Zijin Expands into Precious Metals Streaming as Gold Prices Soar

Tue May 27 2025

Zijin Mining Group, China’s largest gold producer, is venturing into the precious metals “streaming” business through its asset management arm, in a strategic bid to lock in future bullion supplies amid soaring global gold prices. According to a recent report by the Financial Times, the move marks the first such initiative by a Chinese mining company.

Streaming is a financing model wherein investors provide upfront payments to mining operations in exchange for a portion of their future metal production. This approach has been largely dominated by Canadian companies, but Zijin’s new strategy signals China’s entry into this niche yet increasingly attractive segment of the mining finance industry.

Lisa Liu, managing director of Zijin’s Hong Kong-based subsidiary, Gold Mountains Asset Management, told the Financial Times that the fund is targeting high-potential, undervalued projects in Africa and South America. The company plans to deploy between $200 million and $400 million in streaming deals this year alone.

“We’re trying to find quality resources that are undervalued,” said Liu. “We are really bullish on gold prices.”

Driven by investor demand for safe-haven assets amid global economic uncertainties, gold prices have jumped 27% this year, repeatedly hitting record highs. This bullish trend has increased the appeal of streaming arrangements, which offer strong returns if gold prices remain elevated while reducing some of the operational risks associated with traditional mining investments.

State-backed Zijin Mining Group, with a market capitalization of $68 billion, is dual-listed in Hong Kong and Shanghai and ranks as the sixth-largest gold producer in the world. The company also plays a significant role in global copper, zinc, and lithium production, with international assets stretching from Serbia and Colombia to Australia and the Democratic Republic of Congo. It recently expanded into lithium through a project in Argentina.

Zijin’s asset management unit, founded in 2013 and managing over $5 billion, completed its first streaming deal last year. In October, Zijin partnered with Wheaton Precious Metals, a leading name in streaming finance, for an $825 million deal supporting Montage Gold’s project in Côte d’Ivoire. The collaboration involved $125 million in project financing, with $75 million allocated to a gold stream. In April, Zijin committed an additional $25 million to a gold stream in Gansu province, central China, in collaboration with TongGuan Gold.

Despite record global gold production, the industry faces a long-term supply challenge due to declining ore grades and underinvestment in new projects. Liu, who has a background in geology, noted, “It’s really hard to find quality projects. The quality of gold mines is decreasing.”

Experts agree that this underinvestment, coupled with shorter reserve lives compared to base metals, means miners are under constant pressure to replenish their gold reserves. Michael Widmer, head of metals research at BofA, told the Financial Times, “Miners are constantly in the business of having to replenish the reserves.”

Zijin’s strategic pivot into streaming could provide it with a competitive edge in securing long-term supply while diversifying its investment risks—potentially reshaping the role of Chinese firms in global mining finance.

Source: https://slguardian.org/