Focus: Smaller miners’ hunger for cash grows as copper prices fall, sparking M&A bets – by Divya Rajagopal and Melanie Burton (Reuters – July 24, 2023)

A fall in copper prices is having an outsized impact on small and mid-sized miners, forcing many to cut output, and some are now open to raising funds from new investors to ride out the current downtrend, several company executives told Reuters.

Copper is set to play a crucial role in the transition to a greener economy and cashed-up bigger miners are seeking assets with longer mine life and high-quality grade ore to meet the growing demand for the red metal.

Depressed prices for the red metal due to global economic growth concerns, however, are forcing some small-to-mid sized companies to cut back exploration budgets and other expenses. But that may not be sufficient for them to survive and the current scenario may pave the way for more M&A in the sector, company executives and analysts say.

So far this year, some $22 billion worth of copper M&A has been launched, according to Reuters calculations, including Toronto-based Hudbay Minerals’ $439 million bid for Copper Mountain, Lundin Mining’s purchase of Japan’s JX Nippon Mining and Metals stake in Caserone mines in Chile, and Newmont Corp’s planned acquisition of gold and copper miner Newcrest for $18 billion.

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