Zijin Mining Group Co., China’s biggest gold miner by market value, is studying a move into shale gas and will target buying “super” mines after falling bullion prices and rising costs cut its earnings.
The company will explore entering new energy markets, including shale gas, “while continuing to focus on gold and copper mining,” Shanghang, Fujian province-based Zijin Mining said in an exchange filing March 29. Net profit dropped 59% to $342 million in 2013, it said in a separate statement.
China, which holds the world’s biggest shale gas reserves, has drawn investment from the nation’s biggest oil companies including Sinopec and PetroChina Co. Zijin Mining also said it will spend about $1.3 billion this year in equity and mining rights and actively seek to acquire several miners and projects, targeting “super large mines.”
China holds 25.08 Tcm (866 Tcf) of exploitable onshore shale gas reserves, the Land and Resources Ministry said in March 2012. The U.S. has 13.65 Tcm (482 Tcf) of technically recoverable gas from shale formations, the U.S. Energy Information Administration said in January 2012.
The Asian country has set a national output target of 6.5 Bcm (230 Tcf) by 2015, and as much as 100 Bcm (3.5 Tcf) by 2020. The goals are meager compared with U.S. output of 266 Bcm (9 Tcf) in 2012.
Bullion last year slumped the most since 1981. Average prices for spot gold in London fell 15% last year, while copper dropped 7.9%, Zijin Mining said in the earnings statement.
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