Zijin’s arrival in Colombia will be thanks to its C$1.4 billion takeover bid for Canadian miner Continental Gold.
The arrival of Chinese company Zijin Mining (OTC Pink:ZIJMF,HKEX:2899) on the scene in Colombia will be of interest to the already established miners operating there, according to Remi Piet, who is senior director at Americas Market Intelligence.
“From the perspective of other mining companies, it’s always interesting for other mining companies to see newcomers in a sector, especially newcomers with the capacity to invest as Zijin has,” said Piet, who noted that besides BHP (ASX:BHP,NYSE:BHP,LSE:BLT) and AngloGold Ashanti (ASX:AGG,NYSE:AU), there aren’t all that many large actors in the Latin American country.
“(There is) a fairly limited amount of large companies able to develop industrial mines in Colombia — as opposed to Peru, and as opposed to Chile. There’s no Barrick (TSX:ABX,NYSE:GOLD), there’s no Rio Tinto (ASX:RIO,LSE:RIO,NYSE:RIO) … the arrival of Zijin can always bring some strong incentive to attract other investors,” Piet explained.
He did warn that because Zijin is new to Colombia, it will need to be careful.
“The risk is also there that if Zijin arrives with a lack of understanding of the whole situation with some practices that unfortunately plague other Chinese miners in Latin America … this also can cause disruption to the perception that mining can be a positive force to the development of local economies.
“(It) will be very important for Zijin to understand this — to operate in collaboration with other mining companies in Colombia and to know how to navigate the very complex layers of political power and influence in Colombia.”
Piet also talked about Colombia’s relative newcomer status as a mining jurisdiction in Latin America, nothing that interest is growing as its government attempts to encourage investment.
Listen to the interview above for more of Piet’s thoughts on Zijin’s acquisition of Continental Gold. He also talks about the dangers posed by a resurgent FARC and how miners can seek to mitigate the risks of operating in close proximity to insurgent activity.
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Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.