Sander Grieve comments in Lexpert's 2022 Special Edition on Mining on how market volatility and uncertainty about the economy might impact dealmaking in the mining sector.
“Some of the pressure has come off price,” he says, but “there’s also the expectation that this is a temporary effect of where we are right now, which seems to be an inflation story.”
In the long term, the “demand is there” for critical minerals, along with base metal components needed to feed the growing interest in decarbonization and electrification in sectors such as the auto industry.
Sander says, “If you looked at the recent flagging prices of copper and nickel, key components in electrification, you’d think that no one was going ever to drive an electric car.” However, this isn’t likely to be the case. And indeed, while nickel prices are slumping, copper prices have rebounded somewhat from this year’s lower prices.
“There are a lot of people who will sit on the sidelines now and watch to see how things settle out before they’re going to instigate a deal or accept these current valuations,” he says. “You might see a bit of an M&A slowdown, but that will change, as there are deals that must be done and people who will see opportunity.”