Zijin Mining Leads Race to Acquire Barrick’s Ivory Coast Gold Mine

The Strategic Implications of Zijin Mining's Bid for Barrick's Tongon Gold Mine

In a significant development for the African gold mining sector, Chinese mining giant Zijin Mining has emerged as the frontrunner to acquire Barrick Gold's Tongon mine in Ivory Coast. This potential acquisition represents the latest move in a broader shift of mining assets from Western companies to Chinese operators across the African continent.

Understanding the Tongon Gold Mine Acquisition Deal

The potential acquisition of Barrick's Tongon gold mine by Zijin Mining represents a strategic transaction in West Africa's evolving mining landscape. Industry sources indicate the deal is valued between $300-500 million, reflecting both the mine's current production capacity and its remaining lifespan.

Barrick has appointed TD Securities and Treadstone Resource Partners as advisors to oversee the transaction, with a final decision expected later this month pending regulatory approval from Ivorian authorities.

Current Mine Performance and Ownership Structure

Tongon, located in northern Ivory Coast approximately 628 kilometers north of Abidjan, has been a significant producer for Barrick. The mine produced approximately 148,000 ounces of gold in 2024, with a market value of approximately $504 million at current gold price forecast.

The ownership structure currently stands at:

• Barrick Gold: 89.7%
• Ivorian government: 10%
• Local investors: 0.3%

A critical factor in the valuation is the mine's limited remaining operational life. According to Barrick's technical assessments, Tongon is expected to enter care and maintenance by 2027 due to declining ore grades and accessible reserves. This three-year production window significantly impacts the asset's long-term valuation.

Barrick's Strategic Rationale for Selling Tongon

Barrick's decision to divest Tongon aligns with CEO Mark Bristow's articulated strategy of portfolio optimization. The company has been strategically pivoting toward high-margin, long-life mining assets while simultaneously increasing its emphasis on copper alongside strategic gold operations.

"Our focus is increasingly on tier-one assets that can deliver sustainable returns across multiple price cycles," Bristow stated in Barrick's Q1 2025 investor presentation. This approach has led the company to concentrate operations in specific regions of Africa and the Middle East where they see long-term growth potential.

Recent Divestment Pattern

The Tongon sale represents a continuation of Barrick's divestment strategy, following:

• The completed $1 billion sale of its 50% stake in Alaska's Donlin gold project
• An agreement to divest the historic Hemlo mine in Canada
• The Canadian exit marking a significant shift in domestic production strategy

These divestments have generated substantial capital for Barrick while allowing management to focus resources on assets with longer operational lifespans and higher profit margins. The company has redirected investment toward its Nevada Gold Mines joint venture with Newmont and copper operations in Zambia and Saudi Arabia.

Barrick's Challenges in West Africa

The Tongon sale comes amid significant operational challenges for Barrick in neighboring Mali, highlighting the complex risk environment of mining in West Africa.

Mali Operations Disruption

Barrick recently suspended activities at its flagship Loulo-Gounkoto complex in Mali following a series of extraordinary government interventions:

• The military government blocked gold exports and detained key staff
• Approximately three tons of gold (worth over $170 million at current prices) were seized in a dispute over Mali's new mining code
• A military helicopter reportedly airlifted gold from the site in a highly unusual operation
• A court-appointed administrator announced plans to sell the seized bullion to fund operations
• Legal appeals to free detained Barrick employees were rejected by a Mali judge

These events have severely impacted Barrick's operations in what was previously one of its most productive African regions, with Loulo-Gounkoto representing approximately 10% of Barrick's global gold production.

Regional Political Risk Implications

The Mali situation has heightened concerns about resource nationalism across West Africa, creating a stark contrast between different operating environments:

• Mali: Increasing state intervention and contract uncertainty
• Ivory Coast: Relatively stable mining code and regulatory environment
• Burkina Faso: Rising security concerns affecting operations
• Ghana: Increasing royalty and taxation demands

These varying risk profiles directly impact mining investment decisions and potentially influence Barrick's valuation expectations for Tongon. Mining analysts suggest the Mali situation may have accelerated Barrick's timeline for divesting non-core West African assets.

Zijin Mining's Strategic Interest in Tongon

For Zijin Mining, Tongon represents more than just an incremental gold production asset – it fits into a broader Zijin global expansion strategy with particular focus on Africa.

Zijin's Global Expansion Strategy

Zijin has pursued an aggressive international acquisition campaign across multiple continents, focusing particularly on gold and copper assets in strategic locations. The company has:

• Established a significant presence in South America through the acquisition of Continental Gold (Colombia)
• Developed major copper assets in Central Asia, including the Kamoa-Kakula project
• Pursued an expanding footprint in Africa through targeted acquisitions
• Leveraged deep financial resources enabling competitive bidding for assets

Zijin's strategy differs notably from Western miners by accepting shorter mine lives and higher political risk profiles in exchange for immediate production and regional consolidation opportunities.

Zijin's Existing African Investments

The Tongon acquisition would complement Zijin's growing West African portfolio:

• In July 2024, Zijin acquired a 9.9% stake in Canada-based Montage Gold, which is developing the Koney gold project in Ivory Coast
• In October 2024, Zijin purchased Newmont's Akyem gold mine in Ghana for $1 billion
• The combined operations would create a significant regional production hub spanning multiple countries

Zijin has demonstrated willingness to pay premium prices for strategic assets, often outbidding Western competitors by 15-30% according to mining industry analysts. This aggressive valuation approach has allowed the company to rapidly build a global portfolio despite being a relative newcomer to international mining.

Chinese Mining Investment in Africa: The Broader Context

Zijin's bid for Tongon represents part of a much larger pattern of Chinese resource investment across Africa, which has transformed the continent's mining sector over the past decade.

Scale of Chinese Mining Presence

Chinese state-owned enterprises have invested over $50 billion in African mining since 2010, focusing on several strategic minerals:

• Bauxite: Primarily in Guinea, where Chinese companies control over 60% of production
• Copper: Major investments in Zambia and the Democratic Republic of Congo
• Cobalt: Dominant position in DRC cobalt production (essential for EV batteries)
• Gold: Growing presence in Ghana, Tanzania, and increasingly Ivory Coast

This investment has combined direct acquisitions with various partnership structures, giving China growing influence across multiple African mining jurisdictions. Chinese companies now control approximately 18% of Africa's gold production, up from less than 5% a decade ago.

Ivory Coast Government Preferences

Reports from regional sources suggest the Ivorian government has expressed a preference for a partnership structure rather than outright acquisition:

• Government officials have indicated a desire for continued local participation
• Zijin is reportedly not favoring the partnership approach for the Tongon acquisition
• Regulatory considerations may impact final transaction approval
• The Ministry of Mines has declined to comment on specific requirements for the deal

This tension between buyer preferences and government expectations could potentially complicate the transaction. Ivorian mining law grants the government significant discretion in approving major mining asset transfers.

Competitive Dynamics of the Tongon Sale

While Zijin appears to be leading the bidding process, the transaction is not without competitive elements and valuation challenges.

Bidding Competition Analysis

Sources close to the transaction indicate:

• An unnamed local Ivorian company is also in contention
• Zijin's financial resources provide a significant competitive advantage
• The asset is valued at approximately $300 million by industry analysts
• Expectations suggest Zijin may offer up to $500 million to secure the acquisition
• The deal could face delays or potential collapse despite current progress

The competitive dynamic is complicated by the Ivorian government's reported preference for local participation, which could potentially favor the unnamed local bidder despite financial advantages held by Zijin.

Valuation Considerations

Several factors complicate the valuation of Tongon:

Mining analysts suggest that while the base economic value of Tongon's remaining reserves might justify a $300 million valuation, strategic considerations could support Zijin's potential $500 million offer. The premium would reflect synergies with nearby operations and the company's aggressive growth targets.

Implications for the Gold Mining Industry

The potential Tongon transaction represents more than just an isolated asset sale – it signals broader shifts in the geopolitical mining landscape.

Shifting Ownership Patterns in African Gold

A clear trend has emerged in recent years:

• Major Western miners reassessing African portfolios amid political challenges
• Chinese companies expanding presence through strategic acquisitions
• Increasing prominence of regional African mining companies
• Changing dynamics in mine ownership affecting community relations and development priorities

This ownership transition raises important questions about environmental standards, labor practices, and community engagement as operating philosophies differ between Western, Chinese, and local mining companies. Recent Reuters reporting provides additional context on these shifting patterns in African mining.

Market Implications for Gold Producers

The transaction, if completed at reported valuations, would establish several important precedents:

• Valuation benchmarks for mature gold assets with limited remaining life
• Pricing models for operations in politically complex jurisdictions
• Strategic positioning priorities for major players in key gold-producing regions
• Future investment patterns in West African gold mining

Industry analysts suggest that if Zijin leads race to buy Barrick's Ivory Coast gold mine at a premium valuation, it could trigger a reassessment of similar assets currently held by Western miners, potentially accelerating portfolio reviews at companies like Newmont, AngloGold Ashanti, and Kinross. The transaction also reflects broader gold M&A trends that are reshaping the industry landscape.

FAQs About the Tongon Gold Mine Acquisition

When is the Tongon mine expected to cease production?

Barrick has indicated that the Tongon mine is expected to enter care and maintenance by 2027 due to declining resources, giving the mine approximately 2-3 more years of active production under current plans.

What is the current annual production of the Tongon gold mine?

According to Barrick, the Tongon mine produced approximately 148,000 ounces of gold in 2024, which is valued at around $504 million at current gold market predictions.

How does this acquisition fit into Zijin's broader strategy?

This potential acquisition aligns with Zijin Mining's aggressive global expansion strategy, particularly in Africa where it has already invested in gold projects in Ivory Coast and Ghana, strengthening its position as one of China's largest gold producers with an increasingly international footprint. According to Mining Technology, this move represents a significant step in Zijin's African strategy.

What other major assets has Barrick recently divested?

Barrick has recently completed a $1 billion sale of its 50% stake in the Donlin gold project in Alaska and has agreed to divest its historic Hemlo mine in Canada, marking its exit from domestic Canadian gold production as part of its portfolio optimization strategy.

Disclaimer: This article contains forward-looking statements and analysis regarding mining asset valuations, company strategies, and market trends. Such statements involve risks and uncertainties that may cause actual results to differ from those projected. Readers should conduct their own due diligence before making investment decisions based on the information presented.

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