Deal-hungry miners return to Toronto with EV metals in focus
As the mining industry gathers in Toronto this week for one of its biggest annual events, the focus will be on two groups of metals: one that’s seeing soaring demand across the world, and another with almost no industrial utility.
Thousands of investors, executives, bankers, and government officials are set to converge on the Prospectors & Developers Association of Canada conference at the biggest mining hub in the Americas.
After a multi-year slump, the industry is beginning to pick up on the back of the rising consumption of metals like nickel and lithium used in batteries.
Long-term projections for electric vehicles show an urgent need for new mines for those elements.
But another theme also likely to dominate the PDAC show from June 13-15 is dealmaking in the gold industry, weeks after a pair of
multi-billion dollar deals involving Canadian miners created two of the top global gold producers.
“We are going to see consolidation continue,” Jamie Rogers, co-head of global metals and mining at Bank of Montreal’s investment banking division, one of the industry’s top dealmakers, said in an interview.
Mergers and acquisitions are being driven by a desire by companies to increase scale and improve their financial footing, “which means being big enough and liquid enough to attract a larger investor community.”
Interest in the key minerals needed to build and power EVs, wind turbines, solar panels, and battery storage are expected to pique investor interest at PDAC, which returns to an in-person gathering after the pandemic made 2021’s event a virtual affair.
CRU Group will unveil its latest global outlook on copper, a key industrial metal needed in the push toward electrification, while other sessions will highlight lithium and other battery metals.
“These are inherently linked to exploration and mining,” PDAC President Alex Christopher said.
“The transition cannot be realized without the minerals and metals needed to facilitate electrification and build the infrastructure needed for low-carbon technologies.”
The challenges arising from constrained global supply chains and the lingering impacts of covid-19 on mining operations will also be among the topics reflected throughout the conference, Christopher said.
Metals producers have been strengthening their balance sheets and reining in costs while generating cash flows to reward investors with dividends and share buybacks after learning lessons from overspending at the peak of the commodity supercycle more than a decade ago.
New industry challenges have emerged as global disruptions to commodities and logistical snags clash with surging demand for metals needed to underpin the global push to electrify economies and embrace less polluting technologies.
CATL kicks off $6.7 billion placement
Contemporary Amperex Technology Co. Ltd., the world’s biggest maker of batteries for electric cars, has kicked off an A-share private placement that could raise about 45 billion yuan ($6.7 billion), according to terms of the deal seen by
Bloomberg News.
The Ningde, Fujian-based company has set a floor price of 339.67 yuan for the placement, the terms show.
It plans to price the share sale on Wednesday, according to people familiar with the matter, who asked not to be identified as the information is private.
The placement includes a greenshoe option that could take the deal size to about $6.87 billion, IFR reported earlier on Monday, citing unidentified people.
CATL flagged the placement earlier, saying in a filing to the Shenzhen stock exchange in November that it was cutting its size to 45 billion yuan from 58.2 billion yuan.
Proceeds will be used for the production and upgrade of lithium-ion battery manufacturing in four Chinese cities, as well as research and development.
www.mining.com/category/battery-metals
Food for thought on the Road to Mining Manono
Frank
