Zijin on the prowl for overseas acquisitions

Zijin Mining Group Co, China's most profitable gold producer, says it is using the slump in metals prices to accelerate overseas acquisitions.

The company will pursue its "going abroad" strategy with new urgency given relatively low valuations in the mining sector, Chairman Chen Jinghe told Bloomberg Television.

The company, based in Fujian province, wants to secure producing assets overseas, as it juggles depleting mines and heightened environmental scrutiny at home with growing demand in the world's biggest buyer of the metal.

Gold consumption in China this year is forecast at 900 metric tons to 1,000 tons by the World Gold Council. Domestic production lags at around half that level, according to the China Gold Association.

"In the past we had focused on finding grassroots or greenfield projects," said Chen.

"Now we will turn our attention more to those projects that have existing production, which will have an immediate contribution to our output and performance."

Zijin had about 3.3 billion yuan ($518 million) worth of cash and equivalents at the end of June, according to its first half results, down 27 percent from a year ago.

In May the company said it plans to raise up to 10 billion yuan in a private placement. It's also looking for an opportune time to raise up to 13.3 billion yuan in debt, it said in June.

Any acquisitions would add to the near-$1 billion in deals that Zijin has agreed in the past year. Chen said the purchase in May of a 50 percent stake in Barrick Gold Corp's Porgera mine in Papua New Guinea for $298 million is a template for future deals.

"We will proceed with more of this type of acquisition," he said. Porgera will yield 7 to 8 tons of gold a year for Zijin.