LONDON – Chinese gold producers Shandong Gold Mining Co. and Zhongjin Gold Corp. are among potential bidders for Glencore’s gold mine in Kazakhstan, according to people familiar with the matter.
Glencore may be seeking about $2-billion for the asset, the people said, asking not to be named because the deliberations are private. Zijin Mining Group Co., one of China’s largest gold producers, is also potentially interested in the Vasilkovskoye mine, which Glencore put on the block earlier this year, the people said. No final agreements have been reached and Glencore may decide to retain the mine, they said.
Glencore has been selling assets and trimming costs as part of an effort to cut net debt to as low as $17-billion this year, compared with $25.9-billion at the end of 2015. The company was considering options for its Kazakh gold mine that include selling the asset or its future production, people familiar with the matter said in May. Glencore also agreed to sell just-under a 10% stake in its agriculture unit to Canada’s British Columbia Investment Management Corp. for $624.9-million in cash on Wednesday.
Gold has rallied 19% this year as low or negative rates boost the appeal of the metal, while a sputtering dollar and concerns over economic growth spur demand for bullion as a store of value.
A spokesman for Glencore declined to comment. Representatives for Shandong Gold, Zhongjin Gold and Zijin couldn’t immediately be reached for comment outside of regular business hours.