China’s CMOC says geopolitics helped drive Australian mine sale

7th December 2023 By: Bloomberg

China’s CMOC says geopolitics helped drive Australian mine sale

Chinese copper and cobalt miner CMOC Group, which sold a controlling stake in its Northparkes mine in Australia earlier this week, said a changing geopolitical situation was one of the reasons for the divestment.

A media representative for the company — confirming comments made by a CMOC official to local media on the sale — said the geopolitical changes and its longer term outlook meant it was unlikely to expand its operations in Australia, which ultimately limited synergies from the operation.

Beijing’s relationship with the US and its allies has been fraying, with Washington attempting to build supply chains for ingredients crucial to the energy transition to lessen reliance on China.

Luoyang-based CMOC agreed earlier this week to sell its 80% stake of the Northparkes copper and gold mine to Australian competitor Evolution Mining for $475-million.

Along with peer Zijin Mining Group Co., CMOC has for years been at the forefront of China’s mineral expansion overseas from Africa to the Americas, building copper, cobalt and gold supply. Zijin said in August that it has slowed acquisitions due to high project valuations and geopolitical tensions.

Northparkes’ falling ore quality, meaning its lower metal content, also contributed to the sale, the media representative said, putting annual returns at 15% since the acquisition in 2013. The company has ample capital reserves and will remain open to global acquisition targets, he added.