The global energy transition was the catalyst for 25% of the top 20 mergers and acquisitions (M&A) deals in the mining sector last year as the industry responded to growing calls for decarbonisation from consumers and shareholders, according to Energy Monitor’s parent company, GlobalData.

Global decarbonisation is seeing increased demand for metals like cobalt, nickel and lithium, according to the data and analytics company’s latest report, Mining Industry M&A Deals by Top Themes in 2022. The metals are essential commodities for renewable power and electric vehicle (EV) production – two fundamental components of the clean energy transition.

Brine pools at a lithium mine. (Photo by Cristobal Olivares via Getty Images)

“Mining companies are shifting their portfolios to focus more on future-facing metals,” said William Tyson, associate analyst, thematic intelligence, GlobalData, in a press statement. “The shortages of these metals and the growth in demand for EVs have prompted M&A deal activity as mining companies consolidate to fill the gap in supply. GlobalData predicts that global EV production will exceed 30 million vehicles by 2031, and mining companies will have to upscale to provide the essential metals required to produce EV batteries and meet demand.” 

The mining companies are looking to capitalise on the growing demand for EVs and the resulting price hikes for enabling metals. Government support schemes have helped stimulate EV demand, which has led to a deficit in the supply of crucial metals for battery production. Nonetheless, EV subsidies in many countries are coming to an end in the coming year. 

“Government assistance through subsidies and tax credits is heavily incentivising the development of green technologies, most notably through the Inflation Reduction Act in the US,” says Tyson. “Mining companies can benefit from producing the metals that are crucial for the development of green energy and can be rewarded through large subsidies. This has catalysed energy transition-led deal activity in the mining space.”

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