China's Zijin Mining Group, the second-largest gold miner in the country, plans to double its capital expenditure budget to more than Yuan 2 billion ($2.58 billion) in 2006, mainly to acquire overseas copper and gold mining projects, the company said in a statement Thursday.

"We are now in talks to acquire several mining projects in the overseas markets," Chairman Chen Jinghe said. "We may complete one acquisition which is a copper mining project in September." The Fujian-based Zijin wants to acquire overseas projects by partnering with local mining firms and taking majority control in the joint ventures.

Chen said Zijin, which had Yuan 1.17 billion cash as at the end of June, has sufficient funds to acquire overseas projects. If opportunities arise to acquire larger projects, the company may sell additional shares to fund new investments, he added. The Hong Kong-listed company, which originally set aside Yuan 1 billion for capital expenditure in 2006, has spent Yuan 1.6 billion in the first six months. It plans to spend about Yuan 500 million more in the second half, with Yuan 200 million earmarked for acquisitions.

During the first half of the year, the selling price of Zijin's copper surged 102%, while gold jumped 32.72%. "Gold price in the second half will be higher than the first half level," said Zijin chief financial officer Zhou Zhengyuan. The current gold price is $166/g, up from the average of $152/g in the first half. Gold prices have risen on the back of high oil prices and weakening US dollar, Zhou said.

"We have revised upwards Zijin's 2006 earnings forecast by 30.7% due to higher prices of gold," Bank of China International analyst Belle Chan said in a research note. The bank projects Zijin's net profit will double to Yuan 1.54 billion in 2006, up from Yuan 704 million a year ago.

The company aims to produce 40 mt of gold in 2006, up 90% from 2005, and 32,000 mt of copper, up 72% year on year.