Chinese gold buyers rush to Australia

Featured Oceania - September 23rd, 2012
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China’s largest gold producer is seeking a majority stake at Australia’s Focus Minerals, the latest in a series of moves by Chinese producers to recuperate from the deficit back home, the Wall Street Journal reports.

Shandong Gold Group’s 51% stake in Focus Minerals’s operations will open up access to investments worth 227.4 Australian dollars (US$238.2 million). Focus’ shares managed a mild boost since the news and traded at 2.3% in the ASX. Focus Chairman Don Taig told the Journal that “directors will unanimously support the deal in the absence of a better offer”.

“I think we have a pretty good deal. You can always argue that you could get a larger premium, but we are focused on the long-term benefits,” Mr. Taig added. Shandong has also claimed that a full takeover is out of the picture. Mr. Taig said that the deal would allow Focus to explore its own M&A targets.

Several Chinese buyers have set their eyes on the Australian outback to satiate the country’s hunger for gold. Last month, China’s largest gold miner China National Gold Group Corp. announced a potential US$3.9 billion African Barrick Gold PLC acquisition. Zijin Mining Group Co. acquired more than 50% of Kalgoorlie’s Norton Gold Fields, the Journal reports.