China is considering a merger between China Minmetals Corp, one of the country’s largest miners and metals traders, and China National Gold Group, as Beijing pushes consolidation of its state-run firms, sources with knowledge of the matter said.
Three sources with knowledge of the discussions said the two state-owned firms have been in negotiations for months, though any agreement could still be some time away.
The talks between two of China’s largest metals producers are part of Beijing’s broad efforts to shake up its indebted and inefficient state sector, streamline the number of companies and create globally competitive firms in sectors including power generation, shipping and metals.
Minmetals, which controls Hong Kong-listed unit MMG, said it was not aware of any discussions over a tie-up and said it would publish any statement on its website.
China National Gold – one of the top gold miners in a country that has become the world’s largest producer – declined to comment.
The State Assets and Supervision Administration Commission (SASAC), which oversees the sector and favours an overall shake-up, did not respond to a request for comment.
A combination of Minmetals, one of China’s biggest state-owned enterprises, and much smaller, precious metals-focused CNG would not be without challenges, not least in terms of scale.
It was not immediately clear how a combined group would be managed.
China Minmetals, already a major mining company, became the world’s largest metallurgical construction and operation services company after merging with state-owned China Metallurgical Group in 2015.
With total assets of around $236bn globally, Minmetals became one of the world’s largest copper miners when it bought Australia’s Oz Minerals in 2009 and Glencore’s Las Bambas copper mine in Peru for $7bn in 2014 – one of China’s largest overseas acquisitions at the time. Debt racked up as a result of the Peru deal, combined with plunging global commodities prices then dragged Minmetals to a loss.
It reported an 18.2bn yuan ($2.7bn) loss in 2015.
That turned around to a 4.1bn yuan profit in 2016.
It signed an exploration deal with Rio Tinto last month, and employs over 240,000 people.
China National Gold is a much smaller company, with combined total assets of around $9bn from its two listed entities.
It is China’s only gold industry firm directly managed by the central government, with operations also in silver, copper and molybdenum.
China Minmetals owns eight listed companies in China and Hong Kong, including Metallurgical Corp of China which has a market capitalisation of around $15bn, and MMG with a $3bn market value.
The two listed units under China National Gold have a combined market value of around $5.8bn.
The management make-up of a merged entity is not clear.
One of the sources said China Minmetals’ chairman He Wenbo, 62, was expected to be near retirement.
And Guo Wenqing, president, is expected to move to SASAC after the 19th communist party congress that is to be held later this year, the source added.
China National Gold’s board members, by contrast, are newly confirmed, having been appointed by SASAC just months ago.
Minmetals did not reply immediately to a Reuters request for comment on its personnel changes. If carried out, this would be the second marriage of metals companies overseen by Beijing as part of the government’s goal to fight overcapacity in its bloated heavy industries.
Last year, Baosteel’s takeover of its smaller, debt-laden rival Wuhan created China’s largest steelmaker.
Coal giant Shenhua Group Corp Ltd and top-five state power producer China Guodian Corp are in talks to merge some assets, Reuters reported in June.
Reuters reported in May that chemical giant Sinochem was in talks with ChemChina, which completed its $43bn acquisition of Swiss seeds company Syngenta.



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