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Mining deal value dips in 2018: report

China, Canada, Australia, the US and Indonesia were in 2018 the five largest jurisdictions globally in terms of mining deal value, accounting for 65.2% or US$74.5 billion of the global total, new analysis from data and analytics company GlobalData.
Mining deal value dips in 2018: report Mining deal value dips in 2018: report Mining deal value dips in 2018: report Mining deal value dips in 2018: report Mining deal value dips in 2018: report

Staff Reporter

However, that figure belies the fact that the total value of all financial deals in the mining sector fell by 14.9% in 2018 to US$114 billion. This was mainly the result of a 32.4% decline in global mining capital raising expenditures, which were partially offset by a 13.5% increase in the value of mergers and acquisitions.

GlobalData noted the largest of the completed deals in 2018 was China's Tianqi Lithium Corp's acquisition of a 23.77% share in Chilean lithium miner SQM, from Canadian fertiliser giant Nutrien, for $4.1 billion.

This deal was followed by the Indonesian state-owned mining company PT Indonesia Asahan Aluminium's offering of bonds, which raised $4 billion.

"Out of 3,000 deals in 2018, the five largest were all worth over $2 billion and accounted for a combined 15.8% of the global deal value, whilst there were a further 60 deals ranging between $500 million to $2 billion, accounting for a combined 44.1% of the total value," mining analyst Vinneth Bajaj said.

After increasing for two consecutive years, mining M&A and capital raising deal volumes declined by 11.7% year-on-year in 2018, with the overall deal value off by 14.9%. Major drivers behind the global downturn was a significant fall in capital raised through equity and debt offerings, alongside relatively lower acquisition rates, GlobalData said.

Despite the lower volumes, the total value of M&A deals increased and, despite small in comparison, both private equity and venture financing deal values and volumes rose in 2018. Overall, M&A accounted for 50.9% of the global deal value, while capital raising activities accounted for the balance of 49.1%.