Global mining deals falling fast

The value of global mining deals fell 30 per cent in 2012, according to the latest deals report from PricewaterhouseCoopers.

According to the new report the number of global deals fell to its lowest level since 2005, with the value also dropping from $US149 billion to $US110bn.

 

“When you consider that the Glencore-Xstrata merger accounted for $US54 billion, almost half 2012’s total value, it's clear miners were in a cautious mood,” PwC Australian energy, utilities and mining leader Jock O'Callaghan said in the report.

 

O'Callaghan said major deals were unlikely to go ahead this year, and most of the business would be driven by larger companies offloading their assets.

 

Excluding the Glencore-Xstrata megadeal, Canadian miners were the most active in 2012 and accounted for 29 per cent of all deals, followed by Britain with 11 per cent and Australia with nine per cent.

 

PwC said it expected deals this year to come in “well below” last year's reduced numbers, but cashed up mid-tier miners were tipped to buy up some assets as the majors offloaded more projects.

 

While the majors will be actively divesting non-core assets, those will be cautiously evaluated, and where the opportunities make sense, we'll see some deals happen,” the report said.

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