Interesting article on the mining sector and the p

Interesting article on the mining sector and the private equity funding it. 

http://www.bloomberg.com/news/2014-02-03/mini...g-m-a.html



The world’s mining assets may be the target of mergers and acquisitions as an $8 billion pool of private-equity money that has lain dormant is stirred this year by attractive valuations and predictions of resilient demand for raw materials.

Some of the biggest names in the industry are keen to buy assets at the same time as the world’s largest producers including  Rio Tinto Group are shunning unwanted mines. Former chief executive officers  Mick Davis of Xstrata Plc and Barrick Gold Corp.’s Aaron Regent are plotting a return to the business by buying mining projects, backed by private funds. Last week two new mining investment ventures were started, one backed by Warburg Pincus LLC, the other founded by two former JPMorgan Chase & Co. bankers.

While buyout firms have increasingly targeted mining since 2012, only about 14 percent of the almost $10 billion raised in the last two years has been deployed, according to data compiled by Bloomberg Industries. That could change if they face pressure from their investors to act, Michael Rawlinson, co-head of mining and metals investment banking at Barclays Plc.

“They’ve all set up, no one’s done anything,” London-based Rawlinson said. “The sand is going through the hourglass and the money is going to get taken away if they don’t start spending.”