Zijin Gold acquires control of rival Chifeng in $2.6B deal

Zijin Gold is acquiring a controlling stake in Chifeng Jilong Gold Mining for 18.26 billion yuan ($2.64 billion), reinforcing its position as China’s largest gold producer.

The unit of Zijin Mining Group (HKG: 2899) will purchase existing mainland-listed shares and newly issued Hong Kong shares, lifting its interest to nearly 26% and securing effective control with full financial consolidation, the companies said. Chifeng sold about 14.4 tonnes of gold last year from operations in China, Ghana and Laos, compared with Zijin Gold’s 46.6 tonnes.

Zijin will get operational control of Chifeng, “further solidifying its position as China’s top gold miner,” Bloomberg Intelligence analysts including Michelle Leung said in a note. The target company, meanwhile, will “benefit from Zijin’s expertise to boost mining efficiency,” they said.

Zijin Mining has been on an acquisition spree, snatching up gold assets from Africa to Central Asia in recent months. On Friday, the miner reported a 62% increase in annual net income.