Johannesburg - South African mining major Gold Fields may have been behind Australian mining junior Sino Gold's decision to halt exploration activities at what was meant to become the first foreign-owned gold mine in Chinese-occupied Tibet.
Sino Gold announced last week that a recommendation to discontinue activity at Jinkang had been accepted by the board.

"Divestment of Sino Gold's interest in the joint venture is being pursued," it said in its latest quarterly report.

Gold Fields has a 10 percent stake in Sino Gold and a 50-50 joint venture with Sino to acquire and explore gold properties in China's richest gold producing region, Shandong Province.

While Gold Fields was not directly involved in the Jinkang project, Sino's plans to establish mining operations in a joint venture with the Chinese government rattled the cages of human rights and environmental activists, who made Sino the target of an aggressive international campaign calling for a halt to the development of any mines in Tibet while it is still occupied by the Chinese.

These non-governmental organisations expressed concern that Sino and its shareholders would be publicly backing China's "colonial stranglehold over Tibet".

Gold Fields executives, who have been very discreet about their position on Tibet, reportedly held an executive committee meeting with Sino management at which the Tibetan issue was discussed.


Ian Cockerill, the chief executive of Gold Fields, told Business Report this week that it had questioned the importance of the Jinkang project.

With solid prospects outside the province, this one project had to be weighed against the potential damage that staying in Tibet could do to all shareholders' corporate reputations.

Willie Jacobsz, Gold Fields' senior vice-president investor relations and corporate affairs, said: "We have no plans to mine in Tibet. We are not mining in Tibet and we have no intention of ever mining in Tibet."

But as the world's fourth-largest gold producer, Gold Fields is well aware that it must keep all its doors open.

While Sino's announcement was buried at the end of its quarterly operations report to December 2003 and implied that it was pulling out because there was not enough gold on site to justify a mine, the decision has been praised by friends of Tibet.

"We are pleased that Sino Gold has chosen to do the right thing," said Paul Bourke, the executive officer of the Australia Tibet Council.