Kurmuk gold project highlights Africa’s changing investment landscape

For much of the past several years, Europe has concentrated on securing reliable access to the minerals needed for the green transition. Policymakers in Brussels have focused heavily on lithium, copper, cobalt and rare earth elements, while also seeking to strengthen economic partnerships across Africa in response to China’s expanding influence. The EU’s mineral policy in Africa focuses on securing critical raw materials for its green and digital transitions.

Yet one of the continent’s most strategically important mining developments is centred not on battery metals, but on gold. The proposed acquisition of Canada’s Allied Gold Corporation by China’s Zijin Gold International, valued at approximately C$5.5 billion has been widely reported by the trade press. But it is far more than a routine corporate takeover. It reflects wider shifts in the balance of investment, diplomacy and resource development in Africa, with implications extending well beyond the mining sector. At the centre of the transaction is the Kurmuk gold project in western Ethiopia.

For Ethiopia, Kurmuk represents a landmark investment that is expected to become the country’s first large-scale modern commercial gold mine. For China, the project would reinforce an already substantial economic presence in East Africa. For European investors, it provides another illustration of how Beijing continues to build long-term influence through carefully targeted investments supported by close government-to-government cooperation. Financially, the transaction is significant. Zijin Gold International, a subsidiary of China’s Zijin Mining Group, has reportedly agreed to purchase Allied Gold through an all-cash offer of C$44 per share, placing the company’s value at around C$5.5 billion.

If completed it would become the largest acquisition in Zijin’s history and expand the company’s portfolio to 12 producing mines across 12 countries. However, the strategic importance of the acquisition lies less in its overall size than in the value of the Ethiopian asset at its core. Although Allied Gold also operates producing mines in Mali and Côte d’Ivoire, Kurmuk has attracted particular attention because of its importance to Ethiopia’s economic ambitions. While gold has long been extracted through artisanal mining, Ethiopia has never previously developed an industrial-scale operation of this magnitude. Once fully operational, it is believed the mine is designed to process around 6.4 million tonnes of ore annually and is expected to produce approximately 290,000 ounces of gold per year during its initial years, before averaging more than 240,000 ounces annually over an estimated ten-year mine life. \

It is thought that proven and probable reserves currently stand at roughly 2.7 million ounces, with exploration continuing to expand the resource base. Investment in the project has already exceeded US$620 million. Construction is understood to have remained on schedule and within budget, with first production expected shortly. Although the project is located close to Sudan, it is situated on the Ethiopian side of the border and is unrelated to the Sudanese town of Kurmuk that has featured in reporting on the country’s civil conflict. Development work has continued without interruption. For Addis Ababa, the mine carries significance beyond its anticipated gold output.

The government sees Kurmuk as evidence that Ethiopia can attract major international investment despite the economic and political challenges it has experienced in recent years. Its Prime Minister has reportedly described the project as a flagship development capable of generating as much as US$1 billion annually in export earnings. Ethiopia’s Ministry of Mines has likewise presented the project as central to its ambition of making mining one of the country’s leading economic sectors. Less widely recognised outside diplomatic and business circles is the reported level of government support for the acquisition itself. According to those familiar with the process, Ethiopian authorities have indicated that they would welcome Zijin as the long-term owner and operator of Kurmuk. There also appears to be considerable alignment between Addis Ababa and Beijing regarding the project’s future.

Indeed, discussions are increasingly reported to focus not simply on this acquisition but on what additional investment could follow. In that respect, Kurmuk is becoming viewed as a foundation for expanding economic ties rather than as an isolated mining project. This reflects the broader trajectory of China-Ethiopia relations. The two countries upgraded their relationship to an “all-weather strategic partnership” in 2023, while Ethiopia joined BRICS the following year. Bilateral trade has grown to more than US$13 billion, and Chinese companies have financed and constructed major infrastructure projects ranging from the Addis Ababa-Djibouti railway to industrial parks across the country. Until now, however, large-scale mining has played a relatively limited role within that wider partnership. For Europe, these developments warrant careful attention rather than concern. European governments have increasingly pursued partnerships with African countries focused on securing supplies of critical minerals essential for the energy transition.

China, by contrast, continues to broaden its engagement across multiple commodities while combining commercial investment with long-term diplomatic and industrial strategy. Kurmuk demonstrates this model clearly. From Ethiopia’s perspective, securing a financially strong and technically experienced long-term investor is important. The acquisition has already passed most of its major milestones. The remaining steps primarily concern final Chinese regulatory approvals for overseas investment, with the completion deadline now extended until 29 July 2026. As with any international transaction of this scale, regulatory and operational risks remain until the deal closes.

Bringing a new mine into production also requires sustained attention to environmental standards, community relations and effective management regardless of ownership. Nevertheless, the broader significance of Kurmuk is already evident. The project illustrates how African governments are increasingly shaping major investment decisions rather than simply hosting them. It highlights China’s ability to integrate commercial expansion with diplomatic engagement. And it poses an important question for European investors: whether Europe is moving quickly enough, and strategically enough, to compete for the next generation of African mining opportunities.

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