After increasing for two consecutive years, mining M&A and capital raising deal volumes both declined by 11.7% in 2018, compared with 2017, while overall deal values fell by 14.9%, according to research by GlobalData’s Mining Intelligence Center.

Mining industry outlook 2018

Major drivers behind the global downturn was a significant fall in capital raised through equity and debt offerings alongside relatively lower acquisition rates.

Despite the fall in volumes, the total value of mergers and acquisitions (M&A) deals did increase and, although small in comparison, both private equity and venture financing deal values and volumes rose in 2018.

However, these could not mitigate the overall decrease in the global value in the year. Overall, M&A accounted for 50.9% of the global deal value, while capital raising activities accounted for the remaining 49.1%.

There were five deals, each worth over $2billion, accounting for a combined 15.8% of the global deal value. Similarly, there were 60 deals ranging between $500million and $2billion, accounting for a combined 44.1% of the total value. The remaining 40.1% originated from deals that were less than $500million.

China, Indonesia, Canada, the US and Australia

Largest of the completed deals in 2018 was China’s Tianqi Lithium Corp, which acquired 23.77% share in Chilean lithium miner SQM from Canadian fertilizer giant Nutrien, for a consideration of $4.1billion.

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By GlobalData

This was followed by the Indonesian state-owned mining company, PT Indonesia Asahan Aluminium, offering bonds that raised $4billion.

China, Canada, Australia, the US and Indonesia were the five largest countries globally in terms of deal value, accounting for 65.2% or $74.5billion of the global total. Of this, 18.8% was accounted by deals worth over $2billion, 37.2% by deals between $500million and $2billion and 44% was accounted for by deals below $500million.

Number and value of mining deals, 2015–2018

Source: GlobalData, Mining Intelligence Center