A worker operates a drill in a gold mine in El Callao, Venezuela. China National Gold Group Corporation is looking for gold resources in Congo, Brazil, Russia, Venezuela and Mongolia. [Photo/Bloomberg]

Country's largest producer targets Brazil, Russia, Venezuela, Mongolia

TIANJIN - China National Gold Group Corporation (CNGGC), the country's largest gold producer, will increase its annual capacity to 50 tons in five years, out of which 30 to 40 percent will be produced overseas, a company official said on Wednesday.

The company is looking for overseas resources and aims to expand its foreign output to 20 tons by the end of 2015, Du Haiqing, vice-president of CNGGC, told China Daily at a mining conference in Tianjin.

"We are looking for gold resources in Congo, Brazil, Russia, Venezuela, and Mongolia, and most of them are in the early stage of geological exploration," Du said.

He said the company is fairly cautious about overseas investment but is also "active and steady".

China Gold International Resources Corp, the overseas-listed arm of CNGGC formerly known as Jinshan Gold Mine, started the subscription for its IPO in Hong Kong on Wednesday, aiming to raise up to HK$2.4 billion ($309 million).

Proceeds from the offering will be used to boost production capacity, acquire overseas gold and nonferrous metal resources, and replenish working capital. As much as 30 percent of the offering will be used in overseas investment, the company said.

Du said the company's bullion output will reach a record 32 tons this year, up from 28 tons in 2009, to cash in on growing demand for the yellow metal in China.

With around 70 mines across China, the company produces 10 percent of the country's gold, and its deposits will reach 1,300 tons this year, up from 275 tons in 2006.

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Bullion investments have risen sharply in the past few months as the realty market turned bearish.

China, the biggest gold producer and third-largest gold consumer in the world, is expected to report higher output this year, Du said, adding that the country's gold output has already surpassed 320 tons this year.

The nation's gold output in 2009 increased 11.3 percent year on year to 313.9 tons, and accounted for 13 percent of global gold production.

Global demand for gold surged 12 percent year-on-year to 922 tons in the third quarter, driven by higher demand from India, China, Russia and Turkey, according to a report by the World Gold Council (WGC) released on Wednesday.

Total demand will be driven by Indian and Chinese consumption, as well as higher demand for gold jewelry in the key Indian market. Additionally, ongoing concerns over fiscal imbalances allied to currency tensions will continue to support investment demand for gold, the WGC said.