Factbox: Assets on the block in the mining sector
Big mining companies, restored to health following the 2015-16 price crash, are seeking to rationalise their portfolios and acquire assets in line with heightened focus on the best quality minerals and anticipated demand for battery materials.
Still, the mood remains cautious and the focus has been on smaller deals after the damage inflicted by steep commodity price falls and as uncertainty surrounds any shift to electric vehicles.
Automakers are striving for the cheapest solutions as technology evolves, making major miners reluctant to change too hastily from bulk commodities, such as iron ore, with clear business models to minerals, such as lithium, used in batteries, whose pricing can be unclear.
Below is a list of deals and possible deals.CHINA
China, the world`s biggest commodity market, is the most obvious buyer and its needs are changing.
An anti-pollution drive means it wants higher-quality iron ore and aggressive targets on electric vehicles are likely to increase its consumption of minerals including copper, rare earths, aluminium and cobalt.
Industry sources say China Molybdenum, for instance, is on the hunt for acquisitions.
China`s recovering economic fundamentals could be limiting the need for capital controls and the value of Chinese overseas mergers and acquisitions jumped late last year.
In January, however, Russia`s largest gold miner Polyus said plans to sell a 10 percent stake to a consortium led by China`s Fosun International had been dropped after one of the conditions of the agreement was not met. GLENCORE
Glencore CEO Ivan Glasenberg is regarded as a compulsive dealmaker, but even Glencore has said it is focusing on brownfield acquisitions, incremental stakes and portfolio rationalisation rather than blockbuster M&A.
In March last year, the company increased its control over the zinc market through a deal with Canada`s Trevali in which it sold shares in two companies and helped to create the first pure zinc company with wide geographical reach.
It followed up in October with an agreement to buy a further stake in Peru`s largest zinc miner Volcan Compañia Minera. Zinc is used to galvanise steel for construction and cars.
Among the major miners, Glencore has the clearest exposure to battery minerals needed for electric vehicles and other new technology.
It also says it wants to expand its agricultural business, raising the possibility of a bidding war for Bunge COAL
Glencore also says coal will remain a significant source of fuel, especially in Asia.
It is, however, keen for only the most profitable assets, while other miners are seeking to exit the sector, in line with the global push towards lower-carbon energy.
Glencore has put its isolated Rolleston thermal coal mine up for sale, but it entered a bidding war for Rio`s coal assets in Hunter Valley and eventually bought a 49 percent stake in the assets Rio agreed to sell to China`s Yancoal..
New Hope Corp is also chasing coal mine acquisitions in Australia, while Wesfarmers is a potential seller.
Rio Tinto has started a sales process for its Queensland coking coal operations Kestrel and Hail Creek, industry sources say. It is also seeking to offload its Pacific Aluminium business, with assets in Australia and New Zealand and has received a $500 million binding offer for its aluminium smelter in northern France.
South32 has decided to run its South Africa Energy Coal business as a standalone unit and is expected to either float it on the Johannesburg Stock Exchange or to sell it.
It has said that for the medium to long term, coal is not a commodity it wishes to own.BHP
BHP, under pressure from activist shareholder Elliott Advisors, said it would exit its underperforming U.S. shale oil and gas business.
Sources said it is also considering selling a 25 percent stake in its Canadian potash mine project.COPPER
Miners are keen to get hold of high-quality copper assets, in demand for new and old technology, but say there is a lack of good opportunities.
BHP is expanding production at its Spence mine in Chile, but has begun a sales process to divest Cerro Colorado copper mine, also in Chile.
One of its smaller operations in South America, it has attracted interest from some of Canada`s miners.ANGLO AMERICAN
Anil Agarwal, the chairman of Vedanta, which analysts say has aspirations to be a much bigger player, is buying up to 20 percent of Anglo American.
Agarwal, however, says he is acquiring the stake through his family trust, not through Vedanta. He denies he is seeking to take over Anglo American.
Anglo American, like other major miners, is looking at buying stakes in small companies that can provide it with exposure to a wider range of assets.
Its De Beers arm is considering investments in startups.
Similarly, Rio Tinto has a Rio Tinto Ventures unit to develop specialist mining projects. SMALL-CAPS AND RISK
Small-cap companies say it is hard to raise funding, especially in the higher-risk countries in Africa where there are signs of resurgent resource nationalism.
A standout among the smaller players is Kazakhstan-focused copper miner Central Asia Metals, which said in September it would buy Bermuda-based Lynx Resources Ltd in a $402.5 million reverse-takeover deal.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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