Chinese miners on the run in Ghana

By Adam Nossiter and Yiting Sun
The New York Times 

DAKAR, Senegal — The lucky ones have hidden out on cocoa farms and in Chinese-owned companies, surviving on yams and water, moving about constantly and trembling at the prospect of being discovered by Ghana’s security forces. The unlucky ones have been beaten, robbed and swept up by soldiers.

A dream of wealth in a far-off land has been turned on its head for hundreds of Chinese gold miners in Ghana. At least 169 of them were rounded up by the government this month, accused of sneaking into the country and overstaying visas to illegally mine one of Africa’s richest gold fields.

“We have no food, no water, no sleep,” a Chinese migrant said as she hid from the government on a cocoa farm late last week, adding that more than 100 others were there too, fearing arrest. Now the group has fled again, she said, hoping to make it safely back home. “Everyone is scrambling for a way to go back to China.”

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Mainland Chinese buy billions in gold

Drop in gold price in Hong Kong sparks investor sell-off but attracts buyers from mainland

By Tiffany Ap
South China Morning Post 

The scene in Hong Kong at each of the four Chow Tai Fook stores dotting Causeway Bay’s Hennessy Road was the same: a rush of buyers snapping up jewellery, coins and other gold items.

Gold investors elsewhere around the world were dumping the precious metal last week as it dropped to its lowest price in three decades. However, buyers in Hong Kong, particularly those from the mainland see value – they have been swooping on Hong Kong jewellery shops to buy at what they perceive are bargain prices.

A woman from Zhejiang braved the rain to scurry between several jewellery chain stores within a stone’s throw of each other. She was in the market for gold necklaces and bracelets, which she plans to give to her daughter when she marries.

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China’s Zijin buys depressed mine shares

By Eric Ng
South China Morning Post

Zijin CEO Chen Jinghe

Zijin Mining aims to complete one or two acquisitions this year and warned that the unit production cost at its mainstay gold mine will continue to rise owing to the deteriorating grade of ore.

Fujian province-based Zijin, the mainland’s largest gold producer, sees acquisition opportunities arising as stock market valuations of firms in the industry remain depressed.

“Many gold miners’ shares have tumbled more than 50 per cent in the past two years although the gold price has not changed much,” said Zijin chairman Chen Jinghe.

“As long as prices are reasonable, we will strive to complete one or two acquisitions.”

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See also: “Chinese miners going global for gold”

Chinese investment in African mines

Another major Chinese acquisition could have been African Barrick Gold, Tanzania’s largest gold mining concern, had talks between China National Gold Corporation and Canadian Barrick Gold Corporation over a $3.9 billion deal not collapsed in January.

By Andrew Moody
Peoples Daily Online 

Chinese investment in African mining industry comes in different forms and is crucial for both.

The relative slowdown in China’s economy was one of a number of factors casting a shadow over the recent Mining Indaba Conference in Cape Town. The mining sector in South Africa has other problems closer to home, including labor unrest and the threat of increasing government regulation.

But the demand for resources from the world’s second-largest economy — as for the rest of the continent — remains an important lifeline for the mining industry.

The sector has been hit hard by the global financial crisis, and the Johannesburg Stock Exchange remains highly sensitive to economic data coming from China.

Last year was particularly bad for the iron ore industry, with prices slumping to a three-year low in September to $88 a ton on fears about China’s recovery.

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China maps Venezuela’s mining resources

Inter Press Service

Rafael Ramírez

An agreement signed by the government of Venezuela and the Chinese state-owned company Citic Group for prospecting and mapping the country’s mining reserves is being challenged by both the opposition and experts who argue that it will leave valuable natural resources dangerously exposed.

Oil and Mining Minister Rafael Ramírez said “the mining map will be used to explore, confirm and quantify the country’s mineral resources” and, over the five years in which the agreement will be implemented, some 400 Venezuelan engineers will be trained “to serve as custodians” of the data compiled by the Chinese consortium.

So far the Venezuelan government has said nothing about how the knowledge gathered by China — the world’s largest consumer of raw materials — will influence future mining decisions and whether it will entail benefits or advantages for the Citic Group.

But simultaneously with the prospecting agreement, Citic Group was awarded a concession to operate the group of gold mines Las Cristinas, which has already seen several operators since Hugo Chávez took office in 1999, including the Canadian companies Placer Dome, Vanessa Ventures and Crystallex, and the Russian company Rusoro.

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China is not buying gold out of sentiment

By Emmet Kodesh
Seeking Alpha 

Someone recently dismissed buying gold as a fruitless matter of sentiment. This kind of “hard-bitten” practicality, familiar from Warren Buffett in recent years, is a gram of sense wrapped in ignorance. The Chinese generally are not sentimental people; those who operate the government of China have even less sentimentality. Yet the Chinese Central Bank has been buying 40 to 70 tons of gold monthly for the past two years, perhaps more. It is unlikely that they are ditching and hedging their “junk bond” Treasuries out of sentiment.

It also is not sentiment that leads them to conceal their official, for-the-record holdings of gold since 2009. They certainly have a stake in seeing the price of gold lag the markets to ease their continuing and increasing accumulation (about 66 tons/month in 4th quarter 2012).

Other nations buying gold in the past year and more include Brazil, Paraguay, Iraq, Venezuela, Turkey, South Korea, the Philippines and Mexico. Those who run Central Banks are many things but in their public function they are driven by power and gain, not sentiment. Radical devaluation of major currencies (the G8 and G20 are meeting to decide how to massage their race to the bottom) and central Bank suppression of interest rates in Europe and America has created a massive debt bubble and flight of institutional assets into markets whose out-performance is increasingly remote from structural and surface economic maladies. So bankers, strong hands and ordinary folks buy gold.

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China investment in Canada increases

The Canada Press

Guy Saint-Jacques

Canada’s ambassador to China says money from the Asian country is likely to keep pouring into Canadian resource projects.

But Guy Saint-Jacques also says he thinks those dollars will increasingly flow into mining and forestry as well as energy development.

“I expect that the interest will increase on the mining side,” he said in an interview with The Canadian Press after speaking to an audience at the University of Alberta on Monday.

“What I expect also is maybe they will start to get interested in the forestry sector. There’s already investment in pulp manufacturing. I think they are starting to look at potential minority participation in a number of companies.”

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Interview: African Barrick Gold’s Hawkins

By Emma Rowley
The Telegraph (UK)

Greg Hawkins

Not many companies get more popular when their share price plummets. Still, more than a few people are pleased that a Chinese rival has walked away from African Barrick Gold, the FTSE 250 gold miner.

Last August, Canadian mining giant Barrick Gold, from whose African assets ABG was formed, confirmed it was talking to state-owned China National Gold about selling its 74pc stake in ABG.
However, early this month the deal was taken off the table, disappointing hopes of a sale. But, says Greg Hawkins, ABG chief executive, at least it may have improved the company’s relationships on the ground in Tanzania.

“It didn’t really matter who it was,” he says, with reference to the Chinese bidder. “There was concern about what would be the security going forward and, for the community, does it all change? A new owner, what does it mean? So, all of a sudden, we became quite popular.”

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Gold market turns to China for support

By Tim Iacono
Seeking Alpha

Precious metals were pressured early last week (1/7/13-1/11/13) on continuing fallout from the release of Fed meeting minutes; the week before that, traders thought it might lead to the central bank tightening policy sooner than expected. However, lower prices once again spurred buying in Asia, where gold trading in Shanghai rose to record levels in advance of the Chinese New Year and a weakening yen led to record high gold prices in Japan, while, in the U.S., gold and silver coin sales surged.

Late in the week, better-than-expected trade figures from China spurred hopes of stronger demand for raw materials, leading to a precious metals advance. This persisted until higher-than-expected inflation in China was reported on Friday, prompting buyers to turn into sellers on fears that rising prices may limit the government’s ability to provide more stimulus for the world’s second-largest economy that now appears to be rebounding.

But, without a doubt, the most important gold-related news to emerge from China last week was of surging gold imports. As has been the case over the last year, demand from China is likely to play a key role in supporting metal prices and, eventually, pushing prices up and out of their recent trading range.

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Chinese miners going global for gold

By Zhang Boling
Caixin Online

At every juncture, conversations among gold mining executives at the recent China Mining Conference in Tianjin turned toward a single topic: The quest for gold mines overseas.

Owning a mine on foreign soil “primarily can increase (a mining company’s) gold reserves and make it more self-sufficient in terms of raw materials, to improve profitability,” said Zhang Bingnan, secretary-general of the China Gold Association. “Second, gold prices are expected to go higher.”

And executives at the November conference could point to a pair of recent deals as sterling examples of opportunities taken – and success for each company. In August, Jinyu (H.K.) International Mining Co., a subsidiary of Zijin Mining Group Co. Ltd., purchased a more than 50 percent stake in a valuable Australian mine.

Zijin’s deal for Norton Gold Fields Ltd., one of the largest in Australia, was the first-ever buyout of a major overseas gold mine by a Chinese company. Terms were not disclosed.

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