"M&A on the rise in mining industry"

" M&A on the rise in mining industry \r\n\r\nDealmaking in the mining industry just became hotter this year after an unsolicited proposal to combine two of the world's top senior gold producers\u2014a merger that could turn into the biggest gold mining sector acquisition ever.\u00a0\u00a0Newmont Corporation's\u00a0 bid to acquire \u00a0100% of Australia's Newcrest Mining\u2014rejected by the takeover target at this point\u2014sparked talk about a new wave of consolidation in the mining sector, driven by high gold prices and the pursuit of supply of key metals for the energy transition, including copper and lithium.\r\n\r\nAnalysts and industry professionals expect mining companies to accelerate M&A activity this year.\r\n\r\nFollowing Newmont's $16.9 billion bid, Newcrest's board unanimously\u00a0 rejected \u00a0the offer \"as it does not represent sufficient value for Newcrest shareholders,\" but said that it was ready to provide non-exclusive access to some limited non-public information \"in order to determine if Newmont can provide an improved proposal for consideration by the Board that appropriately reflects the value of Newcrest.\"\r\n\r\nRegardless of whether Newmont will submit a higher offer for Newcrest, the mining industry is set for a new wave of consolidation, industry executives say.\r\n\r\nThis year is likely to see more mergers in the gold mining sector, Endeavour Mining's President and chief executive S\u00e9bastien de Montessus told Reuters in an\u00a0 interview \u00a0last month, days after news broke of Newmont's mega-merger proposal.\r\n\r\n\"I think we will probably see more [deals], simply because some companies are lacking a clear strategy,\" de Montessus told Reuters.\r\n\r\n\"You've got historical companies like IAMGOLD, Gold Fields, AngloGold, Kinross, where there are a lot of questions about whether their portfolio is well-suited, and whether their strategy is clear enough for investors and shareholders.\"\r\n\r\nMore mergers and acquisitions in the gold mining sector are inevitable as companies will look to replace depleting assets, Harmony Gold's CEO Peter Steenkamp told\u00a0 Reuters \u00a0this week.\r\n\r\nIt's not only the gold sector that is ripe for consolidation, according to industry professionals.\r\n\r\nAlex Christopher, president of the Prospectors & Developers Association of Canada (PDAC), told\u00a0 Bloomberg \u00a0that a lot of the associations' small to medium-sized firms would be looking for growth through deals.\r\n\r\n\"Clearly a lot of them look to M&A for growth, though. They're often trying to discover assets that a bigger company would later take on,\" Christopher told Bloomberg ahead of the world's premier mineral exploration and mining conference in Toronto beginning on March 5.\r\n\r\nWeeks before the conference, several major mining deals were announced or completed. Rio Tinto, for example, has\u00a0 completed its acquisition \u00a0of Turquoise Hill Resources for around $3.1 billion, significantly strengthening Rio Tinto's copper portfolio. B2Gold\u00a0 has agreed to buy \u00a0Sabina Gold & Silver Corp and its gold-mining project in Canada, while mining giant BHP could be close to its\u00a0 biggest acquisition in over a decade \u00a0with the proposal to buy Australian copper-gold producer OZ Minerals.\r\n\r\nCompanies are adding more copper assets in view of an\u00a0 expected copper supply crunch \u00a0in the energy transition.\u00a0A\u00a0 huge shortage of copper \u00a0is looming, mining and commodities giant Glencore said\u00a0at the end of last year,\u00a0reiterating warnings from other industry players and analysts that a supply crunch could slow the energy transition.\r\n\r\nGrowing efforts at decarbonization are raising demand for key metals such as lithium, cobalt, copper, and nickel.\r\n\r\nThe energy transition was the key driver behind 25% of the top 20 mergers and acquisitions (M&A) deals in mining in 2022, as the industry responded to consumer and shareholder demand for portfolio diversification and sustainability, data and analytics company GlobalData said in a\u00a0 report \u00a0last month.\r\n \r\n\r\n\"Mining companies are shifting their portfolios to focus more on future-facing metals,\" William Tyson, Associate Analyst, Thematic Intelligence at GlobalData, said, commenting on the report.\r\n\r\n\"The shortages of these metals and the growth in demand for EVs have prompted M&A deal activity as mining companies consolidate to fill the gap in supply.\"\r\n\r\n "

"M&A on the rise in mining industry"

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