REGULATORY scrutiny of major mining mergers is intensifying as governments focus more closely on critical minerals and security of supply amid geopolitical uncertainty, Reuters reported.
However, industry executives do not see it as a fundamental barrier to dealmaking. CEOs at Glencore, Anglo American and Rio Tinto said following recent half-year results that antitrust and national-interest reviews are becoming increasingly important when evaluating transactions, particularly those involving copper and other strategic minerals.
Glencore CEO Gary Nagle said regulators have always examined M&A, but are paying greater attention because of geopolitics and the growing importance of critical minerals. Companies are therefore factoring regulatory feasibility into potential transactions from the outset.
Still, valuation, strategy and shareholder considerations appear to be bigger obstacles. Recent proposed mega-deals, including discussions between Rio Tinto and Glencore and BHP’s attempts to acquire Anglo American, failed to progress despite renewed pressure for industry consolidation.
Anglo American’s proposed merger with Teck Resources illustrates the changing regulatory environment. China remains the last major jurisdiction yet to approve the transaction and could seek supply-security commitments rather than asset disposals. The combined company would account for only about 5% of global copper production.
Anglo CEO Duncan Wanblad said approvals can now require 12 to 18 months, but maintained that mining transactions are achievable.
Rio Tinto CFO Peter Cunningham similarly said regulatory constraints require careful consideration, while describing changing levels of scrutiny as part of the industry’s normal cycle.
