(Yicai) Nov. 14 -- Zijin Mining Group confirmed to Yicai that illegal mining had been ongoing at its mine in Colombia since before China’s largest gold producer acquired it in 2020, and pointed out that the impact on earnings has been minimal.

The Wall Street Journal reported yesterday that about 3.2 tons of gold worth hundreds of millions of US dollars has been stolen from Zijin Mining’s Buriticá mine by a drug-trafficking gang that has taken over 30 miles of tunnels.

“The illegal miners entered by digging holes, and the actual amount of illegal mining is difficult to count,” the person in charge of the board secretary’s office at the Longyan-based company told Yicai today. “We don't know where the ‘three tons of gold’ circulating on the internet came from.

“The previous [Colombian] government cracked down on illegal mining with great force, while the current administration has a more ambiguous attitude toward it,” the person said.

Gold production at the mine has increased steadily over the past two years, and the impact of illegal mining on the company’s earnings has been minimal, the person added.

Shares of Zijin Mining [SHA: 601899] closed down 2.4 percent at CNY15.61 (USD2.16) apiece in Shanghai today, while its Hong Kong-listed stock [HKG: 2899] fell 3.7 percent to HKD14.42 (USD1.85).

Zijin Mining announced in 2019 that it had acquired a controlling stake in Continental Gold from Newmont Gold, the world’s largest gold company, for USD1 billion. The transaction closed in early 2020. Continental Gold owns the rights to the Buriticá mine, one of the largest and highest-grade gold mines in the world.

According to information previously released by Zijin Mining, the Buriticá project has gold resources of more than 300 tons, and the mine produced 8.3 tons of gold last year.

There were attacks on the Buriticá mine last year and in 2022, Zijin Mining said earlier. On May 17, 2023, the mine was bombed in an attack that killed two people and injured 14. Initial investigations revealed that the attack was carried out by a local illegal mining organization.

At that time, Zijin Mining called on the Colombian authorities to beef up the crackdown on illegal mining-related violence and to protect the rights and interests of companies and the personal safety of their employees.

At the end of last year, Zijin Mining President Chen Jinghe noted in a speech that operations at Buriticá had been repeatedly disrupted by illegal mining groups, resulting in serious casualties.

Editor: Tom Litting