Energy & Natural Resources (ENR)

Mining & Metals

Deals Activity: Moderate

Restructuring Activity: Moderate

Commodity price surges benefit the sector, but environmental regulatory pressure is likely to increase costs in 2022 and beyond.

Deals activity in Mining & Metals

1. Quarterly deal volumes have been low but showing a notable uptick in recent quarters.

2. We don't anticipate significant deal activity in the coming months, but further investment in global resource extraction may lead to non-core asset disposal in the longer term.

Restructuring activity in Mining & Metals

Macroeconomic conditions continue to dominate the commodities markets with a knock-on impact on the metals and mining sector.

The recent uplift in commodity prices been at least partially offset by increased input costs, including energy and labour.

Despite the ongoing economic slowdown dampening demand in 2023, commodities critical to the effort are likely to emerge from at least 2024.

Mining & Metals

Supply chain crinkles continue to cause issues in the metal and mining sector. Demand for certain raw materials that saw a marked reduction during the pandemic, such as steel, have recovered. Shortages have shifted the supply versus demand balance, with metals and other natural products selling at a premium across the sector.

Headwinds persist, however, with the performance of the sector inextricably linked to the success of the wider economy. The economic downturn will lead to a reduction in aggregate demand, while the potential of a European energy crisis could hit demand for raw materials that can't be processed. As a result, we expect raw material prices to continue trending towards pre-pandemic norms.

A pivot towards renewable technologies is having an immediate and lasting effect on the sector. The environmental impact of raw material extraction and metal production processes will face ever-greater scrutiny, with anything less than 'best-in-class' operations and plants likely to become unviable. The growing demand for advanced batteries and technology products is going to require new sources of hard-to-acquire raw materials such as cobalt. Extracting these vital new materials in an environmentally and ethically responsible way will be critical and require significant investment.

Find Your Expert

James Fagan is Interpath Lead for the ENR sector, which includes Mining & Metals as one of four core segments. Joshua Dwyer leads our approach to the Mining & Metals sector nationally. For a full list of our senior people with experience in this area use the button below.

Our senior team