Zijin Mining Group’s public spin-off of its international gold business could fetch more than US$3 billion ($3.87 billion), according to people familiar with the matter, putting the planned Hong Kong listing on course to be the world’s second-biggest this year.
The value and timing of Zijin Gold International’s initial public offering could still change as deliberations are ongoing, the people said, asking not to be identified discussing a private matter.
The listing could come as soon as this month and investor interest in the offering has been exceptionally strong at a time of record-high prices for the precious metal, one of the people said.
A US$3 billion IPO would be the biggest globally since Chinese battery giant Contemporary Amperex Technology Limited (CATL) raised US$5.3 billion in a blockbuster Hong Kong offering in May.
Zijin is the world’s third-biggest metals miner company by market value, and wants to boost output from gold mines that span Central Asia to Africa and Latin America.
“Zijin needs a large pool of offshore money to invest and expand production in their assets,” said Xiaofeng Li, senior partner at Beijing Dentons who is experienced in advising Chinese natural resource firms on overseas deals.
See also: Blockchain-based lender Figure, backers seek US$526 mil in IPO
Zijin Mining and Zijin Gold International didn’t immediately respond to requests for comment. IFR earlier reported that the IPO target was raised to at least US$3 billion, from about US$2 billion.
Gold has surged by more than a third this year on the back of central-bank buying, rising geopolitical risks and the prospect of US interest rate cuts.
See also: Klarna, backers seek US$1.27 bil in IPO after tariff pause
Several Wall Street banks have forecast more gains, with Goldman Sachs Group seeing gold climbing to US$4,000 an ounce next year, from just above US$3,500 now.
The rally has bolstered investor interest in gold miners worldwide, and also encouraged a wave of Chinese gold producers to raise funds. Shares in Zijin Mining, among China’s top producers of both copper and gold, rallied to a record this week and the group is now valued at about US$88 billion. It posted record profits for the first half.
The Zijin IPO would also mark another trophy for the Hong Kong Exchange, which is having a banner year for new listings — especially by Chinese companies. Total proceeds are poised to more than double to above US$26 billion, according to Bloomberg Intelligence estimates.
Growth ambition
Zijin has proved one of the world’s most aggressive mining companies, pursuing rapid expansions and numerous acquisitions across gold and copper.
It wants annual gold output of between 100 tonness and 110 tonnes by 2028, measured by total production of all mines in which it has a stake.
The figure last year was 73 tonnes, of which 60% was outside China, according to Bloomberg calculations.
To stay ahead of Singapore and the region’s corporate and economic trends, click here for Latest Section
Its latest addition was gold mine in Kazakhstan worth US$1.2 billion, which follows last year’s acquisition of the Akyem gold project in Ghana from the world’s top producer Newmont.
But the expansionist agenda has also piled up debts and increased funding requirements. The company’s total debt to capital ratio is nearly 46%, higher than the industry average, according to Bloomberg data. Challenges could also come from geopolitical uncertainties and resource nationalism, the company said in its earnings statement last week.
“Given Zijin’s track record, they should be able to increase output quite quickly,” said Li from Dentons. Zijin’s management “may choose to focus on their existing projects rather than buying new ones”.
Chart: Bloomberg
