferrous Metals Group.
"We are encouraging the majority of domestic nonferrous metal producers to focus on domestic mines rather than overseas mines for the time being, as there are still mines to be developed in Western China as well as under-developed mines in central and Eastern China. Moreover, overseas mine development is inherently difficult and risky," a senior official at the Industry Development Research Institute of National Development and Reform, named Hu Chunli, said upon questioning.
Authorities have been calling for greater foreign participation in local mine development citing under utilized reserves. All well and good for future prospects.
However, it stands to reason that industry is in need of raw materials now and must secure resources that are already at the production stage.