By Biman Mukherji
Chinese gold miners are aggressively scouting for overseas acquisitions, encouraged by historically low gold prices that could help them scoop up assets cheaply.
Though gold prices have risen by more than 16% since hitting a six-year low in December, the metal has still been trading close to levels last seen in 2010, in a range of roughly $1,220 to $1,240 a troy ounce.
China is the world’s largest gold consumer and producer, but only a few Chinese companies, such as Zijin Mining Group Co. /zigman2/quotes/203833875/delayed CN:601899 0.00% , have ventured abroad to buy mines, unlike their counterparts in industrial metals.
If cash-rich Chinese gold miners embark on an asset-buying spree, China could reduce its dependency on other international producers for supplies and increase its heft in global gold markets.
“China has five to six gold companies. I have been in touch with all of them, and they all have plans for increasing assets overseas,” said Peter Grosskopf, chief executive officer of Sprott Asset Management, a Toronto-based company that manages assets including physical bullion trusts.
He said the Chinese companies are well-capitalized and better positioned than their North American counterparts.