2017 was an encouraging year for investments by mining private equity firms with $2.3bn invested across 60 deals.
Both the number of deals and the amount invested were up on 2016 levels but down from 2015 peak activity of $3.2bn across 119 deals.
2015 peak activity was driven by increased stakes, often to protect investment in distress situations.
By value, nearly half (45%) of the investments were into Africa.
This is more than the total of all of the investments in the previous three years although one large acquisition and another acquisition accounted for a significant portion of this amount.
Australia has yet again seen more than $400m invested for the third time in the last four years.
Geographically, South America was the least popular, with less than $100m being invested for the second successive year.
North America has also remained fairly static in 2017 in terms of amount invested.
Large movements year on year between the geographies has tended to be driven by acquisitions.
Gold, coal and potash were the three most favoured commodities in 2016.
In 2017, these were replaced by copper, gold and nickel, although there were a number of deals which also included exposure to zinc.
In 2017, copper was the standout commodity by number of deals with 20 deals, followed by gold with 14 deals. Gold saw over $1bn of investments in 2016 although this dropped to approx. $250m in 2017.
Coal, which saw $334m of investments in 2016, saw less than $100m in 2017, seeing it drop out of the favoured commodities, perhaps reflecting political sentiment.
Both of these were more than offset in 2017 by the increase in popularity of deals with exposure to copper.
Although this accounted for a third of deals, it also accounted for $1.625bn of the investments, a staggering 70% by value.
Battery metals were the third most popular investment, accounting for 14% of deals and approximately $175m of investment.
Our short video captures the highlights of our fourth annual report focused on private equity investments into the mining sector.
We take a close look at the number and value of all deals within the sector; the popular geographies and jurisdictions; and the structure of the investments themselves.
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