In mid-October, Kazakh media reported the closing of a deal to sell 100% of the shares of gold mining company RG Gold, which owns the subsoil use rights to the Raygorodok deposit in the Akmola region of Kazakhstan, to the Chinese company Zijin Gold International. Zijin Gold International is part of the Zijin Mining Group and had an initial public offering (IPO) in Hong Kong in late September, raising approximately $3.9 billion from investors.
Zijin Eurasia Mining CEO Liao Jiansheng attended Kazakhstan Day, organized for the first time by the Kazakh geological group Aurora at the China Mining exhibition in Tianjin on October 23. On the sidelines of the event, the correspondent of inbusiness.kz spoke with the top manager of Zijin Gold International about the Chinese company’s prospects for working at one of Kazakhstan’s largest gold deposits.
– Mr. Jiansheng, at the end of June, it was reported that RG Gold would be sold for $1.2 billion, but Raygorodok had some debt. What was the final payment amount—$1 billion or more?
– The deal amounted to $1.2 billion, and the adjusted final amount was $1.008 billion. We already made the payment in mid-October. We plan to expand our investments in your country. We will build a new plant, the construction cost will be approximately $500 million. The ore processing capacity will be around six to eight million tons per year. We will create over a thousand new jobs.
– Will you completely change the technology at Raygorodok?
– Actually, the gold recovery plant is good for today. And their management is also good. I noticed that the local workers are highly qualified. So, we will be looking at it over the next few months and analyzing it. Of course, Zijin has its own best technologies, and we will be adding them.
Also regarding management – we have our own experience. But this is based on a peaceful transition from the old owner to us, the new owner. Because a peaceful transition affects both sides, it is very important, especially for our employees.
Also, taking this opportunity, I would like to tell the local employees: you don’t need to worry. Zijin Corporation operates in 17 other countries. We have our experience. I always say this: a joint venture or a local mine is a common source of income. Yours and ours. So we must make sure this bread becomes bigger and more delicious.
– How many Chinese will work at the field?
– We will strictly adhere to the quota set by your law. In the meantime we will see. Of course, we already made this request during our negotiations with your prime minister, your local governor, and your minister of industry, especially during the reconstruction period—we need to invite more Chinese specialists. This is only during the technical reconstruction period. There won’t be enough for managers. We will strictly and rigorously adhere to your country’s laws.
Regarding local workers, we will use them first and foremost. Because I’ve always believed that local force is the greatest force.
– How long do you plan to operate Raygorodok? For 10-16 years? You said you’ll increase production to 6-8 million tons of ore per year. The plant there used to operate with a capacity of over 5 million tons, if I remember correctly.
– Yes, we have a mining license. I believe it runs until 2035, and then we will renew it. It really does depend on the level of technology.
– Will you be developing Raygorodok using the open-pit method or switching to underground mining?
– It will be open-pit. We also have extensive experience in underground production. But Raygorodok is an open-pit deposit.
– What is the current recovery rate at the Raygorodok processing plant, and what losses typically occur there when producing concentrate?
– They have a good recovery rate too. Frankly, the management is good and the technology is quite good. So we will be studying it. Our specialists are already working on site, and we promised the government that we’ll submit our feasibility study for your government’s consideration by the end of this year. The most important thing is for your government to approve it as quickly as possible.
– How many tons of gold are left there? I used to think there were only 50 tons of recoverable gold, but then a figure of 87 tons was mentioned. In terms of JORC-certified resources, how much could be really be there — 200 tons? Considering the price of gold has risen sharply—it was recently above $4,000 an ounce.
– When we talk about the reserves in this deposit, it depends on the level of development, I mean mining technology. Zijin Corporation is one of the most advanced mining companies in the world. We have our own cutting-edge technologies, which we use to extract over 90% of the gold from the ore. Therefore, given the level of our technology, the resources of this deposit could even exceed 200 tons.
– I was told that there was strong competition for Raygorodok from a major Kazakh gold miner, Solidcore Resources, and the Turkish company TÜMAD Madencilik. Arab investors were also considered. Did you win with a higher bid?
– Regarding this—it’s a really long story. It might already be a secret, so I won’t reveal the exact price we offered. In short, we’ve already become the new owner of this gold deposit. We’re working hard to make this deposit the most advanced, the best “green” gold deposit in Kazakhstan.
– Regarding the mineral extraction tax on gold, which will increase in 2026 due to prices rising above $3,000-4,000 per ounce, is it high in our country compared to other jurisdictions where Zijin operates—Tajikistan, Kyrgyzstan, and Ghana, for example? What is your overall opinion of the tax burden in Kazakhstan?
– Every country has its own specifics. I think the level of taxation in your country is improving. But there’s a caveat: as far as I know, we have to pay royalties (referring to the mineral extraction tax – Ed.) based on the level of exploration results. In principle, in international practice, governments should receive taxes based on two options: first, based on the average grade we’ve already extracted, or based on sales volume. This is the basis of taxation, it’s international practice. Therefore, we’ve repeatedly proposed our proposals to the Kazakh government to reform this sector.
But one could say that you have a good investment climate. This is precisely why we at Zijin have been working with you in recent years, and we finally have such a deposit. Based on this, we can confidently expand our cooperation with Kazakhstan.
– Are you going to buy any new deposits in Kazakhstan?
– We’re currently exploring new proposals with the help of our embassy and Kazakh Invest. I’m confident there will be results.
– Will you sell the gold you mine to the National Bank of Kazakhstan or ship it directly to China?
– In principle, first of all, we will comply with your law. If your law requires selling first to the National Bank or your Ministry of Finance, we will sell to them. Otherwise, if permitted by law, we can sell on the international market, not just back to China.
– RG Gold held several exploration licenses in the Akmola region. Did you receive them during the deal?
– Regarding licenses, there are actually two options. There’s a license for further expansion of geological exploration. I think we already have a license for that—it’s already within the scope of our license. But if we don’t have a license, then we need to obtain an additional license. As of today, I believe we have the right to conduct geological exploration in the area within the scope of our current license.
– There were small gold deposits in the Akmola region. Will you be acquiring more of them to create a hub?
– We’re currently exploring other offers. We’re looking at deposits with significant reserves. I know they have metal resources in the Akmola region, too. We’ve already spoken with the governor there, and negotiations are ongoing. If the conditions are right, we can buy, and so on. The most important thing is to explore first.
– Will you make additional investments in geological exploration in Kazakhstan?
– Certainly.
– How much roughly, $50-100 million?
– I can’t say yet. Zijin Corporation is considered one of the strongest companies in China, even globally, and is also strong in geological exploration.
Daniyar Serikov
