Industry Trend Analysis - Mining M&A: Asia & Gold Shine - JUNE 2014

BMI View: Mining M&A will continue to pick up over the coming quarters with the bulk of deal flows concentrating in Asia and gold. Despite China's push to secure resource investment globally, mining M&A will not stage a full return to the headier times of last decade.

We expect merger and acquisition (M&A) activity in the mining sector to pick up in 2014-2015. This will be driven by the depressed valuations of mining firms, especially junior miners, the push to enhance operational efficiency and China's continued appetite for resource investment ( see 'M&A Ahead, But No Return To Boom Times', May 09).

Additionally, miners will be forced to pursue alternative forms of financing to sustain operations given the pullback in risk capital from both the debt and equity markets. Private equity (PE), sovereign wealth funds (SWFs), royalty and streaming deals will provide this alternative and encourage more M&A deals in the coming quarters.

M&A To Pick Up
Global - Mining M&A (Volume & Deal Count)

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