Mining deals: No stone unturned - 2010 mid-year update

The overarching theme for M&A in the mining sector in 2010 is that “no stone is being left unturned” to uncover deal opportunities. In addition to an overall increase in deal volumes, forays into new geographies, diversification of resource bases and an overall return to risk have characterized activity year-to-date 2010.

Key Observations:
 

  • The global mining deal frenzy continues – peak to peak
  • The Asian buying spree intensifies – what’s yours can be mine
  • Opportunities for “mega deals” become scarce, the middle market gains favour – breaking new ground
  • Buyers scour new regions – the road less travelled
  • Buyers broaden resources bases - whatever lies beneath

Going forward, for the remainder of 2010, PwC expects four deal trends to dominate the global mining sector:
 

1. Intensification of a “global arms race”
2. Private funds to reconsider the mining sector
3. Mining tax to prompt a mild resurgence in Australian deals
4. Currency risk to impact deal structure