Zijin Mining's $4 billion acquisition of Allied Gold has hit a regulatory snag in China, with authorities expressing doubts about the deal's terms and risks, according to the Financial Times. The delay underscores growing scrutiny of outbound investments by Chinese firms, particularly those involving significant premiums and assets in complex jurisdictions.
The deal, announced earlier this year, would see Zijin, one of China's largest gold miners, acquire Allied's portfolio of gold mines across Africa, including operations in Mali, Burkina Faso, and Ivory Coast. The transaction was expected to bolster Zijin's international production but now faces an uncertain timeline as regulators probe the strategic rationale.
Regulators are reportedly questioning the premium Zijin is paying for Allied's assets, which include mines in politically volatile regions. Jurisdiction risks—such as potential changes in mining laws, security threats, or government interventions—are a central concern. The delay could force Zijin to renegotiate terms or seek alternative financing structures.
The situation is reminiscent of other Chinese mining deals that faced extended reviews or were scuttled over similar worries. Beijing's tightening oversight of capital outflows, aimed at preserving foreign exchange reserves and reducing financial risks, adds another layer of complexity. Allied's operations in West Africa, where security and regulatory environments have shifted in recent years, amplify these concerns.
Some analysts argue that the delay is a routine part of China's regulatory process and should not be seen as a sign that the deal is doomed. They note that Chinese authorities frequently dig deeper into large acquisitions to ensure alignment with national interests and that such reviews often end with approval, albeit after adjustments. If cleared, the acquisition would position Zijin as a major gold producer globally, with a diversified asset base across several African nations.