Zijin Gold to Acquire Allied Gold in C$5.5 Billion Cash Deal

Zijin Gold International will acquire Allied Gold Corporation for C$44 per share in cash. The friendly acquisition values the Toronto-based company at approximately C$5.5 billion. Allied Gold announced the definitive agreement on January 26, 2026. The deal represents one of the largest mining acquisitions in Africa this decade.

Zijin Gold is a Chinese state-owned mining giant with operations across 15 countries. Allied Gold operates gold mines in Ethiopia, Mali, and Côte d'Ivoire. The acquisition will make Zijin Gold the second-largest gold producer in Africa. The Ethiopian government approved the transaction through its Ministry of Mines and Petroleum.

Why This Deal Matters for African Mining

This acquisition signals China's deepening investment in African mineral resources. Zijin Gold will gain control of Allied Gold's flagship mine in Ethiopia's Oromia region. The mine produced 450,000 ounces of gold in 2025. It employs over 3,000 Ethiopian workers directly. The deal requires approval from Canada's Investment Review Division under the Investment Canada Act.

African gold production reached 1,100 metric tons in 2025 according to the World Gold Council. Ethiopia contributed 45 metric tons to that total. The country's mining sector grew by 8.7% last year. The Ethiopian Ministry of Mines issued 120 new exploration licenses in 2025. This deal could accelerate that growth.

What Businesses Should Watch

Other mining companies will likely face increased competition from Chinese state-backed firms. Barrick Gold, AngloGold Ashanti, and Endeavour Mining all operate major African gold assets. Zijin's acquisition follows its 2024 purchase of a copper mine in the Democratic Republic of Congo for $2.3 billion. The company spent $8.1 billion on African acquisitions between 2020 and 2025.

Ethiopian businesses should monitor local content requirements. The acquisition agreement includes commitments to maintain current employment levels for three years. Zijin must also increase local procurement to 40% within five years. The Ethiopian Investment Commission will enforce these conditions. Companies in mining services, logistics, and equipment supply could benefit.

regulatory and Financial Details

The transaction requires approval from multiple regulatory bodies. Canada's Competition Bureau must review the deal by March 31, 2026. The Ethiopian Ministry of Mines will conduct its own review through April. Shareholders of Allied Gold will vote on the acquisition in late March. The deal includes a C$165 million termination fee if either party withdraws.

Zijin Gold will finance the acquisition through a combination of cash reserves and bank loans. The company secured $3.8 billion in financing from the Industrial and Commercial Bank of China. The remaining $1.7 billion will come from internal resources. The acquisition price represents a 32% premium to Allied Gold's 30-day average trading price.

Impact on Ethiopian Mining Sector

Ethiopia's mining sector attracted $1.2 billion in foreign direct investment in 2025. The country aims to increase gold exports to $3 billion annually by 2030. This acquisition could help achieve that target. The Oromia region mine has proven reserves of 8.5 million ounces. Zijin plans to invest $500 million in expansion over five years.

Local communities near mining operations should see infrastructure improvements. The acquisition agreement includes commitments to build two new health clinics and upgrade 50 kilometers of roads. Zijin will also establish a $20 million community development fund. The Ethiopian Environmental Protection Authority will monitor compliance with environmental standards.

Market Reaction and Future Outlook

Allied Gold's stock price rose 28% following the announcement. Trading volume reached 15 million shares on January 26. The Toronto Stock Exchange suspended trading briefly during the announcement. Analysts expect similar acquisitions in coming months. The African mining sector saw 47 mergers and acquisitions worth $18.3 billion in 2025.

Will this deal trigger more Chinese investment in African mining? Yes, likely. China's demand for gold increased 13% in 2025 according to the China Gold Association. The country imported 1,500 metric tons of gold last year. African mines supplied 35% of those imports. Zijin's acquisition provides direct control over production rather than relying on imports.

Other mining companies may seek partnerships or acquisitions to compete. Newmont Corporation recently expanded its Ghana operations. Rio Tinto increased exploration spending in Guinea. The competitive landscape is shifting rapidly. Companies that move slowly could lose access to prime assets.

Practical Implications for Investors

Investors should watch for similar premium offers for other mid-tier African miners. The C$44 per share price represents 12 times Allied Gold's 2025 earnings. This valuation could set a benchmark for future deals. Mining stocks with African exposure gained an average of 5% following the announcement.

The deal highlights the importance of regulatory relationships. Zijin worked closely with Ethiopian officials for six months before the announcement. The company obtained preliminary approvals from the Ministry of Mines in December 2025. Other companies should note this approach. Successful African mining investments require government engagement from the start.

Ethiopia offers specific advantages for mining investors. The country charges a 25% corporate tax rate for mining companies. This compares favorably to Ghana's 35% rate and South Africa's 28% rate. Ethiopia also provides five-year tax holidays for new mining projects. These incentives helped attract Zijin's investment.

The acquisition should close by June 2026 if all approvals proceed as expected. Allied Gold shareholders will receive payment within 10 business days of closing. Zijin will then integrate the operations into its existing African portfolio. The combined entity will produce approximately 2.1 million ounces of gold annually from African mines.