China’s biggest mining company Zijin Mining Group is acquiring Canadian miner Allied Gold in an all-cash deal valued at about C$5.5 billion (US$4 billion), the first major cross-border transaction after Beijing and Ottawa recently reset ties after years of diplomatic strain.
Zijin Gold International, a Hong Kong-listed subsidiary of Zijin Mining, agreed to buy all issued and outstanding shares of Allied Gold for C$44 per share, according to a joint announcement on Monday. Zijin Gold’s shares rose 6.4 per cent to HK$44.82 on Tuesday.
“The [acquisition] will significantly strengthen the competitive positioning of Zijin Mining’s gold segment, driving substantial growth in its mine-produced gold output,” Zijin Mining and Zijin Gold International said.
The transaction is subject to shareholder, court and regulatory approvals in Canada, China and other jurisdictions.
Gold crossed US$5,100 an ounce for the first time on Monday. Photo: Shutterstock
The announcement follows Canadian Prime Minister Mark Carney’s recent visit to China – the first by a Canadian leader since 2017 – during which he met President Xi Jinping and signalled a desire to stabilise relations that had been strained for years. Carney also said Canada was not pursuing a free trade deal with Beijing but was seeking to reduce its economic reliance on the US.
Amid the strained ties, Canada had tightened scrutiny and restrictions on Chinese investments in the mining and critical minerals sectors, citing national security concerns.