Africa, Middle East mining investment deals rise despite global economic slowdown

AFRICA/MIDDLE EAST – Overall deal activity in the Middle East and African metals and mining industry increased by 16.7% in the second quarter despite a slowdown in global economic, a new report by GlobalData’s deals has revealed.

According to the report by GlobalData, twenty-eight deals for the region worth $1.44-billion were made during the Q2 2020, against the last four-quarter average of 24 deals.

Of all the deal types, mergers and acquisitions (M&A) saw most activity, with 26 transactions while private equity accounted for the other two deals.

In terms of deal value, private equity was the leading category in the Middle East and Africa with $1-billion, while M&A deals totalled $444.98-million.

Mining deals in the global scene however, declined by $5.3-billion to $20.6-billion in the second quarter, reports data and analytics company GlobalData.

“Mining M&A values dropped by 30.5%, or $2.9-billion, in the second quarter, while there was a 24.8%, or $3.7-billion, drop in the capital raised by mining companies during the second quarter.”

The total volume of deals increased from 860 in the first quarter to 1 411 in the second, owing to an 84.9% increase in the total number of completed asset transaction deals in that quarter.

Canada, Australia, the US and the UK accounted for more than 90% of the total deal volume and more than 50% of the total deal value.

The largest of the completed deals was PT Indonesia Asahan Aluminium’s raising of $2.5-billion by offering three sets of bonds at 4.75% (due in 2025), 5.45% (due in 2030) and 5.8% (due in 2050).

According to the report by GlobalData, the top five metals and mining accounted for 98.7% of the overall value of deals in Africa and Middle East during the period.

The combined value of the top five metals and mining deals stood at $1.43-billion, against the overall value of $1.44-billion recorded for the quarter.

Templer Investment’s $1-billion private equity deal with Jindal Shadeed Iron & Steel was the region’s largest investment deal during the period under review.

It was followed by the $300-million asset transaction between AngloGold Ashanti and Harmony Gold Mining.

 Northam Platinum’s $69.04-million acquisition of Zambezi Platinum came in in third place and was closely followed by the the $45-million asset transaction between B2Gold and West African Resources.

Hummingbird Resources’ acquisition of Cassidy Gold Guinea for $12.67-million closed came in at a distant fifth and closed the top five mining deals transaction deals in the Africa and Middle East region.

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