Zijin Mining's $4 Billion African Gold Expansion Plan Faces Delay
¬ Zijin Mining and Allied Gold have postponed the $5.5 billion CAD (approximately $4 billion USD) deal originally scheduled for completion in late April to July 29, 2026
¬ Reports indicate that Chinese regulators have expressed concerns over the acquisition price and Allied Gold’s exposure to risks associated with its operations in Mali. The Sadiola gold mine in Mali accounts for about half of Allied Gold’s total production
¬ The acquisition would add new African assets to Zijin Mining’s portfolio, expected to produce around 800,000 ounces of gold annually by 2029, helping the company achieve its target of 140 tons of annual gold output by 2028
The $5.5 billion CAD (approximately $4 billion USD) transaction between Zijin Mining and Allied Gold, initially set for completion at the end of April, has now been delayed until July 29, 2026. Both companies announced this extension on Friday, May 29. The delay will slow down the Chinese conglomerate’s expansion strategy in Africa’s gold sector, as Beijing continues to have unresolved questions regarding certain aspects of the deal.
Final Adjustment – Or Something More Underlying?
Zijin Mining established a foothold in Ghana through the acquisition of the Akim gold mine in 2025. With the purchase of Allied Gold, the company stands poised to significantly expand its footprint across Africa.
Allied Gold operates the Agboua and Bounkro gold mines in Côte d'Ivoire and the Sadiola gold mine in Mali. The company also expects to bring online the Kurmuk gold mine in Ethiopia later this year. However, both parties must secure all necessary regulatory approvals from relevant jurisdictions before closing the transaction.
When announcing the delay, Allied Gold stated that it has satisfied conditions imposed by Canadian and West African and East African regulatory authorities. The company added that some African host countries have already approved the transaction, while approval processes in other jurisdictions are still ongoing.
Yet, despite the fact that approval from Chinese regulators is a critical condition for closing the deal, Allied Gold did not disclose whether such approval had been obtained. More importantly, the company offered no detailed explanation for the delay, merely stating that discussions are underway with Zijin Mining regarding revisions to credit arrangements related to the transaction.
On the same day, the Financial Times published an article indicating that Chinese regulators have raised concerns about the terms of this acquisition. The report noted that the National Development and Reform Commission (NDRC) questioned the premium Zijin Mining plans to pay for Allied Gold, sparking broader concerns about the transaction’s valuation.
The report also highlighted worries about potential risks in Mali, where the Sadiola mine contributes roughly half of Allied Gold’s production. As of now, neither company has formally responded to these issues. Therefore, observers cannot yet determine the actual impact of these concerns on the transaction timeline or whether they are linked to the financing adjustments mentioned by Allied Gold.
What’s Next?
Until further clarity emerges, the uncertainty surrounding this deal underscores the complexity inherent in large-scale mergers and acquisitions within the gold mining industry.
This challenge appears particularly acute in Africa, where several gold-producing countries continue revising their mining policies to capture a larger share of gains from rising gold prices. Mali serves as a prime example: tensions have emerged between the government and mining companies following the implementation of the 2023 Mining Law.
Nevertheless, for Zijin Mining, the transaction remains strategically significant, as the company pursues an aggressive growth and production optimization strategy.
In February this year, Zijin Mining raised its 2028 gold production target from the previous 110 tons to 140 tons. This adjustment is based on expectations of increased output from existing mines in China, Papua New Guinea, and Colombia, along with accelerated investment and acquisition activities.
Under this context, completing the acquisition of Allied Gold would represent a major milestone. The deal would substantially strengthen Zijin Mining’s asset portfolio, enabling it to produce approximately 800,000 ounces of gold annually—equivalent to about 22.6 tons—by 2029.
Market participants will closely monitor developments leading up to the revised closing date. Meanwhile, Allied Gold is attempting to reassure investors, stating that both parties remain committed to “completing the transaction as soon as possible.”
At the same time, Zijin Mining is advancing its expansion strategy in other areas of Africa. The company recently announced plans to acquire another Chinese mining firm, Chifeng Jilong Mining, for RMB 18.26 billion (approximately $2.6 billion USD). Chifeng Group owns the Wassa gold mine in Ghana.
Source: ecofinagency
Original Article: toutiao.com/article/1866888640730314/
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