Seeking a new breed of M&A leader in Mining & Metals

Dealmaking in the mining and metals industry is on the rise as the energy transition leads larger organisations to expand asset portfolios, with an eye on future demand.

Across the market, analysts and industry professionals are predicting this trend will continue to accelerate as leaders prepare the ground for a new wave of consolidation.

Whether gold, base metals or minerals, it is a two-way process. Major mining companies are seeking assets to support next generation energy production, while the juniors are looking for backing to support growth.

Areas of particular focus include the fact there is an expected copper supply crunch alongside major increases in demand for cobalt and nickel. This is expected to impact energy transition, causing potential Net Zero headaches across the globe.

According to a Global Data Report in February, the energy transition was the key driver behind a quarter (25%) of the top 20 M&A deals in mining in 2022 – a move that is expected to increase.

And, despite the economy’s continued uncertain position, insights such as this reveal a direct response to consumer and shareholder demand for portfolio diversification into sustainability.

These market forces are significant pointers toward the next decade’s challenges in moving to cleaner and battery energy – and beg the question, who are the right people to lead the charge on M&A with an ESG and planet-first perspective?

What makes a great M&A leader?

Markets may rise and fall, and every organisation is unique, but the essence of exceptional M&A management remains constant – it is all about integration.

EY took this a step further in a 2020 report and called great M&A specialists ‘Integration Leaders’. The term could not be more applicable in the mining and metals world right now, as established businesses must quickly onboard assets with their own cultures, people, and vision.

However, the vision is still not completely clear. There is a certain level of clairvoyancy that will be needed by boards to understand how the future will roll out in continued uncertain times.

With the technical experience needed in the sector, combined with an understanding of the impact of geopolitical and climate issues, this new breed of M&A leader must come armed with a variety of tools aimed at not just immediate integration but long-term success for planet, people, and profit.

And profit here cannot be underestimated as coming into Q3, the build on gains in the first half of 2023 remain below valuations compared with this time last year. Some of these losses even being accredited to the very fact M&A fever has gripped the sector.

How to get ahead in the race for talent

Along with this higher level of dealmaking, talent moves within mining and metals have also seen eventful times.

Boards are faced with a relentless task of finding quick solutions for rising low-carbon energy demand and miners and producers have searched for attractive acquisition targets create capacity, enhance value chains, and diversify.

Just as commodity prices rise and fall, so has the talent undulated cross-sector and cross-territory.

Due to the nature of these dynamics, and more, there is also a continued rise in need for specialist expertise as many of the assets are in various locations, with different regulatory and cultural factors.

Nothing new there for the mining and metals community, you may say.

However, this is a reformed and agile M&A environment at the highest peak the sector has seen in years. This requires people who have not just acquired significant expertise in core areas but who can also address the rapidly transforming technological and ESG landscape.

To adapt to these changes moves, leading businesses are now ever-more open to reviewing skill sets and experience in diverse ways. This is particularly important from an EDI perspective as all organisations, without exception, seek talent from wide ranging communities and backgrounds.

With so much complexity and competition, the next 24 months are set to be pivotal not for only for individual companies – and indeed leaders – but for the sector and, as a result, society.

Companies seeking to find the best possible talent for their M&A journey are well advised to consider these top three criteria:

• Multiple, complex stakeholder management: the hearts and minds of the organisation must be brought on the journey. With cross-border issues and immature assets being turned around, leaders must be able to bring areas on board simultaneously and seamlessly
• Global finance wisdom: all M&A leaders must bring their finance A-game, but with markets continuing to be in a state of flux with ongoing uncertainty at a level we have not seen since the 2008 crash, keeping heads above water is not enough; robust legal, regulation and risk knowledge is paramount
• Supply chain savvy: creating open gateways to innovation and insight into the supply chain problems gripping all industry is showing up as a major aspect of M&A requirements. This looks set to only increase as the balance between local and global supply radically fluctuates across industry

An enduring legacy

As the M&A landscape continues to move apace in the mining and metals sector, there is a feeling that we are standing on the frontline of history. The impact of decisions being made at the heart of these organisations cannot be underestimated.

If the last two decades has taught us anything it is that adaptability is key to success. Remaining agile in the face constant change, ironically, provides the necessary stability to balance on the fine line of value not just to shareholders but to human progress itself.

At the heart of this are the people placed in positions of influencing this change and, with experience in the five practices of Mining & Metals, Real Estate, Energy & Infrastructure, Industrial Technology and Supply Chain, Granger Reis stands at the forefront of supporting progressive changemakers creating the necessary transformation.

It is hard to think of a time before where mining has been so open to other areas of industry and so intertwined with a global agenda that puts the stakes at the highest existential levels.

One thing is for certain, the people who lead on these major integration projects will indeed have an enduring legacy – finding them will be ours.