Last Updated :
06 January 2010 at 17:25 IST
Gold buying frenzy grips China
Major gold producers in China have also come out with better output numbers. Zijin Mining Group Co Ltd, China National Gold Group Corporation, Shandong Gold Group Co Ltd, Shandong Zhaojin Group Co Ltd and Lingbao Gold Company Ltd together produced 112.19 tons of gold in the first 11 months of 2009, up 13.5 percent from the same period of 2008.
The soaring gold price has also driven up stock prices of gold miners. Zijin, the largest gold producer in China, closed at 9.64 yuan on the last trading day of 2009, marking an almost 50 percent gain in a year.
The changing industry landscape has also helped the industry to make rapid strides. Many of the small mines were merged into the cash rich bigger firms who also have the right technologies to mine low-grade ores. The exercise also helped spur more investments in exploration, said Zhang.
Chinese miners are also eyeing overseas resources to expand their footprint. The latest move is Zijin's $498 million takeover offer for Australian mining company Indophil Resources in November, a deal that will help secure copper and gold mining assets in the Philippines.
In December, another proposal to buy gold mines in the US made by China's Northwest Nonferrous International Investment Co Ltd offer was blocked because the target mine was in the proximity of a military base.
"With household income increasing, Chinese consumers are buying more jewelry and investing in gold assets. All of these are boosting gold demand," Zhang Bingnan, general secretary of China Gold Association told China Post.
Chinese miners are also eyeing overseas resources to expand their footprint to meet the rising domestic demand. The latest move is Zijin's $498 million takeover offer for Australian mining company Indophil Resources in November, a deal that will help secure copper and gold minig assets in Phillippines.
David Lew is a precious metals commentator with Commodity Online. You can contact him at info@commodityonline.com
NCDEX STEELLONGJUN12 20 June 2012
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