Mining Hot Spots in 2011

According to Metals Economics Group’s (MEG) recent Strategic Report, the 2011 dollar volume of significant ($25 million minimum) acquisitions totaled $47.4 billion—down 4% from 2010’s $49.3 billion. In the context of an ongoing European economic crisis and lower growth expectations for China, 2011’s total spending signifies the mining industry’s relative confidence in the stability of metals prices and demand, after a period of significant strategic retrenchment and caution following the worldwide recession and sharply lower metals prices that began in late 2008 and lasted into early 2010.

Data analyzed from MEG’s Acquisitions Service shows copper deals dominated base metals acquisitions spending, accounting for the lion’s share of the 47% increase in the total base metals (copper, nickel, and zinc) spending of $29 billion in 2011. In contrast, gold acquisition spending slipped 39% year on year, to a total of $18.4 billion.

Base Metals and Gold Acquisitions Dollar Volume, 2002-2011

Considering the 50 base metals transactions, acquisitions with primary assets in Latin America accounted for 62% of the acquired in-situ value in 2011. Assets in the Australia-Pacific region accounted for 14% of the total, Africa 12%, Asia 5%, North America 4%, and Europe 3%. The acquired value of reserves and resources in 2011 base metals transactions totaled $697 billion, including 68.5 million mt of copper.

Base Metals Acquisitions by Region, 2011

Of the 54 primary gold transactions, Africa was tops with 12 deals containing $77 billion of in-situ value—33% of the 196.8 million oz acquired globally. It was followed by Asia with six transactions accounting for 21% of the total.

In U.S. dollar terms, the total price paid in 2011’s primary gold transactions fell 38% compared to 2010, and the quantity of gold acquired slipped 11.5%. The most active acquirers by value in 2011 were Canadian gold companies with 15 transactions out of the total 54. Chinese companies were next with seven deals.

Gold Acquisitions by Region, 2011

From the article entitled, “Significant Gold and Base metals Spending Totals $47.4 Billion” by Metals Economics Group. Metals Economics Group (MEG) is a trusted source of global mining information and analysis. With three decades of comprehensive information and analysis, MEG has an unsurpassed level of experience and historical data. The information provided herein has been provided to by the author and, as such, is subject to our disclaimer: CLICK HERE.

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