PricewaterhouseCoopers' (PwC) latest report shows that the level of mergers and acquisitions (M&A) in the mining sector has reached "unprecedented levels".

According to the firm, the trend can be accounted for by the optimistic outlook for the industry in terms of growth and profitability, while high commodity prices are also a factor.

Indeed, the report noted that even the credit crunch would fail to slow deal activity down.

"The number of mining deals announced in the fourth quarter of 2007 was more than double the level recorded in the corresponding quarter of 2006 and the latest heavyweight moves by the biggest players has got 2008 mining deal-making off to an unprecedented start," the report said.

Tim Goldsmith, global mining leader, PricewaterhouseCoopers, went on to liken the current situation to an "eat or be eaten environment".

"Everybody needs to be both on the front foot as well as looking over their shoulders," he explained.

"The very biggest companies are positioning themselves to achieve super-consolidated global scale. They face considerable competition from fast-growing companies emerging from India, Russia and China. The industry landscape is set to change dramatically."

The report revealed that most of the money going into Africa was destined for South Africa, while Chinese and Russian companies are focussing their attentions on making acquisitions in North America and Australia.

Source:

Eat or be eaten in the mining sector as M&A activity reaches new records, 18/03/08

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