- Australia is a critical minerals hotspot with 24% of world?s nickel resources; 56% global lithium production.
- PwC report reveals 35% of global mining CEOs plan pursuing M&A in near-term.
- A$4 billion August merger of ASX-listed companies creates the 5th largest lithium chemicals company.
The critical metals market in Australia is poised to play a leading role in expected upcoming global M&A activity, as more than one-third of mining CEOs indicate they plan to pursue new deals leading into 2022.
The PwC 24th Annual Global CEO Survey (2021) reported that 35% of mining CEOs plan to pursue new M&A opportunities in the near-term. PwC forecasts an increase in deal activity across critical minerals, being driven by the green energy transition as demand for those commodities continues to grow.
With Australia hosting 24% of the world?s nickel resources, 19% of its economic cobalt resources, and accounting for 7% of global nickel production, the minerals-rich nation is an attractive destination for M&A, both domestically and globally.
In August, the country played host to a massive A$4 billion merger between ASX-listed lithium producers Galaxy Resources (ASX:GXY) and Orocobre (ASX:ORE), creating the fifth-largest lithium chemicals company in the world.
Globally, also this year it was announced that Vancouver, Canada-based giant First Quantum Minerals (TSX:FM) was selling a 30% equity interest in the Ravensthorpe Nickel Operation in Western Australia for US$240m to POSCO (KRX:005490), the South Korean steel producer.
Austrade forecasts higher global demand for critical minerals and processing technologies in the coming decade, which means more mines will need to come into production, which could fuel larger players to acquire companies or assets.
Critical minerals have diverse applications spread across many sectors, including metallurgy and chemical industries, to energy storage systems (ESS) for renewable energy, electric vehicles (EVs), power generation, high-end electronics, aerospace, defence, and data transmission hardware.