After a flat first quarter, the total value of mining deals – including mergers and acquisitions (M&A), capital raising and asset transactions – declined by $5.3-billion to $20.6-billion in the second quarter, reports data and analytics company GlobalData.
“Mining M&A values dropped by 30.5%, or $2.9-billion, in the second quarter, while there was a 24.8%, or $3.7-billion, drop in the capital raised by mining companies during the second quarter.
"The number of asset transactions, however, rose by 84.9%, with a $1.3-billion increase in value,” says GlobalData senior mining analyst Vinneth Bajaj.
The total volume of deals increased from 860 in the first quarter to 1 411 in the second, owing to an 84.9% increase in the total number of completed asset transaction deals in that quarter.
This was accompanied by a 53.4% increase in the volume of completed capital raising deals.
Canada, Australia, the US and the UK accounted for more than 90% of the total deal volume and more than 50% of the total deal value.
The largest of the completed deals was PT Indonesia Asahan Aluminium’s raising of $2.5-billion by offering three sets of bonds at 4.75% (due in 2025), 5.45% (due in 2030) and 5.8% (due in 2050). Of the total, 60% will be used to pay debts and to acquire 20% of PT Vale Indonesia, while the remaining 40% will be used to refinance the company’s older bonds.
Further, Codelco raised $800-million in an offering of bonds due 2031 to refinance debt and enhance the company’s good liquidity position and improve its amortisation profile over the medium term.
Moreover, Newcrest raised a collective $788-million, out of which $653-million was used to fund the purchase of Fruta del Norte financing facilities in Ecuador and the remainder to fund developments at its Red Chris operations, in Canada, and the Haverion project, in Western Australia.
“Eight of the top ten asset transactions deals involved gold. Topping the list was Mudrick Capital Acquisition Corporation, which acquired an equity interest and assets from Hycroft Mining Corporation for a consideration of $537-million to form Hycroft Mining Holding Corporation,” says Bajaj.