China moves to dominate gold market by acquiring Brazilian deposits
Gold bars (Illustrative photo: Getty Images)
China is making a major move to control the global gold market, spending $1 billion on Brazilian mines, reports Bloomberg.
Chinese company CMOC Group, one of China’s largest mining conglomerates, announced the acquisition of the Brazilian business Equinox Gold Corp. for $1 billion.
The deal includes two Equinox companies - Leagold LatAm Holdings BV and Luna Gold Corp. - which control several gold deposits in Brazil.
Under the terms of the deal, Equinox will receive $900 million in cash immediately after closing, as well as a contingent payment of $115 million in one year.
According to CMOC, once the acquisition is completed, the company’s annual gold production will rise to 8 tons per year.
While CMOC’s core business remains copper and cobalt, recent acquisitions demonstrate active expansion into the precious metals sector. Earlier this year, the company acquired Canadian mining firm Lumina Gold Corp. for CAD 581 million (approximately USD 422 million) to develop Ecuador’s largest primary gold deposit.
Analysts note that CMOC’s deal with Equinox is expected to strengthen the Chinese conglomerate’s position in the Latin American gold market and highlights the company’s global ambitions in precious metals, while also increasing China’s influence on the global gold market.
Global gold and silver prices are approaching 36-year highs. Experts report that this year, gold prices have risen by more than 60%, while silver prices have more than doubled.
Meanwhile, Russia has begun a large-scale sale of its gold reserves to patch its budget and support the ruble, signaling a rapid depletion of its strategic reserves due to the war in Ukraine.
