More Chinese resource acquisitions on the way – by Lara Smith ( – May 17, 2016)

Lara Smith is the Founder and Managing Director of Core Consultants in June 2009. Core Consultants are committed to supplying high-quality commodity market research, analysis and valuations to global institutions.

China Molybdenum (CMOC) has long earned its reputation as a highly acquisitive company. In 2015, it made its intentions known that it would pump around $2bn into acquiring mining assets outside of China. Traditionally a molybdenum and tungsten producer, CMOC has targeted copper in recent years, paying $820m for Rio Tinto’s Northparkes copper mine in New South Wales in 2013 and bidding for Barrick’s Zadivar mine in 2015.

Earlier this year the company revealed that it had earmarked $4bn to acquire assets following its agreement to purchase Anglo’s Brazilian niobium and phosphate operations, which is regarded as a diversification from the more volatile metals market.

In April, Minmetals vice president, Jerry Jiao confirmed that China was short of copper resources and would be making acquisitions as a way to stabilise their supply chain. This culminated with the announcement that China Molybdenum has acquired the DRC’s flagship asset, Tenke Fungurume from Freeport for a consideration of $2.65bn.

In addition to the copper-cobalt deposit, CMOC has the option to acquire Freeport’s interests in the Kokkola Cobalt Refinery in Finland for $100m and the Kisanfu exploration project, located in the DRC for $50m.

China consumes around 11m tonnes of raw copper and produces 7m tonnes of copper cathode, but can only supply 1.7m tonnes from its domestic mining. Additionally, growth sectors such as automotive and renewable energy are increasing the intensity of copper use in China and is, therefore, increasing the urgency for China to invest in the sector.

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