Diggers Day 3: Is a string of M&As on the way?

A handshake indicating mergers.

Could the result of Diggers and Dealers 2020 be a year of mergers and acquisitions?

Western Australia’s hard border closure meant this year’s Diggers and Dealers was more like “old-home week” for the state’s mining industry, but the result could be a string of mergers and acquisitions.

 

That’s according to Shane Moore, Mining People’s General Manager of Workforce Operations, who said the more intimate, WA people based forum this year had given miners and explorers the chance to have a good look at the opportunities around them.

 

“The Covid restrictions meant there were really no big interstate or overseas institutional bankers attending — essentially meaning only WA based representation  on the dealing side — so this year was more of a Diggers and Diggers conference,” he said.

 

“So, the conversations were more on a mining company to mining company level. It was not so much about deals being done but conversations like ‘hey, we’ve got this patch of ground, you’ve got that ground — there could be synergies here…

 

“It’s also been said a number of times that the industry is heading into a merger and acquisition phase, so I think what we could see as a consequence of this year’s Diggers and Dealers is more of these companies talking and merging.”

More mergers to follow in Northern Star and Saracen’s footsteps

Moore said he understood a number of mid-tier companies and “cashed-up producers” were looking to acquire smaller explorers.

 

“One COO said to me, ‘if you have a story of 80,000 to 100,000 ounces per year for the next 8 to 10 years, then you’ve got or starting to get a target on your back — because you’re in the prime space to get swallowed up’,” Moore said.

 

“So, we may see a number of M&As pop up over the next 12 months.”

 

This comes a week after gold miners Northern Star and Saracen announced the multi billion merger.

 

The lack of big financiers meant many delegates who would normally be busy in backrooms talking deals were out on the conference floor, catching up with old friends and colleagues and discussing the state of the industry.

Skills shortage the hot topic at Diggers 2020

Moore said the skills shortage was the one big topic everyone wanted to talk about.

 

READ MORE: Hard border skills shortage will cripple investment pipeline

 

READ MORE: Calls to add geos and engineers to skilled migration list

 

“Twelve months ago we might need to call 30 people to find a short list of three candidates,” Moore said. “Now we might need to call triple that number.

 

“It’s a lot harder because there are so many companies looking for people in the same market — and we have a hard border closure that means we are restricted in trying to secure talent outside of WA.

 

Also a hot topic has become workforce planning for the next 18-24 months “If they’re going into a construction or a commissioning phase and then they’re going to start producing on “X” date, then they want to know when they need to push the button to start finding people.”

 

Mining People International has more than 25 years’ specialist experience helping mining companies find the best candidates across every job category. Find out more here or get in touch today.

Dan Hatch
Mining People International