LatAm mining M&A deals topped US$9bn in 2021

M&A activity in Latin America’s mining sector is heating up, with companies seeking to secure growth through deals in a high metals price environment.

Mining companies closed or announced at least nine US$100mn-plus M&A deals targeting LatAm assets in 2021, with a combined value of US$9.24bn, according to industry information compiled by BNamericas.

The figure compares to US$2.58bn in 2020, when deals were held up due to COVID-19 restrictions, and US$14bn in the previous year, in which volumes were dominated by Newmont’s US$10bn takeover of Goldcorp.

Almost half the 2021 total is targeting lithium assets, ahead of a forecast boom in demand for the battery metal, driven largely by electric vehicles, with the remainder spread over primary gold and copper mines and projects.

TOP 2021 LATAM MINING M&A DEALS

1. Capstone Mining-Mantos Copper

Value: US$3.30bn

Metal: Copper

Capstone and Mantos announced a planned merger in November, which aims to establish a premier Americas-focused copper producer, to be named Capstone Copper.

The merger, worth about US$3.3bn, will combine Mantos’ Mantos Blancos and Mantoverde mines in Chile with Capstone’s Cozamin and Pinto Valley mines in Mexico and the US, respectively, and the Santo Domingo project in Chile.

The merged business will aim to deliver sharp production growth, with fully financed investments at Mantos Blancos and Mantoverde pushing production to around 260,000t/y copper by 2024, from around 175,000t in 2021.

Development of Santo Domingo will increase output to around 380,000t/y.

“This transaction is in line with our strategic vision of growing a multi-asset and sustainable copper business in the Americas,” Capstone CEO Darren Pylot said in the announcement.

2. Orocobre-Galaxy Resources (Allkem)

Value: US$3.06bn

Metal: Lithium

Orocobre and Galaxy Resources completed a US$3.06bn merger in August, in a deal aimed at creating the world’s fifth largest lithium company.

Key assets of the combined business – which was renamed Allkem in December – include the Salar de Olaroz operation and Sal de Vida project, both in Argentina, along with assets in Australia and Canada.

3. Zijin Mining-Neo Lithium

Value: US$751mn

Metal: Lithium

Zijin Mining announced a Cdn$960mn (US$751mn) all-cash offer for Neo Lithium in October, targeting control of the latter’s Tres Quebradas (3Q) lithium brine project in Argentina.

“The 3Q project represents an important addition to Zijin’s growing global asset mix and it is a good choice for Zijin to enter the field of new energy metals,” company chairman Chen Jinghe said at the time.

Neo Lithium shareholders approved the deal in December, with the transaction expected to close this quarter.

4. Lundin Mining-Josemaria Resources

Value: US$485mn

Metals: Copper, gold

Lundin Mining will acquire the Josemaría copper-gold project in Argentina in its planned takeover of Josemaria Resources, in a cash and shares offer worth Cdn$625mn (US$485mn).

The proposed deal, announced in December, aims to materially increase Lundin’s production, with Josemaría expected to produce over 130,000t/y copper and 225,000oz/y gold over a 19-year mine life.

“Josemaría is a world-class copper-gold project that has many characteristics which make it the ideal project, at the right time, for Lundin Mining to advance in the next phase of our growth,” CEO Peter Rockandel said.

Both Lundin and Josemaria Resources are part of the The Lundin Group.

5. Equinox Gold-Premier Gold Mines

Value: US$480mn

Metal: Gold

Equinox completed its US$480mn takeover of Premier Gold Mines in April, which added the Greenstone project in Canada and the Mercedes mine in Mexico to its portfolio.

The company announced plans to sell Mercedes to Peru-focused Bear Creek Mining in December, for cash and shares worth US$125mn.

6. Lithium Americas-Millennial Lithium

Value: US$400mn

Metal: Lithium

Lithium Americas is closing in on its planned acquisition of Millennial Lithium following a bidding war for the company, whose main asset is the Pastos Grandes lithium project in Argentina.

Lithium Americas, which is developing the Cauchari-Olaroz lithium project in Argentina and Thacker Pass in the US, outbid Chinese rivals CATL and Ganfeng Lithium in its US$400mn offer, announced in November.

The acquisition is expected to close this month.

7. Ganfeng Lithium-Bacanora Lithium

Value: US$386mn

Metal: Lithium

Directors of UK-based Bacanora Lithium accepted a sweetened takeover bid by Ganfeng Lithium in August, in which the Chinese firm aims to gain full ownership of the US$420mn Sonora lithium project in Mexico.

The 386mn British pounds (US$522mn) offer is advancing, with Mexican anti-trust approval confirmed in December, along with shareholder support.

OTHER DEALS

Smaller M&As in 2021 include Gran Colombia Gold’s Cdn$315mn acquisition of Gold X Mining, with the Toroparu gold project in Guyana, which closed in June.

Hochschild Mining announced plans to acquire all the shares of Amarillo Gold in a Cdn$164mn offer.

Amarillo has the Posse Gold and Lavras do Sul gold projects in Brazil.

The deal, announced in November, is expected to close this quarter.