Apologies to the PwC partners who came up on the Coopers Brothers side but you knew what you were getting into with the second billing. Just ask Mssrs. Pierce, Fenner, Smith or particularly Mr. Beane.
Despite China's thirst for metals, the nation's mining companies have yet to emerge as mega-deal makers in the ranks of their western counterparts in Australia and Canada.
In its latest report, You Can't Always Get What You Want-Global mining deals 2010, PwC predicts more takeover activity of junior rare earths projects, uranium projects and complementary extractive industries such as shale.
PwC also forecasts an increase in Indian-led deals seeking to secure iron ore and coal supplies, usually through private placements with offtake or royalty agreements.
The report, which was made public Thursday, also revealed that China's role in global mining M&A has been over-stated, noting "few Chinese buyers have successfully secured controlling stakes in world leading mining companies."
Last year, PwC tracked 2,693 global mining deals worth US$113 billion, bringing the decade total to more than 11,000 transactions and a value close to US$785 billion. "No other sector has seen comparable volumes or growth rates," PwC observed.
2011 M&A OUTLOOK
PwC suggests there will be a heightened pace of deal activity in five key resources: gold, coal, fertilizers, copper and iron ore. Fertilizer replaced silver in PwC's key resource categories.
"Consider that, of the record $27 billion deals already announced in the first month and a half of 2011, 81% involved one of these five commodities," noted PwC's global mining leadership team.
In addition to the top five, PwC also anticipates acquirers to seek out junior rare earth projects in the wake of concerns about Chinese market concentration and export restrictions, as well as uranium projects as Asia and other regions "set out ambitious plans for nuclear build outs."...MORE