China’s largest gold miner, Zijin Mining Group (OTC Pink: ZIJMF, HKEX: 2899, SHA: 601899), is expanding into the precious metals streaming sector—a financing model where miners receive upfront cash in return for a share of future metal production.
Through its Hong Kong-based subsidiary, Gold Mountains Asset Management, Zijin is establishing China’s first streaming fund operated by a mining company. The fund aims to invest between US$200 million and US$400 million in 2025 alone.
The fund will focus on resource-rich yet capital-intensive regions such as Africa and South America.
“We’re looking for quality resources that are undervalued,” said Lisa Liu, managing director of the asset management division, in an interview with the Financial Times. “We are very optimistic about gold prices.”
Gold has climbed 27% since the start of the year, hitting record highs amid geopolitical tensions and economic uncertainties, especially concerning U.S. trade policies. These factors have pushed investors toward gold as a safe-haven asset.
Zijin, with listings in Hong Kong and Shanghai and a market capitalization of approximately US$68 billion, is already among the world’s most diversified and aggressive metals companies.
As the world’s sixth-largest gold producer, Zijin holds significant stakes in copper, zinc, and lithium projects across countries including Serbia, Colombia, Australia, and the Democratic Republic of Congo.
However, streaming represents a new strategic direction for Zijin. Unlike traditional miners who take on ownership and operational risks, streaming companies provide upfront capital to secure rights to future metal production—often at a fixed, below-market cost—without owning or operating the mines.
Zijin plans to use this model to complement its core mining operations. Liu, a geologist by training, believes the company’s mining expertise will give it an advantage in evaluating deals and managing risks, positioning Zijin to compete with established streaming leaders like Franco-Nevada (TSX: FNV, NYSE: FNV) and Wheaton Precious Metals (TSX: WPM, NYSE: WPM).
Notably, Zijin partnered with Wheaton last October in an US$825 million financing package for the Koné gold project in Côte d’Ivoire, operated by Montage Gold (TSXV: MAU, OTCQX: MAUTF). Zijin contributed US$125 million, including US$75 million earmarked for a gold stream. In April, it signed a US$25 million streaming deal with TongGuan Gold Group (HKEX: 0340) for a mine in China’s Gansu province.
“The quality of gold mines is declining,” Liu explained, citing falling ore grades and underinvestment in exploration. “Under-investment has been a significant challenge. Finding quality projects is increasingly difficult.”
Understanding Streaming and Its Growing Appeal
Streaming, along with royalty financing, has gained traction as an alternative investment in mining. In these agreements, companies provide capital to miners in exchange for the right to buy a portion of the mine’s output—usually gold or silver—at a fixed price.
This approach offers several advantages: exposure to rising commodity prices, protection from cost overruns and operational risks, and flexibility to hold metals during market downturns.
For miners, streaming delivers immediate capital, especially critical during costly development and expansion phases, without adding debt or diluting shareholder equity.
A landmark example is Franco-Nevada’s 1986 deal for a 4% royalty on the Goldstrike mine in Nevada, which has since generated over US$1 billion in revenue and remains a model in the industry.
Despite the potential for high returns, streaming also carries risks. For instance, Franco-Nevada faced a US$1 billion loss after Panama closed First Quantum Minerals’ Cobre Panama mine in late 2023 and is now pursuing US$5 billion in damages.
Zijin’s entry into streaming signals a broader trend: China, the world’s largest gold producer and consumer, is gearing up to increase its financial influence in the global precious metals market—not only through direct mine ownership but also via innovative financing models like streaming.
