Low commodity prices, depressed demand and oversupply, currency volatility and ongoing uncertainty around the pace of global economic recovery, are forcing a sustained period of distress that is rippling through the mining and metals industry. Mining companies with good assets, steady production, decent revenues and sound management are in trouble, exposed to a sharp price drop or sudden liquidity shock. This is forcing quality asset divestments and balance sheet manoeuvrings to unlock value for shareholders and reduce unsustainable debt levels. Companies are also actively seeking ways to circumvent ‘debt’ restrictions in bond and bank documents as financial covenants are blown.
Some industry commentators are calling the bottom of the cycle, others the upswing, and some suggest the market is being redefined and becoming more stable. Wherever we are in the cycle, the current environment of Iran is very interesting and particularly for buyers – activist investors, distress players, private equity firms and hybrid investment vehicles–with the biggest gains to be made by those bringing capital, expertise and long term interest to the industry.
Our metals and mining experts work exclusively on deals in the mining and metals industry and have done for decades, at White & Case and in-house at major, mid-cap and junior mining companies. We understand the twists and turns of the sector. We know and track those involved, the assets, the market trends and commodity fundamentals. And we understand the technical side of the business, the underlying chemistry and geology and how mining works operationally, from pit-to-port.