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Total metals & mining industry M&A deals in Q2 2020 worth $1.83bn were announced in the US, according to GlobalData’s deals database.

The value marked an increase of 65.5% over the previous quarter and a rise of 11.9% when compared with the last four-quarter average of $1.64bn.

2017 04 20 114457The US held a 20.7% share of the global metals & mining industry M&A deal value that totalled $8.86bn in Q2 2020.

In terms of deal activity, the US recorded 42 deals during Q2 2020, marking a rise of 35.5% over the previous quarter and a rise of 20% over the last four-quarter average.

The US metals & mining industry M&A deals in Q2 2020: Top deals

The top five metals & mining industry M&A deals accounted for 99.4% of the overall value during Q2 2020.

The combined value of the top five metals & mining M&A deals stood at $1.82bn, against the overall value of $1.83bn recorded for the month.

The top five metals & mining industry deals of Q2 2020 tracked by GlobalData were:

  • ‘s $1.78bn merger of Alacer Gold and SSR Mining
  • The $23.78m merger of Evrim Resources and Renaissance Gold by
  • Metalla Royalty and Streaming’s $5.77m asset transaction with
  • The $4m acquisition of Idaho North Resources by Metalla Royalty and Streaming
  • Greenpro Capital’s acquisition of Millennium Sapphire for $4m.

This analysis considers only announced and completed deals from the GlobalData financial deals database and exclude all terminated and rumored deals. Country and industry are defined according to the headquarters and dominant industry of the target firm. The term ‘acquisition’ refers to both completed deals and those in the bidding stage. 

GlobalData tracks real-time data concerning all merger and acquisition, private equity/venture capital and asset transaction activity around the world from thousands of company websites and other reliable sources. 

About GlobalData 

4,000 of the world’s largest companies, including over 70% of FTSE 100 and 60% of Fortune 100 companies, make more timely and better business decisions thanks to GlobalData’s unique data, expert analysis, and innovative solutions, all in one platform. GlobalData’s mission is to help our clients decode the future to be more successful and innovative across a range of industries, including the healthcare, consumer, retail, technology, energy, financial and professional services sectors.

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Iron ore exports from India are expected to decline by around 25% to 23.3 Mt in 2020 due to the coronavirus (Covid-19) outbreak and the subsequent closure of ports, shortage of workers and transport restrictions, which are severely disrupting the exports as well as the domestic supply, says GlobalData, a leading data and analytics company. 

In addition, the auctioning process of several iron ore mines were completed in February 2020 as their leases were about to expire in March 2020. Out of around 25 non-captive iron ore mines, 22 were successfully auctioned while three were put on hold over a pending legal suit from the Supreme Court of India. 

Vinneth Bajaj, Senior Mining Analyst at GlobalData, says: “The delays in the auctioning of mines in Odisha, which were to be held in March last year, due to the lack of clarity on the maximum lease area, will severely damage India’s iron ore output in 2020, which is expected to fall to 205.7 Mt, a 12.5% decline compared with 2019 (234.9 Mt). The decline could have been over 40 Mt, had the Indian government not allowed new owners to start and continue operations until they had acquired fresh forest and environmental clearances, which could have taken up to three years.”  

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In addition, some idle time is inevitable as operations are reestablished by the new owners. With that in place, GlobalData expects the production to pick up once the lockdown ends, and operating activities resume. 

Despite the decline in 2020, the production of iron ore in India is expected to grow over the forecast period (2020–2024) at a compound annual growth rate (CAGR) of 7.2% to reach 271.2 Mt in 2024. The resumption of operations at the auctioned mines will be a key factor behind this growth. 

Bajaj concludes: “Simultaneously, iron ore exports from India are expected to recover from the 2020 decline and post a forecast-period CAGR of 4.2% to reach 27.5 Mt in 2024, supported by improving demand from China.” 

  • Comments provided by Vinneth Bajaj, Senior Mining Analyst at GlobalData
  • This press release is written using data and information sourced from proprietary databases, primary and secondary research, and in-house analysis conducted by GlobalData’s team of industry experts

About GlobalData

4,000 of the world’s largest companies, including over 70% of FTSE 100 and 60% of Fortune 100 companies, make more timely and better business decisions thanks to GlobalData’s unique data, expert analysis and innovative solutions, all in one platform. GlobalData’s mission is to help our clients decode the future to be more successful and innovative across a range of industries, including the healthcare, consumer, retail, financial, technology and professional services sectors.

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China’s iron ore production is forecast to decline by 3% to 78.2 Mt in 2020 due to the impact of Covid-19. Between January and February, the operating rates at private iron ore mines declined from 34.9% to 29.6% and overall, China’s iron ore production declined by 4.6% year-on-year, says GlobalData, a leading data and analytics company. 

Several mines and plants had to temporarily cease the production activities. The deliveries and shipments were either delayed or rescheduled, and there was a shortage of workers, who could not return to mine sites owing to the prolonged Lunar new year holidays, followed by the transportation issues due to lockdown. 

Vinneth Bajaj, Senior Mining Analyst at GlobalData, says: “As a result of the slowdown in the domestic production, iron ore imports grew by 1.5% year-on-year in January and February 2020 to reach 176.8 Mt. However, purchases accumulated at ports due to transportation challenges, owing to the lockdown and inventory at ports had reached a three-month high of 131.1 Mt by 7 February 2020.” 

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GlobalData forecasts the iron ore production in China to grow at a compound annual growth rate (CAGR) of 1.1% between 2020 and 2024 to reach 81.6 Mt.  

Bajaj concludes: “The growth will be relatively flat due to the elimination of inefficient steel capacity, as part of the three-year ‘Blue Sky’ environmental initiative, which runs from 2018 to 2020. This initiative is driving domestic steelmakers to utilise high-grade iron ore (Fe 58-62%), which principally originates from Australia and Brazil.

  • Quotes provided by Vinneth Bajaj, Senior Mining Analyst at GlobalData
  • This press release is written using data and information sourced from proprietary databases, primary and secondary research, and in-house analysis conducted by GlobalData’s team of industry experts

About GlobalData

4,000 of the world’s largest companies, including over 70% of FTSE 100 and 60% of Fortune 100 companies, make more timely and better business decisions thanks to GlobalData’s unique data, expert analysis and innovative solutions, all in one platform. GlobalData’s mission is to help our clients decode the future to be more successful and innovative across a range of industries, including the healthcare, consumer, retail, financial, technology and professional services sectors.

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Global copper production in 2020 is expected to be impacted by the coronavirus (COVID-19) outbreak. After declining by 1.9% in 2019 to 20.6 million tonnes (Mt) due to lower ore grades and production disruptions, copper production was initially expected to grow by 3.4% in 2020 due to an anticipated increase in production from Chile, China and Peru. However, with falling demand and ongoing disruption to mining activities due to lockdowns, this has been reduced to just 1.9% - with production of 21Mt in 2020. The ongoing disruptions will be offset by production from the Cobre Panama and Grasberg mines, says GlobalData, a leading data and analytics company.

Vinneth Bajaj, Senior Mining Analyst at GlobalData, says: “Production growth in China is forecast to be around 6%, which is down from the 9.6% forecasted before the outbreak. Lockdowns in Chile and Peru will reduce the output in two markets that currently account for 40% of the global supply. Production in Chile is forecast to grow by 0.3% and in Peru by 2% - compared with a 1.4% decline and 2.6% growth respectively in 2019. There is also expected to be a slowdown in development of new projects.”

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Around 40-45% of the global copper demand is from the construction sector and this is expected to be heavily impacted by the COVID-19 outbreak.

Bajaj adds: “GlobalData’s latest expectations are for global construction output to grow by just 0.5% in 2020, from an original forecast of 3.1%. The direct impact on construction has been the halting of work - with labor unable to get to the construction sites - and disruption to supply chains with delays in the delivery of key materials and equipment, due to quarantines and travel restrictions. Widespread postponement and cancellations of projects is also expected.”

Overall expectations are for copper demand growth of 2.7% versus the 4.1% predicted before the outbreak. The lower growth rates are linked heavily to lower construction activity in China from mid-January 2020, although the situation is gradually improving with restrictions and lockdowns being eased. However, there continues to be reduced activity globally as more countries move to limit non-essential business operations.

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Vinneth adds: “The current forecast assumes that the outbreak is contained across all major markets by the end of the second quarter - following which conditions would allow for a return to normalcy in terms of economic activity and freedom of movement in the second half of the year. However, there will be a lingering and potentially heavy impact on private investment due to the financial toll that is being inflicted upon businesses and investors across a wide range of sectors.”

After the prolonged US-China trade war, which undermined copper market sentiment in 2019, with prices down by 8% over 2018, copper price improved during the fourth quarter of 2019, reaching US$5,893.2 per ton owing to the optimism regarding the US-China trade. However, prices initially fell steeply on the news of the spread of the virus between the middle of January and early February 2020 and, despite demonstrating resilience by reaching US$5,694 per ton on 4 March, with the outbreak of COVID-19 progressing globally, copper prices fell to US$4,775 per ton on 26 March. With weak industrial and construction activity and shrinking demand, the copper price is expected to remain low, averaging between US$4,900 per ton to US$4,700 per ton for the coming three months.

  • Comments provided by Vinneth Bajaj, Senior Mining Analyst at GlobalData
  • This press release is based on GlobalData’s Global Copper Mining to 2023 – Impact of Coronavirus
  • This press release is written using data and information sourced from proprietary databases, primary and secondary research, and in-house analysis conducted by GlobalData’s team of industry experts

About GlobalData

4,000 of the world’s largest companies, including over 70% of FTSE 100 and 60% of Fortune 100 companies, make more timely and better business decisions thanks to GlobalData’s unique data, expert analysis and innovative solutions, all in one platform. GlobalData’s mission is to help our clients decode the future to be more successful and innovative across a range of industries, including the healthcare, consumer, retail, financial, technology and professional services sectors.

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