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M&A deals continue as companies look to secure copper production
In 2024, the copper sector saw a slight increase in deal count, rising from 36 in 2023 to 38. However, the total deal value declined by 34%, dropping to US$7.7b.iv Despite this, M&A continues to play a crucial role in expanding footprints, particularly in copper-rich regions, as companies strive to boost production capacity in the face of a lack of major new discoveries, despite strong exploration budgets.
The Americas, especially Chile, Peru and Canada, continue to be a key hotspot for copper M&A, driven by rich mineral deposits and strategic growth opportunities. Recently, three major deals worth a combined US$3.5b were signed to bolster copper production, optimize shared infrastructure and unlock operational efficiencies, driving economies of scale.
Copper companies are refining portfolios to focus on core assets while forming strategic partnerships. Vale's sale of a 10% stake in its Base Metals division to Manara Minerals highlights the sector's shift toward prioritizing core copper projects for reinvestment and long-term growth.v
Rising regulatory and geopolitical uncertainty is impacting the supply-demand and trade dynamics
a) Argentina’s regulatory changes aim to support copper output
Argentina is positioning itself as a significant player in the copper landscape through policy reforms and global shifts. The country has lifted export restrictions on scrap metal and introduced the Regime for Large Investments (RIGI) program, which provides incentives like tax credits and reduced duties to draw investments, targeting the country’s potential of 1.2mt copper output by 2030. The government is also easing environmental rules to boost economic growth and trade.
b) Recent policy changes in the US and Canada are reshaping copper trade and supply chains
In the US, the new administration aims to expand tariffs and reshore critical supply chains and manufacturing production. Proposed tariffs on Chinese imports and a 25% tariff on copper imports from Canada and Mexico could impact trade flows, pricing and metal availability, potentially triggering reciprocal tariffs on US exports.vi
Permitting processes in the US involving multiple agencies could be streamlined by adopting practices like those in Canada and Australia. The new administration faces the decision to greenlight the Resolution Copper project in Arizona, potentially North America's largest copper mine with an estimated 0.5mt annual production.
Canada recently imposed a 100% tariff on Chinese-made electric vehicles (EVs), aiming to potentially drive demand for domestically sourced copper to support EV production. However, these policies also pose risks, such as fluctuations in copper prices and barriers to foreign investments in mining.