Today The Australian reports:
Private equity set to pounce on mine assets
PRIVATE equity firms are gearing up for a multi-billion-dollar push into the mining sector, with a wave of proposed asset sales by the big miners, a shortage of competing buyers and the funding headaches faced by smaller companies paving the way for a rise in deals.See also:
A number of investment bankers told The Weekend Australian that several major international private equity firms and numerous smaller boutique funds were increasingly active behind the scenes in Australia's resources sector.
Groups such as the New York-based Resource Capital Funds, Boston-based Denham Capital and Sydney's Pacific Road Capital Management are all said to be working towards deals in the mining industry. RCF is in the process of raising another $US2 billion ($1.94bn) in funding, Pacific Road late last year raised $476 million, and Denham opened a Perth office in February.
Leadership changes at the world's biggest miners, including BHP Billiton, Rio Tinto and Anglo American, are expected to herald numerous assets being up for sale as the new chief executives review their portfolios.
New Rio chief Sam Walsh has already reportedly started sales processes for assets such as the Northparkes copper mine in NSW and its Clermont and Blair Athol coal projects in Queensland, and more are likely to follow.
BNP Paribas's Perth-based head of metals and mining investment banking, Olivier Smeets, said that the recent fall in valuations of mining assets was playing into the hands of private equity firms prepared to take a longer-term view on the outlook for commodities....MUCH MORE
BHP Billiton Puts Mystery Assets on the Auction Block (BHP)
As I said in "Copper: Massive Landslide, Force Majeure at One of the World's Largest Mines Does Nothing for Price":
...It's not just today, copper actually peaked the day before the slide. This is a seriously over-supplied market.
Here's a 30 day chart...
Image via Deseret News
