Monday, 24th May 2004 (3457 views)

Two gold companies from East China's Shandong Province have announced plans to go public in Hong Kong.

The producers of the precious metal, Zhaoyuan Gold Co and Shandong Laizhou Gold Mining Co are preparing for listings in October and next year respectively.

Metal analysts explained that listing is a new way to raise funds in China's gold industry and there are so far three companies listed from the industry - Zhongjin Gold Co, Shandong Gold Co and Zijin Mining Co.

Luo Pengfei, a metal analyst with CITIC Securities Co told China Daily: "The fragmented industry needs capital to produce more gold to satisfy mounting domestic demand for the metal and to create bigger conglomerates through mergers and acquisitions."

Zhaoyuan was set up earlier this month and plans to double gold output to 31 tons and be one of the top 30 gold producers in the world by next year.

The Chinese government hopes to set up 12 gold conglomerates through acquisitions and mergers that will compete internationally by 2005.

A number of gold producers in China now conduct spot transactions in the exchange rather than selling all their gold to the central bank.

 

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