China seen sustaining recovery in global mining M&A – by Tom Daly (Reuters U.S. – October 18, 2018)

TIANJIN, China (Reuters) – A rebound in mining mergers and acquisitions is set to continue into 2019, led by companies from top metals consumer China, as a dearth of exploration spending leaves the industry in need of fresh investment, delegates told a conference on Thursday.

Sector M&A in mining powerhouse Canada had its best quarter in more than seven years in July-September, spurred by Barrick Gold Corp’s (ABX.TO) planned $6.5 billion acquisition of Randgold (RRS.L) and Chinese firm Zijin Mining’s (601899.SS) C$1.86 billion ($1.43 billion) deal to buy Nevsun Resources (NSU.TO).

“We think that this year and next year will be the years of consolidation,” Keith Spence, president of Canada-based Global Mining Capital Corp, told the China Mining conference in Tianjin.

Spence, whose company co-invests in mining projects with Chinese firms, told Reuters he had been pushing them to buy assets three or four years ago when metal prices were low, to no avail. “Now the market is up and we’re getting a lot of interest from the Chinese,” he said.

When nobody is replenishing reserves, a round of M&A or consolidation to kickstart investment is the only answer, Spence explained.

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