Deals in the global mining and metals industry continued their slide to a seven-year low in transaction volumes in 2013, EY announced February 26.
Total transactions fell by a third in 2013 to 941, down from 1,008 in 2012.
"Deal volume in the Canadian mining and metals sector fell 33% year-over-year despite a variety of market forces setting the stage for transaction opportunities," said Bruce Sprague, Canadian mining and metals leader at EY.
The total dollar value of all deals was $87 billion – down 16% from $104 billion in 2012. This excludes a $38 billion merger between Glencore International and Xstrata.
Acquisitions were held back by the same price volatility and instability in the global economy seen in 2012. Transactions that did occur were low-risk, smaller deals relating to increasing existing holdings and securing future supply.
But the outlook is not necessarily as bleak, according to PwC in its Global Mining Deals Report, also released February 26.
The report said that mining activity is expected to grow in the coming months, due in part to stabilizing economies.
"Overall, the mining sector has experienced short-term pain for what could be longer-term gain," said John Gravelle, global mining leader and Canadian mining leader at PwC, explaining that mining companies are going to focus on core assets and commodities.
"To once again create shareholder value and extend mine life, miners will need to continue to acquire assets."
In particular, said the PwC report, junior mining companies are expected to be involved in more transactions in 2014.
