By Anjuli Davies and Clara Ferreira-Marques
Reuters (London)
With the world’s largest miners flocking to sell assets, cost cuts across the industry and a virtual drought in buyers, private equity funds may finally be tempted into a sector long seen as potentially lucrative but risky.
Industry veterans say the coming months will be a test of whether private equity funds can turn intentions into investments and become more than niche players in an industry that has traditionally relied on public markets for cash.
“Interest from private equity in the sector is the highest I have ever seen,” one veteran industry banker said. Another senior industry adviser described a “now or never” moment despite volatility in commodity prices, citing what could be a drawn out period of low valuations in which traditional buyers — largely, other miners — are kept out by demands they refocus and cut back rather than grow.