JOHHANNESBURG (miningweekly.com) – Nearly two-thirds, or 63%, of mining and metals respondents to the latest EY Capital Confidence Barometer (CCB) say they intend to pursue deals in the next 12 months, demonstrating a higher inclination to transact than the average across all industries (56%).
The findings support the EY third quarter mergers and acquisitions (M&A) and capital raising insights, which point to a notable shift in activity this year – with deals no longer driven largely by restructuring or divestments, but more focused on growth opportunities, synergistic deals and consolidation.
“We’ve seen reticence in recent years to invest in acquisitive growth due to volatile market conditions and a preference for delivering immediate returns. But with imminently dry pipelines, transactions are back on the agenda,” EY global mining and metals leader Lee Downham noted.
Fifty-three per cent of the 111 mining and metals companies responding to the CCB agree that M&A would continue to increase in the next 12 months, as businesses increasingly look to the role M&A has to play in their strategy to drive long-term value for shareholders.
Meanwhile, law firm Norton Rose Fulbright global head of infrastructure, mining and commodities Nick Merritt noted that business in the year ahead would focus on sustainability, digital connectivity and the convergence of energy, transport, infrastructure and technology systems.
“Increasing urbanisation and growing populations will demand investment in urban infrastructure and all that goes in and out of the city. Digital technology, automation and artificial intelligence will influence mining and agribusiness strategies,” he said.
Merritt further highlighted that sustainability principles, combined with sound business reasons would foster greater interest in the use of renewable energy in mining and agri.