China National Gold Group Corp. is angling to buy up Barrick Gold Corp.’s (TSE: ABX) African operations in another sign that China, the world’s largest consumer of commodities, is intent on acquiring African assets.
Barrick has a 73.9 percent stake in African Barrick Gold PLC (LON: ABG). UBS AG (NYSE: UBS) is advising the process, but there isn’t any guarantee that the Chinese company will make an offer yet.
China currently has around $3.2 trillion in foreign-exchange reserves and has been utilizing that to buy plenty of overseas assets. Primarily, they’re focusing on energy and commodity resources in order to meet an ever-escalating domestic demand.
Back in July, the country’s Zijin Mining Group Co. (HKG: 2899) was seeking to acquire African copper projects. Minmetals Resources Ltd. (HKG: 1208), another Chinese firm, acquired Australian Anvil Mining Ltd. (ASX: AVM) for $1.3 billion in March; the deal resulted in China gaining a copper mine in the Democratic Republic of Congo.
News of this Barrick affair sent African Barrick up 14 percent on Thursday. African Barrick has experienced some problems since its spinoff from parent company Barrick Gold, with fluctuating production targets and low annual outputs.
Slowdowns in global growth have resulted in sluggish times for the gold industry, though Barrick has expressed confidence in its African Barrick operations.
Barrick was up 0.17% on Friday morning to $35.66.