Canada’s move to protect mining sector shields takeover targets
Teck Resources spent much of last year fending off Glencore’s $23 billion takeover attempt before the Swiss company opted instead to just buy the company’s steelmaking coal business.
The mining industry is ripe for further consolidation driven by demand for metals such as copper needed in the energy transition and challenges accessing capital, the boss of the world’s biggest gold miner Newmont Corp said on Thursday.
Newmont CEO Tom Palmer pointed to artificial intelligence as a surprisingly large new source of copper demand.
“It’s quite remarkable to see that move in AI that we didn’t see even two years ago,” Palmer said at an industry event in Melbourne.
“The world is going to continue to see the demand for copper drive more buying opportunities,” he said.
“And I don’t think that’s going to be the end of these tectonic plates shifting in the mining industry.”
The vast gold sector was also ripe for consolidation, he said, amid challenges accessing capital while minimizing costs from the move to become zero carbon mines.
Top global miner BHP Group’s recent pursuit of rival Anglo American was the biggest example of the industry’s appetite for deals.
Following Newmont’s $17.14 billion takeover of Newcrest last year, Palmer said the company was progressing well on plans to divest eight assets, trim its workforce and cut debt.
Newmont is looking to offload its Eleonore and Musselwhite mines and a development project in Canada, a mine in Colorado and the Akyem mine in Ghana. In Australia, the assets up for sale include the Telfer gold mine and a 70% stake in the Haverion copper-gold project that it owns with Greatland Gold.
“(We are) quite excited about the level of interest in each of those assets,” he told reporters.
The miner in February said it aims to realize over $2 billion in cash from portfolio optimization with Newcrest and will focus on growing its core assets as part of its transformation strategy.
“We have got a very full plate,” Palmer said.
The company has benefited from a 15% jump in gold prices this year, with gold demand soaring due to global macroeconomic uncertainty.
Central banks and the middle class in China, India and the US are expected to continue buying gold, he said, with gold ingots “walking off the shelf” at US supermarket chain Costco.
(By Melanie Burton; Editing by Clarence Fernandez and Sonali Paul)
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