China National Gold Group Co, the country's largest gold producer, said on Friday it would invest at least 2 billion yuan in a new joint venture company with Gansu Jinchuan Group Co to develop Asia's largest gold mine.

One week earlier, the company, also known as China Gold, won the mining rights for Yangshan gold mine, which has proven deposits estimated to be the largest in Asia, and the sixth in the world.

Song Xin, vice-president of China Gold, told China Daily on Friday the new joint venture would be in operation in about two years time.

"We are conducting further geological exploration," said Song in a media briefing in Beijing on Friday.

China Gold produced a total of 49 tons of gold in the first six months of 2008. The aggregate output of China Gold in 2008 is expected to reach 80 tons.

Sun Zhaoxue, president of China Gold Group Co, said: "Although the mining rights of Yangshan mine belongs to the group company, the assets of the mine will be injected into the listed subsidiary, Zhongjin Gold Co, as soon as possible to strengthen its core competitiveness in the industry."

Zhongjin has the capacity to process 15-20 tons of ore, up 25 percent year-on-year.

According to Zhang Bingnan, vice-chairman of China Gold Association, the total national output of gold in the first half of 2008 reached 129.08 tons, up 5.6 percent year-on-year. In 2007, China produced a total of 270.49 tons of gold, exceeding South Africa becoming the largest gold producer in the world.

With its advanced technology in developing gold mines and rich management expertise, China Gold beat its competitive bidders and obtained the mining right for 2.18 billion yuan, which was announced by the company on July 27.

Yangshan Gold Mine was founded in 2007 in Gansu province. The mine is estimated to have a proven deposit of more than 308 tons of gold and a prospective reserve of 500 tons.

Gansu Jinchuan Group, the country's largest nickel miner will form a joint venture with China Gold and hold a 40 percent stake in the new joint venture.

(China Daily August 2,2008)