Mining Sector’s M&A Trends Pointing to Ten-Year Peak, Forecasts Fitch Ratings

A continued upswing in global mining mergers and acquisitions (M&A) is anticipated to stretch into 2024 and potentially further, propelled by the worldwide transition to green energy, states a fresh report by Fitch Ratings.

Fitch Ratings, based in New York, maintains that miners’ financial outlooks are slated to stay robust in the imminent short to medium timeframe, buoyed by sustained high commodity prices. Despite the substantial pricing normalization witnessed throughout the current year, the firm foresees a fertile ground for M&A endeavors, facilitated by the financial wiggle room it engenders.

Tracking a trajectory to clinch a ten-year zenith in 2023, M&A undertakings are reaping the benefits of a financial leeway widened by the remarkable profit margins recorded in the 2021-2022 period.

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Fitch delineates a series of factors fueling this trend beyond 2023, including alterations in demand dynamics steered by energy shifts, prolonged timelines for initiating greenfield projects, and a scarcity of intrinsic growth avenues. “The focus will principally be on metals pivotal for the future like lithium, nickel, and copper, the demands for which are expected to supersede supply post-2026,” the report states.

Furthermore, Fitch anticipates a spur in acquisitional activities down the line, driven by potential dips in market valuations, unveiling prime opportunities for strategic amalgamations, predominantly in the yet unconsolidated gold sector.

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