Merger and acquisition activity in the global mining sector has rebounded from the recession with a vengeance and Canadian miners are leading the way.
According to a PricewaterhouseCoopers (PwC) report released Wednesday, 1,324 mining deals worth an aggregate US$104 billion have been announced this year, and PwC expects deal making to speed up for the remainder of the year.
It believes deals in 2010 could outpace the 2007 peak of 1,732 deals valued at US$159 billion.
On top of that, the report said North American-headquartered companies are the most active, most of which are based in Canada.
PwC said 49% of the world’s mining deals in the first half of 2010 involved at least one Canadian or American buyer.
“No other global sector has seen such a consistently high volume of deal making,” said John Nyholt, PwC’s national leader of transaction services. “Expansion into new geographies, diversification of resource bases and an overall return to risk have characterized M&A activity in the global mining sector in the first half of 2010.”
That’s good news for Vancouver’s mining community, which is considered a global mining hub and is home to approximately 800 resource companies.
Shareholders of Red Back Mining Inc. (TSX:RBI) approved a deal Wednesday that sees Toronto-based Kinross Gold Corp. (TSX:K) swallow the Vancouver company for $7.1 billion (See “Kinross spending US$7.1 billion for Vancouver gold miner ” BIV Daily, August 4).
Earlier this month, Vancouver’s mining community announced another mega-deal that would see Goldcorp Inc. (TSX:G) buy Andean Resources Ltd. (TSX:AND) for $3.6 billion (See “Goldcorp snaps up Andean in $3.6 billion deal ” – BIV Daily, September 3).