X Is the golden age of mining M&A upon us? (APAC Version)

Against the backdrop of global energy transition and responding to the national resource security strategy, Chinese mining companies are actively seeking acquisition opportunities overseas, along the One Belt & One Road, particularly in Latin America, Africa, Central Asia, and Southeast Asia, where they have cultivated local connections for decades and enjoy strong diplomatic support.

 

2025 witnessed an accelerated wave of Chinese cross-border acquisitions in the mining sector, as evidenced by Baiyin Nonferrous’ USD420mn acquisition of MVV Serrote copper mine in Brazil, Zijin Mining’s USD1.2bn acquisition of Raygorodok (RG)  Gold in Kazakhstan and CMOC’s C$581mn acquisition of Lumina Gold who owns 100% of Cangrejos Gold Mine in Ecuador, as well as China Minmetals' USD500mn acquisition of a nickel asset in Brazil.

 

Chinese mining companies are increasingly confident of equity funding resources, supported by a robust operating cash flow and a big rise in stock prices thanks to a strong recovery of A-share and Hong Kong markets this year. Company valuations have surged, with Zijin Gold International's recent blockbuster Hong Kong IPO serving as a prominent indicator. On its recent debut, the stock soared by over 60%, attracting 240 times oversubscription in the public offering and achieving a market capitalization exceeding HK$300 billion. They also benefit from low interest rates in China, which give them an edge in winning competitive auctions and building greenfield projects.

 

Mining deals are notoriously complex with several formidable challenges in various areas, such as regulatory, technical and environmental. As gold and copper prices hit new highs, valuation has become a primary obstacle, with sellers demanding premium prices. Unlike in a down cycle when highly levered players are forced to divest, current sellers are more than happy to retain the asset and reap high dividends.  To bridge the valuation gap, it is now common to include contingent payments which can be linked to future commodity prices, production targets, resource upside and permit acquisition.

 

Geopolitical tensions and regulatory barriers pose even greater risks. Transactions involving critical metals face stringent scrutiny, particularly in jurisdictions like Canada and Australia. Regulatory approvals are time-consuming and can be arbitrary and unpredictable with different factors at play.

 

The rise of resource nationalism has become another significant challenge. Host countries are demanding a larger share of mine value through more free equity stakes, higher royalties, export bans on primary products and mandatory local refinery and processing.

 

Operational risks further complicate overseas projects. In some regions, terrorist incidents, illegal mining and community protests over environmental or economic concerns may severely disrupt operations.

 

China has become the go to country for fireside chats before a mining deal is launched, not only because of strong buyers’ interest and potentially high valuations but also mining capabilities and operational expertise. In the last few years, Chinese mining companies have made their mark with the fast execution of large and complex greenfield projects, e.g., Las Bambas Copper Mine in Peru, Kamoa-Kakula Copper Mine and KFM Copper-Cobalt Mine in Democratic Republic of Congo, Simandou Iron Mine in Guinea and Timok Copper-Gold Mine in Serbia. Chinese mining engineering companies have learnt from the best practice of their international peers.  They are now trying to elevate themselves to the next level by adopting more innovative measures to build more environmentally friendly and intelligent mines.

 

Given the significant pipeline of transactions in progress and continued strong commodity prices, we expect to see a number of deals close in 2026 which involve innovative structures dealing with valuation concerns and risk allocation.