Fitch: Mining M&A Buzz Will Continue Into Next Year

According to the Mining.com website, Fitch Ratings predicts in its latest report that the recent trend of mining company mergers and acquisitions driven by the global green energy transition will continue until 2024.

The New York-based company said that as mining product prices remain above medium-term levels in the short and medium term, mining companies have flexibility in financing. "Mineral products prices have fallen sharply this year," this will bring financing liquidity to mergers and acquisitions.

As a result, transaction activity this year will hit its highest level in 10 years, with ultra-high profits in 2021-2022 increasing mining financing liquidity.

"Changes in the demand structure brought about by the energy transition, longer greenfield project construction cycles, and limited organic growth will support an increase in M&A activity after 2023," Fitch said.

"Mining companies are particularly concerned about future metals, such as lithium, nickel and copper. There will be shortages in the market after 2026."

Moreover, lower prices will also spur further M&A activity in the coming years, Fitch added. "The decline in market capitalization provides opportunities for strategic consolidation, especially in the gold industry."