Could private equity fill the mining M&A vacuum? – by Clara Denina (Reuters U.S. – December 8, 2015)

LONDON – Expectations of a takeover frenzy in global mining have been dashed by falling commodity prices, leaving the field open for private equity funds looking to deploy billions of dollars.

Consolidation in previous times has been driven by major mining companies seeking extra capacity due to strong demand and rising prices.

The delay in their acquisition plans, of possibly two to three years, leaves a vacuum that some in the private equity business see as an opportunity.

Data provider Preqin estimates private equity funds have access to $4.4 billion of capital for mining investments. Some of those funds say conditions are now ripe for them to move.

“This is a prime time in the market for us,” Denham Capital director Caroline Donally said. Denham has around $1 billion invested or committed in mining.

With commodity prices still falling, investors in large firms are nursing their wounds.

BHP Billiton shares are down more than 60 percent since July last year at seven-year lows, Rio Tinto’s stock has tumbled more than 40 percent and Anglo American has plunged 70 percent this year.

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