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The global value of financial deals in the mining industry fell by almost 15 per cent in 2018 despite an overall increase in mergers and acquisitions, according to research from GlobalData.
Just over half (50.9 per cent) of the $US114 billion ($158.5 billion) value recorded for the year was the result of mergers and acquisitions.
GlobalData stated that the primary reason for the dip was a fall in capital raising through equity and debt offerings and a lower rate of acquisitions. Capital raising activities accounted for the remaining 49.1 per cent of value.
Out of 3000 mining deals in 2018, just five accounted for 15.8 per cent of global deal value. Each of these five deals were worth over $US2 billion each, with the largest being Tianqi Lithium’s acquisition of 23.77 per cent of Sociedad Química y Minera (SQM) for $US4.1 billion.
Despite the drop in global mining deal value, mining, energy and utilities were all cited as top contributors to a national mergers and acquisitions record in Australia last year, particularly in the mid-market sector (defined as deals between $10 million and $250 million in value).
Headline examples of mining merger and acquisition deals include OZ Minerals’ acquisition of Avanco ($418 million), South32’s acquisition of Arizona Mining ($1.8 billion) and Ausdrill’s acquisition of Barminco ($271.5 million).
The five largest countries in terms of deal value were China, Canada, Australia, the United States and Indonesia, which collectively accounted for 65.2 per cent ($US74.5 billion) of global mining deal value for the year.