January 3, 2024

New factors driving M&A in mining

M&A in the mining space is seeing a broader participant group, thanks in part to the energy transition, according to co-head of Torys’ M&A practice Mike Amm.

Speaking with the Mining Journal, Mike said that positioning for the energy transition theme has broadened the universe of companies participating in M&A activity in the mining space.

“The M&A participant is a broader group than before,” Mike said.

“There are still sector players getting together like Livent and Allkem in the lithium space. The major miners are bulking up in future-facing commodities, getting out of coal and energy and into copper, nickel, cobalt and lithium.

“New entrants of the automotive and battery OEMs such as GM looking at partnering in big projects such as Lithium Americas' Thacker Pass, and Stellantis investing into McEwen Copper.”

Read: Q4 2023 Torys Quarterly: Infrastructure and energy report

Mike also said boardroom discussion at present includes themes like foreign investment review, adding that some western jurisdictions began tightening its focus on this some years ago.

“Does the deal make sense is one consideration, but also, can a deal be done? This will drive which M&A deals get done, by whom and where,” he said.

“[Western jurisdictions] began tightening this in 2015, particularly regarding Asian state-owned enterprises, who increasingly are not permitted to do significant acquisitions except in exceptional circumstances. This is a growing issue. It is not just what the acquirer can pay but who you are.”

You can learn more about our Mining and Metals and M&A work on the relevant practice pages.

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Richard Coombs | Senior Manager, Marketing

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