Zijin Gold: Kurmuk Ethiopia Acquisition Boosts Allied Gold Project

• Chinese firm Zijin Gold International acquired a 9.2% stake in Canadian mining company Allied Gold for nearly $300 million.
• The acquisition includes partial ownership of the Kurmuk gold project in Ethiopia, located near the conflict-ridden Sudanese border.
• Allied Gold is commencing operations in August and expects to produce 300,000 ounces of gold per year from 2027-2030, valued at about $1 billion.
• The Kurmuk area's proximity to Sudan's conflict zone raises concerns about potential links to conflict financing, which Ethiopia and the UAE deny.
• Zijin Gold is part of Zijin Mining, which counts Chinese state entities and the UAE's Abu Dhabi Investment Authority (ADIA) among its shareholders.

The investment in a gold project located near an active conflict zone presents considerable compliance and reputational challenges for the involved companies.

A significant minority stake in Canadian mining firm Allied Gold has been secured by Zijin Gold International, a Chinese mining entity. The transaction, valued at nearly $300 million, grants Zijin Gold approximately 9.2% of Allied Gold's issued and outstanding common shares, as confirmed by the Canadian company. This acquisition provides Zijin Gold with partial ownership of Allied Gold's extensive portfolio, which notably includes the Kurmuk gold project situated in Ethiopia's Benishangul-Gumuz Region.

The Kurmuk project holds strategic importance due to its location near the Sudanese border. Allied Gold is commencing operations at the site in August and projects a substantial gold output of 300,000 ounces per year from 2027-2030, with an estimated market value of approximately $1 billion. The capital raised from Zijin Gold's investment is earmarked to bolster Allied Gold's three existing mining operations, facilitating the completion and accelerated development of the Kurmuk project.

This deal also underscores the growing convergence of Chinese and Emirati investment interests within Ethiopia's burgeoning mining sector. Zijin Gold operates as a subsidiary of Zijin Mining, a larger conglomerate whose shareholder base includes both Chinese state-owned entities and the Abu Dhabi Investment Authority (ADIA). ADIA, the sovereign wealth fund of the UAE, holds a substantial position as one of Zijin Mining's principal shareholders, having invested around $680 million in the company, according to reports from Middle East Online.

The Kurmuk gold project's geographical placement, approximately 20 kilometers from the Sudanese locality of the same name, has drawn considerable scrutiny. This area lies in close proximity to Sudan's Blue Nile State, a region embroiled in the ongoing conflict between the Sudanese Armed Forces and the Rapid Support Forces (RSF). The broader war, which erupted in April 2023, has led to widespread displacement of millions and numerous allegations of atrocities against civilians, with both the RSF and the Sudanese Armed Forces accused of serious violations of international humanitarian law.

Historically, the Kurmuk region itself has been a site of conflict and civilian displacement, characterized by both informal and semi-mechanized gold mining activities. Middle East Online has highlighted allegations linking this western Ethiopian territory to logistical and military support for the RSF, claims that both Ethiopia and the UAE have explicitly denied. The publication further questioned the potential ramifications of expanded gold mining in such a volatile area on the Sudanese conflict, particularly given the UAE's significant role in the regional gold trade.

The investment in a gold project located near an active conflict zone presents considerable compliance and reputational challenges for the involved companies. Middle East Online specifically inquired with Allied Gold about measures being implemented to ensure that gold extracted from the Kurmuk project would not inadvertently finance armed groups in Sudan. However, Allied Gold did not provide an on-record response to these questions, nor did Zijin Gold offer any comment to the publication.

This lack of transparency regarding supply chain integrity in a conflict-affected region underscores the heightened due diligence requirements for companies operating in such environments. The Ethiopian government, through its Mines Minister Habtamu Tegene, has expressed a welcoming stance towards increased investment across various sectors, including gold, critical minerals, petroleum, and fertilizer. Nevertheless, the specific context of the Kurmuk project necessitates rigorous scrutiny to mitigate risks of complicity in conflict financing and to uphold international humanitarian law principles.

The current minority investment by Zijin Gold follows a series of earlier, unsuccessful attempts to secure a larger stake or outright acquisition of Allied Gold. In February 2025, Allied Gold had announced a $500 million agreement with Ambrosia, an Emirati company, which would have granted Ambrosia a 50% interest in Allied Gold's mining assets. This deal ultimately collapsed after certain conditions were not met.

Subsequently, Zijin itself pursued a full acquisition of Allied Gold, proposing a deal worth approximately $4 billion. However, this transaction was also abandoned due to the inability of the companies to obtain the necessary Chinese regulatory approval. Following these setbacks, the parties ultimately proceeded with the current minority investment, which sees Zijin Gold acquire a 9.2% stake in Allied Gold, whose broader portfolio also includes mining operations in Mali and Côte d'Ivoire.

This acquisition highlights significant compliance and reputational risks for companies involved in mining projects near conflict zones, particularly concerning potential links to conflict financing and allegations of supporting armed groups. Lawyers and compliance officers should advise clients on enhanced due diligence requirements for supply chain integrity, sanctions compliance, and anti-money laundering (AML) protocols when investing in or operating in such regions.

Source: Original reporting via Middle East Online