Key facts
- Mining executives state that increased regulatory scrutiny on mergers, especially involving critical minerals, is a growing factor.
- Despite this, they believe regulatory hurdles are not making large mining mergers and acquisitions unworkable.
- Valuation, strategy, and shareholder considerations are identified as more significant obstacles than regulation.
- Anglo American's CEO noted that regulatory approvals for mining transactions may now take 12 to 18 months.
- Governments are increasingly focused on control of strategic mines and supply security, beyond just competition.
Mining industry leaders have indicated that while regulatory scrutiny for mergers is intensifying, particularly concerning critical minerals and national security amid geopolitical volatility, these increased checks are not fundamentally hindering dealmaking. Executives from major firms like Glencore, Anglo American, and Rio Tinto acknowledged that antitrust reviews and national interest considerations are more prominent factors in assessing potential transactions.
Despite these evolving regulatory landscapes, the executives maintain that these hurdles are manageable. Glencore CEO Gary Nagle noted that while watchdogs are paying closer attention due to global geopolitics and the importance of critical minerals, regulatory approval is a factor considered before pursuing transactions, and they would not pursue deals deemed unachievable.
More significant obstacles to large mining mergers and acquisitions in recent times have appeared to be valuation, strategy, and shareholder considerations, as evidenced by failed mega-deals involving Rio Tinto, Glencore, and BHP. However, the proposed merger between Anglo American and Teck Resources illustrates the changing regulatory environment, with China's approval still pending and potential remedies focusing on supply security rather than outright asset sales.
Governments are now scrutinizing deals not only for competitive impact but also for control over strategically important mines and the security of critical mineral supplies. Anglo American's sale of nickel assets to China's MMG is under in-depth investigation by the European Commission due to concerns about diverting supply from European markets. Anglo CEO Duncan Wanblad stated that while transactions might take longer, around 12 to 18 months for regulatory approvals, this does not make them impossible. Rio Tinto CFO Peter Cunningham echoed the need for discipline and deep consideration of regulatory constraints, viewing fluctuations in scrutiny as part of the industry's normal cycle.