Value of mining capital raising deals increases during 2019 first quarter

The value of capital raising deals in the mining industry has increased significantly in the first quarter this year to more than $US11 billion ($15.7 billion), according to GlobalData.

After a substantial decline in the fourth quarter of 2018, the industry rallied with an increase in the value of equity offered coinciding with relatively lower debt offering values.

The largest of the completed deals in the first quarter this year was the $US1.3 billion capital raised by Codelco through international bonds. This was followed by India’s Tata Steel BSL, which raised $US967.3 million in a private placement of shares.

India, China, Chile, Canada and Switzerland were the five largest countries in terms of deal value, accounting for 81.4 per cent or $US9.2 billion of the global total.

Of this, 45.3 per cent was accounted for by deals worth over $US1 billion, 27.1 per cent by deals between $US1 billion and $US500 million and the remaining 27.6 per cent deals below $US500 million.

GlobalData senior mining analyst  Vinneth Bajaj said the increase in capital raising activities was due to a number of factors.

“The slowing Chinese economy alongside the ongoing China-US trade war has weight on the completion rate of mining capital raising activities,” he said.

The positive results come despite the fact that total volume of completed capital raising deals decreased from 378 in the fourth quarter last year to 273 in the first quarter this year.

In contract during the same period however, the number of announced deals increased from 226 to 268.

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