Maravi

Global mining companies on acquisition trail

Global mining companies on acquisition trail
By Joan Chirwa
Saturday June 21, 2008 [04:00]

CHIEF executives of global mining companies are on the acquisition trail as they believe mining companies are still being undervalued by a market that has not fully grasped the story of China and other fast-developing countries. According to PricewaterhouseCoopers (PWC), a new generation of mining CEOs believes demand for metals will outstrip supply by far in the near future as they have learnt that bringing on new supply is difficult and costly.

A review of global trends in the mining industry conducted by PWC indicates that the CEOs of mining giants believe the market and analysts still do not fully comprehend the story of China and other fast developing countries that will lead to the increase in demand to occur over the next decade.

Mineweb reports that Hugh Cameron, African Mining leader at PWC, notes that the high level of cash generated at the top of the industry, implied that large companies did have the cash to make acquisitions.

"The CEOs believe that analysts haven't understood the China and India story and that the future prices they are using in their models are out of date," said Cameron. "The subprime crisis has also carried a silver lining for big miners as it has led to lower stock prices, while it would now also be more difficult to finance projects owned by juniors."

Interestingly, companies based in emerging markets are expanding globally and mining CEOs recognise the top end of the industry is not the domain of Western companies any longer.

Labels: MINING

posted by MrK @ 3:59 AM