Mining companies are announcing record-high business deals as miners battle for control over minerals needed to make electric cars and other green energy infrastructure, paving the way for the world’s largest miners to seal their biggest deals in more than 10 years.
The revived deal-making comes as mining companies seek to boost their production of metals such as copper, nickel, and lithium, which are expected to grow in demand as more countries shift their focus to renewable energy sources. As a result, mining companies have reported more than $65 million in pending and completed deals so far this year — nearly double the number reported in the same time frame last year.
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It’s not guaranteed all those deals will be completed, but the number indicates a strong interest among mining companies to get a headstart as countries transition to different energy sources. That’s especially true for copper mines, which some experts expect to rise in interest because it’s far easier to purchase one than to build a new one.
“Governments are trying to hit targets for electrification, but there’s just not enough copper,” Peter Kukielski, chief executive of Hudbay Minerals Inc., told the Wall Street Journal. “Copper is an absolutely key element required for a green economy […] and there’s a very significant shortfall between copper demand and the number of viable projects coming online.”
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The shift to such minerals comes after companies have been offered incentives by the federal government to encourage domestic production of semiconductors, electric vehicle batteries, and their critical material components. Most mining companies have focused on iron ore and coal in recent decades but are now turning to metals that are expected to grow in demand as countries seek to decarbonize.
Copper has been at the center of several significant mining deals, particularly because it’s used more often for electric-powered cars and wind farms than that of gasoline-powered cars and coal power stations. Companies have also been eyeing deals with lithium and nickel miners.
