Critical minerals potential boosts Brazilian mining M&As

The Brazilian mining sector saw a record number of mergers and acquisitions (M&A) last year, and that momentum is expected to continue in 2025, driven by the country's significant critical minerals potential.

The sector registered 30 M&A operations, up from 21 in 2023. The figure is the highest since 2014, when record-taking began, according to a survey by KPMG.

"We are seeing a growing trend of project sales, portfolio swaps, farm-ins, farm-outs, with a lot of activity related to acquisitions of areas associated with critical minerals, such as lithium, rare earths. This trend started to gain traction in 2023 and has accelerated in 2024, and we should see its continuation throughout this year," Paulo Guilherme Coimbra, director of infrastructure, energy and natural resources at KPMG, told BNamericas.

"In recent years, we have seen mining gaining space in ESG and innovation agendas, with critical minerals being increasingly demanded and stakeholders from other sectors entering the segment to ensure supply. This scene has always been very common in the energy sector, where companies from other segments would buy assets to guarantee supply, and it is now starting to show signs that this could happen in mining as well," said Coimbra.

M&A activity tends to increase when junior companies face difficulties in financing their projects. 

"In times of high interest rates, as we have in Brazil today, which also makes financing through the capital markets difficult, an M&A operation is indeed a financing option that should be considered," Alexandre Pierantoni, head of corporate finance and M&A at Kroll, told BNamericas.

The local mining segment is also attractive for foreign investors, as 12 of last year's transactions involved the acquisition of an asset by an international player.

"Brazil offers a unique combination of competitive and skilled labor, affordable energy costs and a strong commitment to environmental and social sustainability. Brazil has rich, high-quality deposits of nickel and other minerals that are critical for the energy transition, and the government is actively assessing these resources and looking at how it can encourage their development," Mark Travers, the CEO of UK-headquartered Brazilian Nickel, told BNamericas.

Already a major global iron ore player, Brazil is increasingly focused on boosting minerals associated with the energy transition, like copper, nickel and lithium, which could pave the way for more M&As.

In February, Anglo American and MMG Singapore Resources, a unit of China's MMG, reached a definitive agreement regarding the sale of Anglo's Brazilian nickel operations for US$500mn. The deal involves the Barro Alto and Codemin ferronickel operations and the Jacaré and Morro Sem Boné greenfield projects.

Kazakhstan's Eurasian Resources Group put its Brazilian iron ore mining company Bahia Mineração up for sale, and a consortium comprising Vale, local miner Cedro Mineração and development bank BNDES, along with UK-based Brazil Iron, are evaluating the asset, a source familiar with the transaction told BNamericas.