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Chinese mining majors signal more partnerships

China Minmetals Corp., which will become the largest mining and metal trading company in China by asset upon the completion of its takeover of Metallurgical Corp. of China Ltd., or MCC, plans to increase investments in mining operations, according to chairman He Wenbo, speaking at the China Mining Congress and Expo 2016 on Sept. 23 in Tianjin, China.

"We will become more active in investments in mining operations and provide partnership opportunities for other miners," He said.

The decision came after China Minmetals was selected by the Chinese authorities, among a list of seven state-owned enterprises, to lead the establishment of a state-owned capital investment company for the mining sector, according to He.

"Larger mining companies [in China] should take the initiative to encourage more cooperation and help smaller miners' developments," He said.

Song Xin, general manager of China National Gold Group Corp., said in a speech that the gold producer welcomes cooperation or partnership opportunities with companies from other sectors, such as steel and nonferrous metals.

"Cross-sector cooperation or partnership can help miners learn from each other's experience and improve profitability," Song said.

Led by China's State Council, a restructuring program among the country's state-owned enterprises is progressing with China Minmetals' acquisition of MCC, Baoshan Iron & Steel Co. Ltd.'s takeover of Wuhan Iron & Steel Co. Ltd., as well as China Shenhua Energy Co. Ltd. and China National Coal Group Corp. establishing a new unit to consolidate coal assets controlled by other central government-owned companies.

While the restructuring initiative is heating up in the domestic mining sector, China Minmetals' He also encouraged Chinese miners to deepen partnership with foreign mining companies in overseas deals.

"More Chinese mining companies are establishing joint ventures with foreign miners when investing abroad," He said.

Song noted that the company is looking at some potential deals in the market, without referring to any specific deal or company name.

"After acquiring the Jinfeng gold mine in China for US$300 million from Eldorado Gold Corp., China National Gold is also looking for more partnership opportunities with domestic or foreign miners," Song said.