Hot topics | Coronavirus pandemic

China Buys Up Gold Mines All Over The World

China Buys Up Gold Mines All Over The World

In many parts of the world, Chinese companies have recently acquired gold mines on a large scale. Thus, the country further inflames speculation about the creation of the yuan, backed by gold, writes the business publication Deutsche Wirtschafts Nachrichten.

According to experts, gold is a natural resource, but it is also a precious monetary metal, useful far beyond its industrial applications. Own mines are an effective way to ensure future access to gold. As prices rise, so does the value of gold in the ground. In 2019, a record $ 30.5 billion was spent on mergers and acquisitions of gold mining companies around the world.

Over the past decade, even though the price of gold has been lower, Chinese gold mining companies have sought to acquire gold mines and mining companies just as China has done with a large number of other metals and natural resources. At the same time, the Chinese side is not going to resell assets in search of profit.

According to the portal, Chinese gold mining companies are actively looking for international gold assets to secure their future production, as well as to reduce or replace China's dependence on the US dollar, which partially supports the yuan. In early October 2019, Chinese companies China National Gold, Shandong Gold, and Zijin Mining attempted to acquire the Canadian gold mining company Iamgold (IAG), but the deal did not take place. China is already the world's leading gold-mining country. In 2018, the country produced 12 percent of the world's 3,332 tons of gold.

Dz Bank's precious metals expert Gabor Vogel sees the gold purchase as proof of "a loss of confidence in important leading currencies like the dollar." According to him, this is a way to reduce dependence and, at the same time, find protection intangible assets.

Beijing trusts gold more than any other currency. At the same time, the Chinese authorities are working in three directions: the Central Bank enters the world market, the government encourages citizens to private investment in gold and at the same time increases production at its mines, the Handelsblatt newspaper notes.