Zijin's push for Phoenix Gold could put China back in Aussie mining
The Chinese Zijin Mining Group is making a move to strengthen its grip on Australia’s Phoenix Gold, which would take its shares of the company from 8.9 per cent up to 17.9 per cent following the deal. It is Zijin’s third planned acquisition of a foreign mining asset in the last month alone.
If the agreement goes through to allow Zijin to pay 10 cents per share to Phoenix, it would set its value at $47 million. It would also put the Chinese company ahead of Evolution Mining in terms of amount of shares owned. In May, Evolution Mining paid Barrick Gold $550 million for an Australian mine, which instantly made it the county’s second-biggest gold producer on the Australian Securities Exchange (ASX).
RELATED TOPIC: Australia takes hit as Barrick Gold continues to sell
But after convening with its advisors, Phoenix isn’t close to making the deal the way it’s currently set up. A shift in its thinking, however, would be a big move for Zijin. Norton Gold Fields, which is an owned subsidiary of Zijin, also has a principal agreement for a mining deal over Phoenix’s Castle Hill Project.
But this could be the first step in China regaining its presence in Australian mining. Although gold output in Australia—which is the world’s second-largest producer behind China—reached its highest point in a decade in 2014 and is expect rise even further this year, Chinese acquisitions and investments in Australia’s resources sector is on pace to reach its lowest levels since 2007.
New information shows only nine Chinese investments in ASX-listed mining and exploration companies this year. Although the deals have made a total of $1.2 billion in revenue, most of this has come from the Guangdong Rising Assets Management’s $1billion offer to take over copper mining company PanAust.
Unless the Zijin deal to land Phoenix Gold has an enormous impact, 2015 could see the least amount of activity since the six deals worth $379.7 million in 2007. A big reason for this is several lousy investments by Chinese companies in Australia over the years, along with steep price drops for important commodities like coal and iron ore.
Instead of mining, Chinese interest in Australia has now shifted to other industries such as property investment and agriculture. However, a weakening Aussie dollar, along with cheap labour, is bringing gold mining back to the forefront.
The only question is which company will be there in the end to reap the benefits?
Timeline: India takes unicorn leap with six in five days
We chart an historic week in India’s tech industry, where in just five days, between 5-9 April 2021, the country achieved six new unicorns, bringing India’s total to 10 in 2021 to date, an immense unicorn leap from just seven in 2020 and six in 2019.
April 5: Meesho
India’s first social commerce unicorn, Meesho raised US$300m from SoftBank, Facebook and Shunwei Capital, giving the Bangalore-based startup a US$2.1bn valuation, a threefold jump from its previous funding round in 2019. Founded in 2015 by two IIT-Delhi graduates, Meesho connects producers and resellers, helping small businesses sell through social media. It has 45m customers and has enabled 13m entrepreneurs to start their online businesses with no investment.
April 6: CRED
Founded just over two years ago, Bangalore-based credit card repayment app CRED raised US$215m from Falcon Edge Capital and Coatue, nearly trebling its valuation to US$2.2bn from its January US$80m round. Allowing customers to pay off their credit card debt while earning CRED coins which they cash in for rewards, CRED has grown rapidly during COVID-19, doubling its customer base to nearly 6 million in a year.
April 7: API Holdings / Groww
The first epharmacy startup to gain unicorn status, PharmEasy (API Holdings), which has digitised 60,000 brick and mortar pharmacies and 400 doctors across India, raised US$350m in a round led by Prosus Ventures. Founded by four former Flipkart employees as a way of making investing simple, investment platform Groww became India’s second-youngest fintech unicorn, raising US$83m in Series D funding led by Tiger Global, quadrupling its previous round in September.
April 8: ShareChat
New Delhi-grown social media startup ShareChat, founded in 2016 by Mohalla Tech raised US$502m from Lightspeed Ventures, Tiger Global, Twitter and Snap taking its raised total over six rounds to US$766m and pushing its valuation to US$2.1bn. The funding will be used to grow its user base and short video platform Moj, which launched in 2020 following TikTok’s ban in India. The regional language startup claims 280m users.
April 9: Gupshup
AI-led conversational message startup joined the unicorn club after raising US$100m from Tiger Global giving it a ten-fold valuation of US$1.4bn. The smart messaging platform, which has seen accelerated growth during the pandemic, was founded in Bangalore in 2005 by serial entrepreneur Beerud Sheth, whose online freelancing platform Elance is now listed. Gupshup’s API enables 100,000+ businesses to build messaging and conversation experiences across 30+ communication channels.