Increased competition for Mining M&A’s

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All last year we read about merger after acquisition in the mining industry.  However all the players in the market were Chinese.  Expect that to change.  Analysts expect international investors to return in force now that the financial crisis worst seems to be over.  The most agressive will probably be India and Japan.All last year we read about merger after acquisition in the mining industry.  However all the players in the market were Chinese.  Expect that to change.  Analysts expect international investors to return in force now that the financial crisis worst seems to be over.  The most agressive will probably be India and Japan.In the first quarter of 2010, there were 231 global M&As in the mining and finance sector which is about 3 times more than first quarter 2009. Completed deal volume checked in at about $12B usd.  The sudden rise in competition for M&A deals caused prices to spike and many investors to begin looking at less stable geographical locations such as South America and Africa.  South America alone saw a +189% rise in M&A deals.Expect to see potential suiters try to sweeten deals with offers of technology, and large infrastructure projects in order to sway political opinion.  Countries such as China that cannot offer the technology options that Japan can, for example, will be at a disadvantage as they can only bid up prices.  In addition many targets of mergers and acquisitions plan on raising taxes on such investments which certainly will cause mining companies further heartache.

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