It would have been the biggest deal in the history of the gold mining sector. The world’s two largest gold miners, Canada’s Barrick Gold (TSX: ABX) and America’s Newmont Mining (NYSE: NEM), were furtively negotiating a potential $35bn (£21bn) merger until April. But talks soon collapsed after the larger-than-life personalities at the top of the rival firms simply could not get along, nor agree where the head office should be located.
The scuppered union nevertheless serves to highlight how merger and takeover activity has returned to the mining industry with a bang in 2014. In Canada alone, there have been 41 mining deals so far this year worth C$7.1bn (£3.8bn), according to data compiled by the Financial Post. By comparison, there were just C$9.3bn of deals across the country in the whole of 2013.
True, deal-making remains a far cry from the free-wheeling peak years like 2010 and 2011. And a recent report from Ernst & Young estimates the total value of global mining deals fell to $16.7bn in the first half from $22.8bn last year, excluding Glencore’s $31bn acquisition of Xstrata in May 2013. Yet there is a growing feeling that the mining downturn may finally be reaching a bottom.