China continues to extricate itself from the US dollar daily, as well as create a stranglehold on natural resources throughout Africa. The state-owned China National Gold Group Corporation has made a bid for African Barrick Gold in Tanzania.
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% 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% 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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I had a curious thought and am interested to hear everyone’s opinions. Theoretically, could China be buying up gold/silver mines so that they can restrict supply when the paper gold ponzi scheme collapses, causing the value of their massive bullion stockpiles to skyrocket. Similar idea to the control of the diamond minds in Africa.
In just the past 6 months China has imported 383 tonnes of Gold, and their last “official release” states total reserves at 1,054 tonnes (the reality is probably double that). If the coming financial collapse alone causes Gold to double (I feel that is a conservative estimate) China stands to make $54,639,360,000. Imagine what will happen to price if China could restrict/stop production at many of the world’s major mines…..
Last Straw
the stats I have heard are as follows. China’s reported gold production is about 380 tons. They will acquire maybe 800-1,000 tons this year. That acquisition is about 35% of the world gold production of 2,200 tons, X China . Their bootleg mines produce an unknown amount but estimated to equal reported production. As the gold miner stock prices take a hit due to political and economic turmoil as well as profit constriction resulting from high extraction costs, these purchases present a target rich environment. China has $3 trillion in currency reserves, none of which are worth the paper they are printed on.
Even those countries inclined to nationalization would find themselves less likely to try that with the Chinese. China is making considerable investment in other firms and infrastructure within those countries, particularly the BRICS and SA, making themselves a good and generous corporate neighbor. They can afford it.
But China has an iron fist and it’s not lost on any country that gets in bed with China that this country has teeth. Its blue water navy is growing. It has submarines, nukes and a massive army. China’s acquistions are sometimes close to home so delivery of military assets would be quick. Aircraft carries and jets are being built in force. That threat is never far from the minds of those governments who ally themselves with China. The Africa investments are usually done with regimes who’s human rights records are spotty. Leaders are inclined to accept large donations to the offshore accounts of top families and elites in those countries. In a way China is taking a page from our Empire building book.
After all is said, China will rotate these precious metals; 1,000 tons of gold and 1,250 tons of silver, to their vaults this year. Any precious metals mined in other countries will be brought back to China, never to see the light of day again. A gold backed currency is in the works.
Jim Willie thinks China will hoover up a few thousand tons within the next few years as the bullion banks are forced to cough up their collateral. Oil, coal, RARE EARTHS!, iron, steel, copper zinc and lead are also high on their list of acqusitions. As we diminish in stature, China expands on the back of our short sighted financial and political policies.
I heard they are using their US T-bills as a down payment!
they be OK until the Anglo American superpowers declare Africa as a terrorist country.
The United States built up China too much.
Now, it is going to come back and bite us in the collective asses.
They still have to pay Britain back for the Opium wars, and obviously they relish the idea of owning us too.
Barrick can use some cash. They have a customer waiting for promised ddozens or hundreds of millions of ounces of silver. Mining them costs most then buying then on the market. Customer won’t take cash, wants the ounces. Barrick will need to spend more on those ounces than todays’s spot price. it’s going to be increasingly costly if they let this issue linger too deep into 2013…
LastStraw…
It may be even more insidious than that. Not only are the Chinese buying up anything and everything of value, they are exporting people to run those businesses, mines, factories, farms, etc. IMHO, China will use its massive store of phyzz to CAUSE the paper Ponzi scheme to collapse. They will then have the only meaningful phyzz on the planet and will be in the cat-bird seat to dictate their terms to the rest of humanity. Japan tried to take over the business world back in the 1980s. They did well at that for a while but with just under 2% of the Earth’s human population, bit off more than they could chew or swallow and are still suffering from the effort. Fast forward 30 years… now we have China doing the same thing only they have over 20% of the world’s population with which to manage this. So far, so good.
Between 850 and 1450 AD, China played the starring role in the original version of this movie (catastrophic paper currency collapse). Their ‘flying money’ was standard fare throughout Asia, but when the inevitable self-destruction came down like a comet crashing into Shangri-La, the Emperor’s court confiscated every copper vase, platter, pot and Buddha statue they could lay hands on and converted the paper to copper Cash, with the ultimate goal of standardizing their international economy on silver in Tael-Weight. Though it took until the 1750s to finally meet their goal, their endemic copper Cash, with those odd square holes in their centers, stood as normal ‘street trade’ money across the whole of Asia, right up to 1932!
It’s my firm opinion that China is in the process of re-distributing this old classic in every theatre around the globe. So, prepare yourself to pay … Cash … for your meat and potatoes!