Oginvest schrieb 11.10.23, 18:09
Exclusive: Miners seek partners for copper assets as M&A heats up
LONDON, Oct 11 (Reuters) - A flurry of copper mining deals are being lined up for the next six to 12 months, industry sources said, as producers seek to spread the soaring cost of new projects for the metal key to the energy transition.
The capital needed to develop new mines has shot up some 50% to between $3 billion-$4 billion on average in recent years, fuelled by declining ore grades, stricter environmental requirements and rising labour costs.
Copper producers increasingly want to share the risk and costs of projects, and the sector has already seen a jump in M&A activity, which more than doubled year-on-year to $14.24 billion in 2022.
But big-ticket M&A is not the only solution to rising costs, and partnership deals are also being mooted, five sources familiar with the matter said.
For investors interested in the green transition, that would allow them to own a portion of existing assets and revenues at a time when large reserves of top-grade material are hard to find.
Miner and trader Glencore (GLEN.L) has been approached by potential investors in its Argentine copper projects Minera Agua Rica Alumbrera (Mara) and El Pachon, two sources said.
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Canada's Lundin Mining (LUN.TO) is also in talks with Japanese trading houses and large miners to offer a 40% to 50% stake in Argentina's Josemaria mine, incoming CEO Jack Lundin told Reuters this month.
Interested parties include the world's largest listed mining company BHP Group (BHP.AX) and Sumitomo, one source said. BHP also declined to comment.
"I think the world understands that demand is increasing for copper. I don't think they understand the difficulty in the challenges of maintaining supply, or bringing new supply on," Lundin said.
"This is where we really have to dig deep, and look at bringing down costs."
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Most analysts expect the copper market to be in deficit from 2027 due to increased demand for electric vehicles and renewable infrastructure.
But that could take years to feed through into fatter margins for producers, said Farid Dadashev, head of EMEA metals & mining at RBC Capital Markets.
"One way to reduce project development risks and multi-billion dollar investments is through forming a joint venture with strategic or trading partners," he said. He declined to give details on the current deals pipeline.
https://www.reuters.com/markets/deals/miners-seek-partners-copper-assets-ma-heats-up-2023-10-11/
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