Zijin Mining Group, China’s largest publicly listed metal producer, has signed a definitive agreement to acquire 100% ownership of the Akyem gold mine in Ghana from Newmont for a total consideration of up to US$1 billion.
The deal, expected to close in the fourth quarter of 2024, will involve a cash payment of US$900 million at closing, with an additional US$100 million to be paid either on the ratification date of an extended eastern mining lease by the Ghanaian Parliament, the date a replacement mining lease is ratified, or five years after the closing date, whichever occurs first.
Akyem is one of Ghana’s largest gold mines, having commenced commercial production in October 2013. The processing plant has a designed capacity of 8.5 million tons per year, with gold production over the past three years totaling 11.9 tons, 13.1 tons, and 9.2 tons, respectively. The mine holds gold resources of 54.4 tons at an average grade of 3.36 grams per ton, with reserves of 34.6 tons at an average grade of 1.35 grams per ton, plus an additional 83 tons classified as underground mining inventory.
This transaction is seen as a win-win for both Newmont and Zijin Mining.
For Newmont, the sale aligns with its asset divestiture strategy announced earlier this year. President and CEO Tom Palmer stated that this transaction would help create greater value for shareholders while allowing the company to focus on core assets aligned with long-term growth strategies. Newmont will continue to operate other mines in Ghana, including the Ahafo South and Ahafo North mines, which produced 581,000 ounces and 295,000 ounces of gold in 2023, respectively.
Additionally, this divestiture aligns with Newmont’s capital allocation strategy, such as improving the company’s balance sheet and returning capital to shareholders. The company noted that the proceeds from the sale will be used to strengthen its financial position, enabling it to better respond to fluctuations in gold prices and the evolving regulatory environment.
For Zijin Mining, this acquisition will help expand its international mining asset portfolio and enhance its presence in West Africa. The company, which has been actively strengthening its gold business in recent years, marks the acquisition of Akyem as its seventh gold mine purchase since 2020. Consequently, Zijin aims to boost its annual gold production from 36.5 tons five years ago to approximately 73 tons this year, with plans to exceed 100 tons by 2028.
The company’s strategy involves addressing the challenges of production shortfalls faced by leading global gold mining firms. Zijin Mining’s exploration and acquisition efforts have positioned it as a significant player in the mining industry, with a mission to tap into high-grade ore bodies across the globe. Akyem, located within a major global metallogenic belt, offers promising development potential with its robust geological attributes.
The completion of this transaction remains subject to regulatory approvals in both China and Ghana.