LONDON (Reuters) – Coal and iron ore dominated mining takeovers in 2017, Thomson Reuters data shows, with buyers favoring the heavily polluting devil they know over the uncertainties of a battery-powered future.
While the biggest deal was in Brazil, China was a top player despite planning to reduce domestic coal and steel-making to tackle smog in its cities. Elsewhere, miners haunted by the overpriced mega-purchases they made before the commodities crash of 2015 hesitated on deals involving the metals needed to run electric cars.
Mining deals totaled $96.8 billion, based on 2,109 mostly modestly-sized transactions in the past year, Thomson Reuters Deals Intelligence showed. That marked a 10 percent increase in value from 2016 but fell far short of $150-$200 billion totals in the boom years, after which miners had to write billions of dollars off the value of their assets.
More than $92 billion of the 2017 total was spent on coal, iron ore and steel deals as investors stayed loyal to a sector that still generates steady profits despite the global drive to reduce pollution.
Analysts predict continued demand, even though coal is the biggest source of the carbon emissions that the 2015 Paris Agreement aims to curb. Steel-making, which uses iron ore and coking coal, accounts for an estimated seven percent of industrial direct CO2 emissions, industry figures show.