China’s Zijin Mining Acquires Major Tibetan Mining Venture Amid Global Slowdown in Copper Production Caused by COVID-19
On June 7, China’s Zijin Mining Group acquired a majority 50.1% stake in Tibetan mining company, Tibet Julong Copper Co. for $548 million. The stake, acquired from Julong’s existing Chinese shareholders, offers Zijin access to three major copper mining assets in Tibet. One of these, the Qulong mine, is claimed to be the largest copper ore mine in China with estimated reserves of up to 10 million tons of copper ore. The mine also reportedly contains reserves of other critical metals, such as silver and molybdenum.
China is currently among the top producers of copper and is the largest global consumer of the metal. Zijin is the country’s largest copper processor. Globally, China also possesses the largest reserves of molybdenum and is the metal’s largest single consumer. Copper, molybdenum, and silver are critical components with wide ranging industrial applications that span across sectors including construction, engineering, and technology products. The three alloys also have critical defense sector applications.
The acquisition of Julong Copper is expected to alleviate the Qulong mine’s current financial difficulties and also boost Zijin’s resource base in a manner that will help the company hedge against supply disruptions prompted by the shutdown and/or slowdown of Chinese mining operations abroad caused by COVID-19. Zijin is also presently planning an initial public offering on the Shanghai Stock Exchange.