Mining mergers plunge as fall in prices weighs

MINING M&A activity worldwide plunged in the first half of the year as falling commodity and equity prices dented confidence, according to fresh research published today.

Deal volume was down 31 per cent in the six months from January to June compared to a year ago, while its value plunged a staggering 74 per cent, according to the data from consultancy PwC.

According to the report, Russia and Kazakhstan surprisingly took the top two spots for most active M&A by geography in the first half of 2013. Russia accounted for just over a quarter of deals, followed by Kazakhstan at 19 per cent, and the US with 11 per cent.

PwC said the statistics reflected a shift by miners from buyers to sellers, such as Rio Tinto’s unloading of its 80 per cent stake in the Northparkes copper mine in Australia to a Chinese buyer.

“Traditional takeovers of entire companies are taking a back seat to joint ventures and spinoffs. Expect more of these non-traditional and creative deals to round out M&A activity during the second half of 2013,” said Jason Burkitt, UK mining leader at PwC.

Burkitt said he expected M&A activity in the sector to remain muted for the rest of this year and next.