China’s Zijin Abandons $4 Billion Allied Gold Takeover, Retains Stake in Ethiopia’s Kurmuk Mine
China’s state-backed Zijin Mining Group has abandoned its proposed USD 4.01 billion (CAD 5.5 billion) acquisition of Canada’s Allied Gold Corporation after months of regulatory delays, ending what would have been one of the largest mining transactions of 2026 while preserving its strategic interest in Ethiopia’s flagship Kurmuk Gold Mine.
The two companies announced on Wednesday that they had mutually agreed to terminate the takeover after the transaction deadline expired without obtaining all required regulatory approvals.
Instead of acquiring Allied Gold outright, Zijin will invest approximately USD 295 million (CAD 417 million) to acquire a 9.2 percent strategic stake in the Canadian miner through a private placement expected to close around August 10, subject to final stock exchange approvals.
The original agreement, signed in January, would have given Zijin control of Allied Gold’s producing mines in Mali and Côte d’Ivoire, as well as the Kurmuk Gold Mine in Ethiopia’s Benishangul-Gumuz Region, one of the country’s largest new mining developments.
Chinese Regulatory Delays Ended the Deal
The transaction had already received shareholder approval and regulatory clearances in Canada and several African jurisdictions. However, Chinese regulators did not grant the approvals required for Zijin to complete the overseas acquisition before the extended deadline.
According to reporting by The Globe and Mail, approvals from China’s National Development and Reform Commission (NDRC) and other agencies became the principal obstacle preventing completion of the deal.
Chinese authorities reportedly examined the transaction’s valuation and the political and operational risks associated with Allied Gold’s operations in West Africa before the acquisition deadline expired.
Ethiopia’s Kurmuk Project Remains Unchanged
Although the acquisition has collapsed, development of the Kurmuk Gold Mine is expected to continue under Allied Gold’s ownership.
Located in western Ethiopia near the Sudan border, the project is scheduled to begin production in the coming weeks, with the company targeting first gold during the second half of 2026.
Allied Gold expects Kurmuk to produce between 240,000 and 270,000 ounces of gold in 2027, rising to approximately 300,000 ounces in 2028, positioning it among Africa’s largest new gold operations.
Under Ethiopia’s mining framework, the government will hold a 7 percent free-carried equity stake in the project once commercial production begins.
Markets React
Investors reacted negatively to the collapse of the takeover.
Shares of Allied Gold fell nearly 18 percent on the Toronto Stock Exchange following the announcement, reducing the company’s market value to roughly CAD 3 billion. The stock also recorded sharp losses in New York trading.
Strategic Partnership Continues
While the full acquisition has been abandoned, Zijin’s minority investment provides Allied Gold with additional capital to complete construction at Kurmuk and expand its operations across Ethiopia, Mali and Côte d’Ivoire.
The investment also enables Zijin to maintain a strategic presence in East Africa without assuming full ownership of Allied Gold’s international portfolio.
The collapse of the deal highlights the growing influence of regulatory approvals, geopolitical considerations and host-country interests in determining the outcome of cross-border mining transactions, particularly those involving strategic mineral assets.
Key Figures
| Indicator | Value |
| Original takeover value | USD 4.01 billion (CAD 5.5 billion) |
| New Zijin investment | USD 295 million |
| Equity stake acquired | 9.2% |
| Kurmuk expected production (2027) | 240,000–270,000 oz |
| Kurmuk target (2028) | 300,000 oz |
| Ethiopian government stake | 7% (free carried) |
Source: The Reporter