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China National Gold Group Corporation plans to buy Barrick Gold's stake in Africa Barrick Gold.
Barrick Gold, the world's biggest gold producer, announced today that they are in talks to sell the 74 percent stake in its African mining business to China National Gold Group Corporation, a state-owned enterprise in China, via a statement on its website.
The deal is a great example of China's desire to push further into Africa to invest in commodities in order to support its rapidly expanding economy.
The World Gold Council published a big update on global gold demand trends today saying that in the second quarter, "Indian and China continued to dominate global consumer demand, accounting for a combined 45 percent of total second quarter jewellery, and bar and coin demand."
The African company — African Barrick Gold — was taken public by parent company Barrick Gold in 2010 and trades on the London FTSE stock exchange, but Barrick Gold still owns a huge 73.9 stake in the stock of the Africa business.
African Barrick Gold responded to the announcement with a statement of its own, saying that "Should China Gold acquire more than 30 percent of the voting interest in ABG, it would then be required to make an offer for the whole of ABG's issued ordinary share capital."
If the deal goes through, African Barrick Gold — located in Tanzania — would be a major addition to China's African mining portfolio.
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