This article first appeared on GuruFocus .
China's Zhaojin Mining Industry Co. ( ZHAOY ) is looking for a larger role in the global gold M&A cycle as prices for the precious metal remain near the center of investor attention. Chief Investment Officer Xu Jianzhuo said the Shandong-based miner is seeking to acquire more gold mines in Africa and other regions, with a focus on West African countries that have stable political regimes, including Cote d'Ivoire, Ghana and Guinea. Xu noted that European and US miners are exiting some of these markets, potentially creating acquisition openings for Zhaojin. The company is also looking at projects in Central Asia and the Asia Pacific, suggesting its overseas expansion strategy could move beyond Africa as consolidation across the gold industry continues.
The backdrop for Zhaojin's search is a gold sector where miners globally have become more active in acquisitions after the metal rallied to successive records. Chinese firms have also joined that race, with Zijin Mining Group Co., Zhaojin's largest domestic peer, buying Allied Gold Corp earlier this year to expand ownership over mines in Mali, Cote d'Ivoire and Ethiopia. Xu said the industry remains fragmented, creating opportunities for consolidation, and he expects that trend to continue for the foreseeable future. He also pointed to another possible source of deals: miners that spin off non-core assets after completing M&A transactions, which could then be acquired by Chinese companies. Xu said gold M&A activity is very active at the moment and that the trend could become stronger, even with gold prices still high, as companies continue to pursue scale.
Zhaojin has already taken a meaningful step overseas through its 2024 acquisition of assets in Cote d'Ivoire, where the Abujar mine is on course to produce 4 to 5 tons of gold this year, meeting earlier guidance, according to Xu. He also said the recent gold-price pullback tied to the Iran war is likely temporary, as major drivers including central bank buying and diversification away from the US dollar remain intact. Beyond gold, Zhaojin has added copper to its asset portfolio for the coming years, though Xu said the company will approach any copper acquisitions cautiously because of the high capital expenditure associated with mining the industrial metal. The company is interested in relatively small copper projects in southern African countries such as Namibia and Botswana, while Zhaojin's shares have rallied more than 50% over the past year in Hong Kong.
