Half of Australia’s most famous gold mine will fall into Chinese hands 

Half of Australia’s most famous gold mine will fall into Chinese hands after a little-known group blew Australian bidders out of the water with a $1.3 billion-plus bid for a stake in Kalgoorlie’s Super Pit.

In what is shaping as another stern test for the Foreign Investment Review Board, Minjar Gold — a subsidiary of Shanghai-listed property group Shandong Tyan Home — will buy the 50 per cent Super Pit stake owned by North American mining giant Barrick Gold.
The deal, which is expected to be announced today, is conditional on FIRB approval and will give Minjar a half share of the 800,000 ounces of gold produced from the Super Pit each year.
The storied mine is the latest in a string of Australian assets to ­attract high-priced takeovers from Chinese interests.
Chinese groups hit heavy political resistance when trying to buy Australian cattle group S. Kidman & Co — the owner of the largest private landholding in Australia — before partnering Australia’s richest woman Gina Rinehart in a successful bid. Scott Morrison in August also blocked Chinese bids for NSW electricity distributor Ausgrid on national interest grounds.
Minjar is understood to have beaten a rival bid from Australia’s biggest gold producer, Newcrest Mining. A successful offer from Newcrest would have returned the Super Pit into Australian hands for the first time since 2002.

The $US1bn ($1.36bn) price tag comfortably eclipses market expectations for the sale. Analysts had predicted the Barrick stake, which was put on the market in August, would fetch up to $US800 million. The 3.5km-long, 1.5km-wide Super Pit skirts the southeast edge of Kalgoorlie and envelops the bulk of the ­­so-called Golden Mile, the rich zone of gold mineralisation that sparked the original gold rush in the region in the 1890s.
The mine dates back to the 1980s when the then high-flying tycoon Alan Bond tried to amalgamate the many small underground gold mines in the area into a single large pit. The mine directly employs about 550 ­people, making it the single biggest employer in the town.
The involvement of Minjar will come as a shock to long-term observers of the Australian mining industry, given the group’s low profile and comparatively small size. Its biggest previous deal in Australia was the $52m ­acquisition of the small and high-cost Pajingo gold mine in Queensland in August.
The $US1bn price tag also compares with the entire $US1.8bn market capitalisation of Minjar’s parent company, Shandong Tyan Home, which is primarily involved in Chinese property development and management.
Chinese companies have had a mixed record of investing in and running mines in Australia, having overpaid for many assets and often struggling to adapt to the local operating environment.
The price of gold typically rises at times of volatility and instability and is often seen as a safe haven for nervous investors.
Donald Trump’s win in the US presidential election had been tipped as a positive for gold, but the price has actually fallen as investors anticipate higher interest rates under a Trump presidency.
While much of the broader mining industry has suffered from a downturn in recent years, Australia’s gold industry has ­enjoyed some of the best conditions in memory due to a combination of healthy Australian-dollar gold prices, falling labour and equipment costs and cheaper fuel.
Barrick’s arch rival, Newmont Mining, owns the other 50 per cent interest in the Super Pit.
The Super Pit stake was ­Barrick’s last asset in Australia as it looks to ease its debt burden.


4 Comments Add yours

  1. Carolyn Sanderson says:

    chinese leadership next on the list


  2. Hope the FIRB have enough nous to stop the deal.


  3. Wendy turnbull says:

    Stop this !!!!!
    Lease but not SELL !!


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s