Bloomberg News | December 7, 2023
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| MINING IS NOT SUSTAINABLE |
Chinese copper and cobalt miner CMOC Group Ltd., 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 those shifts and a challenging outlook meant it was unlikely to expand its operations in Australia, which ultimately limited future synergies.
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. Australia and Canada have also taken measures to limit Chinese participation in their resources sector.
“Western governments have woken up to the risk that their supply chains of critical minerals could be cut off, or severely squeezed if China dominates supply,” said Grant Sporre, an analyst at Bloomberg Intelligence. That means “a tougher environment for further acquisitions,” especially in developed nations, he said.
CMOC, based in Luoyang in Henan province, agreed earlier this week to sell its 80% stake in the Northparkes copper and gold mine to Australian competitor Evolution Mining Ltd. 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.
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