Zijin Mining Group, China’s largest gold producer, is entering the world of precious metals streaming—a financing strategy that allows investors to fund mining projects in exchange for a share of future production. The move marks a strategic pivot as the company seeks to bolster its gold supply amid surging global prices and tightening availability.
The streaming initiative is being spearheaded by Gold Mountains Asset Management, a Hong Kong-based investment subsidiary of Zijin. The company plans to deploy between \$200 million and \$400 million in streaming deals this year, focusing primarily on opportunities in Africa and South America.
“We’re trying to find quality resources that are undervalued,” said Lisa Liu, Managing Director of Gold Mountains Asset Management. “We are really bullish on gold prices,” she added, referencing the 27% rally in gold prices this year, which has been driven by investor demand for safe-haven assets amid global economic uncertainty and trade tensions.
Streaming, as a financing model, offers attractive returns in high-price environments while reducing operational risks typically associated with mine ownership. Liu noted that streaming has traditionally been dominated by Canadian firms, but Zijin’s deep operational expertise gives it a unique advantage. “The quality of gold mines is decreasing,” Liu said. “It’s really hard to find quality projects. But our mining background helps us spot and evaluate opportunities more effectively.”
Zijin, a \$68 billion market-cap company listed in both Hong Kong and Shanghai, is currently the world’s sixth-largest gold producer. In addition to gold, it is also a major player in copper, zinc, and lithium. The company has been aggressively expanding its global footprint, holding interests in mines across Serbia, Colombia, Australia, and the Democratic Republic of Congo. It recently entered the lithium market with a project in Argentina.
The company’s asset management unit, established in 2013, manages over \$5 billion and completed its first streaming deal last year. This year, it has already teamed up with Canada’s Wheaton Precious Metals on an \$825 million financing package for Montage Gold’s mine in Côte d’Ivoire, contributing \$125 million in funding and \$75 million for a gold stream. In April, the duo also committed \$25 million to a gold streaming deal with TongGuan Gold for a project in Gansu province, China.
Industry analysts point to a looming supply crunch in the gold mining sector. Years of underinvestment and declining ore grades have made it harder to find high-quality, long-life gold deposits. Gold mines also tend to have shorter reserve lives than those of base metals like copper and zinc, increasing the urgency to replenish resources.
Michael Widmer, Head of Metals Research at Bank of America, noted, “Miners are constantly in the business of having to replenish reserves.”
Despite these challenges, global gold production hit a record high in 2023 and is expected to rise further this year, according to data from consultancy Metals Focus. With streaming offering an alternative path to securing resources, Zijin’s strategic shift may position it to weather industry headwinds while expanding its reach in the global gold market.
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