Chinese investors are strengthening their positions in the African gold mining sector, which takes place by the acquisition of some leading local players and acceleration their activities in the region, according to recent statements, made by representatives of the companies and some local media reports.
As part of this, several days ago, Shandong Gold, the China’s second largest gold producer, completed the acquisition of Cardinal, an African gold miner with the assets in Ghana from its previous major shareholder – the Russian Nordgold 0 the company, which is owned by the Russian billionaire Alexey Mordashov.
Currently the Cardinal's key asset is the Namdini project, which is located in the northeastern Ghana. The company also owns several projects nearby and one in another part of Ghana. According to the official website of Cardinal, Namdini reserves are estimated at 5.1 million gold ounces.
The Namdini mine is located in close proximity to the Burkina Faso border, the country, which largest gold mines Moz Bissa and Moz Taparko (with the reserves of 4,7 million and 1,22 million ounces re) are controlled by Nordgold.
In addition to the African region, the Russian company also has projects in Russia, Kazakhstan, French Guiana and Canada. According to the results of the third quarter of this year, total gold production by Nordgold amounted to 264.900 ounces, which is 10% less than in the same period last year. According to estimates of the Union of Gold Producers of Russia, Nordgold currently remains one of Russia’s largest producers of gold in Russia.
In the meantime, Russian analysts in the field of mining believe, the conduction of gold mining activities in the African region is rather complex for domestic companies, taking into account the existing political risks in this region. In addition, strengthening of positions of Chinese investors region may in the future lead to problems with the supply of raw materials and equipment for the needs of Russian gold mining business in the region.
By: Eugen Gerden