China National Gold Group Corporation
|Key people||Sun Zhaoxue, CEO|
|Net income||$84.72 million (2011)|
China National Gold Group Corporation (中国黄金集团公司) (CNGC or China Gold) is a centrally state owned Chinese gold producer with other areas of mineral business including refining of gold, silver, and copper, and production and retail of custom-designed gold and silver bars.
Besides its main mineral related business, the company also offers irradiation sterilization services to food, medical, and cosmetics companies in China, Hong Kong, and Macao. Subsidiaries are also engaged in contract engineering, import and export, and labor services for more than 40 overseas companies. China Gold also produces gold industry news publications and is the official news outlet for the Shanghai Gold Exchange and Shanghai Diamond Exchange.
The company began developing the Jiama gold and copper mine in Tibet in 2008, undertaking a $520 million investment that was then the largest mining project in the province. To maintain good relations with local communities, the company announced the hiring of 191 locals and stated 35% of the workforce was non-Han, the highest percentage of any mine in China. A landslide in March 2013 buried a worker's camp, killing 83 miners, two of whom were Tibetans. Government officials explained that the landslide was caused by a "natural geological disaster" rather than related to mining work. An article by The Economist questioned the building of a worker's camp in an area of hazardous geology.
In pursuit of additional gold mining assets, the parent company and its international development subsidiary, China Gold International Resources, is active in scouting for overseas gold mines. Explaining the acquisition strategy to the South China Morning Post, Song Xin, the chief executive of China Gold International Resources, stated the company was zealous in scouting for gold, copper, and silver mines across the world in both developed and developing countries.
The company has a joint venture with Banro, a Canadian gold mining company, to develop mines and the supporting electricity supply in the Democratic Republic of Congo. Preliminary talks between the miners were reported in April 2011 when the companies signed a non-binding memorandum of understanding (MOU). A Banro executive at the time of negotiations explained to Mineweb that the benefit of the project-level joint venture came from the financing infusion of China Gold which enabled construction to progress faster, move mining phases on line earlier and support for greater geological exploration.
The company made a bid at the end of 2012 for the Tanzania operations of Barrick Gold in a deal that would have exceed $2 billion. However the deal didn't go through because of disagreements that included the sharing of surprise tax increases levied by Tanzania to take advantage of the capital gains bonanza from a successful deal and indemnification for a past violent episodes between Barrick and villagers. Despite this setback, enthusiasm for deal making was reiterated in a September 2013 comment made by China Gold executive Jerry Xie to Reuters when he stated the company continued to look for big potential deals.
- "The price of gold". The Economist. April 6, 2013.
- Ng, Eric (April 9, 2013). "China Gold panning for overseas options". South China Morning Post.
- "Why Banro is looking for a Chinese dance partner in the DRC". Mineweb. 22 April 2011.
- "Barrick Gold Ends Chinese Talks to Sell African Unit". Bloomberg. January 8, 2013.
- "For the next round of gold deals, small is beautiful". Reuters. September 27, 2013.