As the world’s biggest base metal miners embark on a fire sale of their mines, Canadian banks are poised for a piece of the action. The groundwork has been laid for a busy year for mining deals after one of the slowest periods in more than a decade.
Desperation is high among indebted industrial metal producers, whose businesses have been felled by low commodity prices and weak demand from the world’s largest metal consumer, China.
Vale SA, Freeport-McMoRan Inc., Glencore PLC and Anglo American PLC are all planning to divest dozens of mines in a mad dash to raise cash, providing a smorgasbord of assets for potential buyers.
“Canada is a big part of that buyer list,” said Peter Collibee, head of global mining and metals at Bank of Nova Scotia.
Vale, the Brazilian iron-ore giant, is swimming in $25-billion (U.S.) of debt and aims to reduce it by $10-billion. Freeport, a U.S.based copper and oil producer, plans to halve its $20-billion debt load. London-based Anglo American is trying to sell 29 mines to bolster its financial position.
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