Mining & Metals

Q1 2023 saw five deals in the Mining & Metals sector. Whilst this is an increase on the previous quarter, deal numbers continue to follow the trend over the past few years of remaining very low. Notable deals executed during Q1 2023 include:

• Lockhead Martin’s sale of UK Seabed Resources to Loke Marine Minerals for an undisclosed fee.
• Euromax Resources’ receipt of development funding from ND Group and Trafigura Group.

Deals activity in this sector has been influenced by:

• Commodity Prices – high commodity prices have strengthened the balance sheets of many businesses in the industry, reducing dependence on traditional bank debt as a means of financing M&A.
• Industry Convergence - convergence across the energy, utilities and resources sector is accelerating as companies continue to reshape their asset portfolios to align with their strategic energy transition ambitions.

Restructuring activity in this sector remains high. Despite companies reaping the rewards of high commodity prices in 2022, some prices are starting to weaken alongside deteriorating global macroeconomic conditions. Producers will be impacted by narrowing margins, while the exploration sector will restrain activity amid tighter financing conditions. The outlook remains unclear for a sector so sensitive to market prices.