According to EY’s Capital Confidence Barometer, 114 mining and metals deals were completed in Australia for the nine months to September 30, down 22% on the same time last year, with a value of $US4 billion ($A4.7 billion), up 10%.
That includes 36 deals in the September quarter with a value of $1.4 billion, a more than three-fold increase over the same time last year.
Globally, there were 119 deals in the September quarter, down 17% on the June quarter, but deal value soared by 51% to $16.2 billion.
Global deals for the first nine months of the year were 414, down from 566, with a value of $34.1 billion, down from $65.4 billion.
Australia is expected to finish the year as the second-top market for global mining deals.
Only Canada posted a higher volume of deals for the first three quarters, with 167 transactions worth a total value of $7.7 billion.
Canada and Australia were also the most targeted countries for deals, registering 112 and 85 transactions respectively.
EY Oceania Mining & Metals transactions leader Paul Murphy said gold consolidation had been a driver of transaction activity in Australia, accounting for 30 of the 85 Australian-target deals.
“We expect consolidation in gold, and also coal, to continue into 2015 but we also expect to see more strategic buying returning to the market,” Murphy said.
Coal accounted for 14% of Australian deals, while on a global scale almost half the value of deals in the September quarter was in copper.
“Outside the gold and coal sectors, there has been little urgency to complete deals quickly but we are seeing signs of momentum slowly building,” Murphy said.
“Continued weakness of the iron ore price will increase pressure for restructuring, rationalisation and refinancing which will act as a catalyst for M&A activity in the mid-tier and higher cost end of the industry.”
Of 83 global mining executives surveyed, 46% expect to pursue an acquisition in the next 12 months, nearly double the April figure and the highest level in two years.
“We haven’t seen deal intentions and confidence this high in some years and this suggests a much more robust transactions market in 2015,” Murphy said.
The number of mining companies confident of closing deals has jumped to 60% from 26% six months ago, while 60% had confidence in the quality of opportunities, up from 34% and 67% in the number of opportunities, up from 42%.
And companies’ confidence in earnings soared to 90% from 34% a year ago, while the faith in market stability jumped to 78% from 14%.
The proceeds of global initial public offerings ($1.3 billion from 12 IPOs) for the nine months of September were double 2013’s figures.
