(Adds comment from Zijin executive)
HONG KONG/TORONTO, May 27 (Reuters) - China’s Zijin Mining Group , which announced two acquisitions on Tuesday for more than $700 million, believes now is the good time to buy overseas assets as the mining sector is weak, a senior executive said on Wednesday.
“In terms of acquisitions, now is the low level (of prices), good opportunity,” the Zijin executive told Reuters.
The two acquisitions are shares in Barrick Gold’s unit and Ivanhoe Mines’ copper project.
The executive said gold and copper were the focus of the company’s overseas assets. It bought the projects now because weak prices provided “good” prices for acquisitions, which also was in line with China’s “One Belt, One Road” policy on overseas investment, he added.
Zijin did not consider consolidating overseas assets for an IPO currently, though that was possible in the future, he said.
When asked whether Zijin would continue to seek buying opportunities in overseas copper and gold mining assets, the executive said “depending on the opportunity.”
Barrick Gold Corp said on Tuesday it has forged a strategic tie-up with Zijin Mining Group Co and agreed to sell the Chinese miner a stake in a mine in Papua New Guinea as a first step toward further collaboration.
Toronto-based Barrick, under the stewardship of Executive Chair John Thornton, has since 2013 vowed closer ties with the Chinese, as it attempts to reduce its debt load and cut capital expenditure risks around the development of large new projects. (reut.rs/1EuSi1q)
The tie-up with Zijin may take some of the heat off Barrick and Thornton, who since joining the board in 2012 has twice come under fire from investors for receiving large bonuses at a time when Barrick’s share price languished around all-time lows.
“It will be interesting to see if the partnership with Zijin as that company tiptoes out into international mining, can create additional value,” said J.P. Morgan analyst John Bridges in a research note.
Barrick, the world’s largest gold producer, said Tuesday it would sell 50 percent stake in its unit that manages the Porgera gold mine in Papua New Guinea to Zijin for $298 million in cash. The unit, Barrick Niugini, owns 95 percent in the Porgera mine and the Papua New Guinea government owns the rest.
The deal, a part of Barrick’s plan to reduce net debt by at least $3 billion by the end of the year, comes a day after it sold its Cowal gold mine in Australia to Evolution Mining for $550 million.
Zijin and Barrick will jointly control Barrick Niugini after the sale, which is expected to be completed in the third quarter, the Canadian miner said on Tuesday. (Reporting by Polly Yam in HONG KONG, Euan Rocha in Toronto, Nicole Mordant in; Vancouver and Sneha Banerjee in Bengaluru; Editing by Kirti Pandey, W Simon and Michael Perry)