The dream of seeing Inco, Falconbridge and other mining powerhouses return to Canada is alive and well. A decade after the country’s big mining companies were taken over by foreigners, Canadian bankers see an opportunity to reclaim lost ground.
More than 50 mines are on the auction block, as indebted miners Vale SA, Glencore PLC, Anglo American PLC and Freeport-McMoRan Inc. race to fix their balance sheets.
“We have an opportunity here because of the debt burden of these companies. The big companies will be much smaller,” said Egizio Bianchini, co-head of mining and metals at Bank of Montreal. “They have all announced major asset sales. Some of these companies are going to migrate to Toronto,” he said.
The restructuring among the large global mining companies was already under way amid the gruelling slump in metal and mineral prices. BHP Billiton hived off its uglier assets into a separate company called South32, based in Australia. Freeport-McMoRan, one of the world’s biggest copper producers, sold one of its copper mines to raise funds. Anglo American sold some mines and non-core businesses.
But as commodities continued to plunge, cash-strapped miners put more and more assets on the market. Vale, the world’s biggest iron ore producer that bought nickel giant Inco, said it has no restrictions on what it would sell to reduce debt.
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