http://www.canadianminingjournal.com/
Peter Bryant is an advisory board member for the World Economic Forum’s Mining 2050 initiative and a managing partner at Clareo, a growth strategy and innovation consulting firm. Kulvir Gill is a senior principal at Clareo. Learn more at www.Clareo.com.
CHICAGO – The writing is on the wall for Canadian mining companies and it has been for quite some time. Their glory days as a global leaders are fading – and mega-mergers won’t bring salvation.
Market signals are already showing troubling signs of this shift in the sector. While Canada’s GDP saw a 0.3% lift in January, which was the biggest gain in eight months, this dramatic uptick didn’t spill over into every industry.
Mining still felt the pinch in a time where miners globally are revelling in rebounding commodity prices and company profits. This should be no surprise since Canada’s share of international exploration has dwindled to 13.8% in 2017 from 20.5% in 2008, according to the Mining Association of Canada.
The most significant signs of change are the mega-merger of Barrick Gold and Randgold and Newmont’s acquisition of Goldcorp which will move two of the largest miners out of the country, as well as greatly decrease the market cap of mining companies within its borders.
One bright side of consolidation is the shifting landscape may open up growth opportunities for Canadian junior and mid-tier miners, such as Agnico Eagle Mines. Mergers within this tier are also a likely business maneuver, which will be difficult to disregard as a means of expansion, when comparing recent M&A activity and their incentives.
For the rest of this article: http://www.canadianminingjournal.com/news/comment-mega-mergers-will-bring-short-lived-glory-if-miners-ignore-innovation/