2009 was a good year for Chinese gold producers. Their efforts helped China become the world’s biggest bullion producer with a record breaking 313.98 tons of gold mined over the year. Chinese consumers seem to have been inspired by the high level of production—gold consumption also hit record high levels.
Who is producing the gold? One would imagine that there are thousands of tiny mining companies in the Gansu Province, the site of China’s largest gold mine deposit. And while small companies like China Mineral Company do exist in Gansu, they don’t stick around for long. Consolidation is the name of the game, as China’s top mining groups begin major bidding wars to keep up with increasing demand.
In 2006, the number of gold mines had been reduced to fewer than 1,000 due to mergers and acquisitions, with the top five gold mining enterprises producing 40 percent of the country’s total gold output, and holding over half of the country’s gold mine reserves. And with rumours that China Mineral Company is catching the eye of big name investors, it looks like it is business as usual for China’s gold mining giants.
