June 20 (Bloomberg) -- Zijin Mining Group Co., China’s biggest gold miner by market value, is considering a bid for the Australian assets of Barrick Gold Corp., said Lan Fusheng, vice chairman in charge of overseas investment.
“The recent slump in gold prices made it an excellent opportunity for Zijin to go out and invest overseas,” Lan said today in a interview at a conference in Zhaoyuan, China. “We are looking at a number of projects now, including the three Australian projects that Barrick has put up for sale.”
Gold slumped 20 percent this year, tumbling into a bear market in April, and is headed for its first annual decline since 2000. Zijin bought Norton Gold Fields Ltd. last year to add assets in Australia, after saying in 2011 it aimed to spend as much as 10 billion yuan ($1.6 billion) a year on acquisitions and expanding mines.
“The slump in gold prices this year caught everybody by surprise,” Lan said. “There was similar opportunity in 2009 when valuations of overseas gold assets dropped sharply but unfortunately we weren’t able to seize it.”
Barrick, the biggest miner of the metal by sales, is considering shrinking in size as the company focuses on returns over production volumes, Chief Executive Officer Jamie Sokalsky said last month. Barrick is working with Bank of America Corp. and UBS AG on a possible sale of three mines in Australia, two people with knowledge of the matter said in April.
Zijin is still weighing its options and hasn’t made an official offer yet as it is concerned about the quality of Barrick’s Australian mines and high cost of production in the country, Lan said.
Gold for immediate delivery fell 0.6 percent to $1,343.06 an ounce at 1:25 p.m. in Singapore.
To contact Bloomberg News staff for this story: Feiwen Rong in Beijing at email@example.com