According to the Wall Street Journal, amid the slump of metal prices, long term investors like pension funds, and private equity Institutions are looking to cheap mining assets from Australia to Canada.
"The slide in the price of iron ore and other commodities has hammered mining companies’ share prices, forcing many to shed assets and opening the door to other investors, including big institutions and private-equity firms with no mining experience but with time to wait for prices to rise.
Canada’s two largest pension funds—CPP Investment Board and Caisse de depot et placement du Quebec—are each seeking possible partners for separate bids for Rio Tinto PLC's 59% stake in Iron Ore Co. of Canada, valued at about $4 billion, people familiar with the matter said last week".
"And last month, Japanese trading companies Itochu Corp. and Mitsui & Co. agreed to buy stakes in BHP Billiton Ltd's Jimblebar iron-ore mine in Australia for a total of around US$1.5 billion. Itochu agreed to purchase an 8% stake in the mine for around US$800 million, while Mitsui agreed to pay around US$700 million for a 7% stake".
"Pension funds, known for investment horizons of 20 to 30 years, can wait for prices to rise and the sector to turn around, said Kelly Teoh, a strategist with IG in Singapore. “People are talking about the commodity super-cycle being over, but commodities will always have a place in society because, if you look at global population growth, we are reaching unprecedented levels”
"The slide in the price of iron ore and other commodities has hammered mining companies’ share prices, forcing many to shed assets and opening the door to other investors, including big institutions and private-equity firms with no mining experience but with time to wait for prices to rise.
Canada’s two largest pension funds—CPP Investment Board and Caisse de depot et placement du Quebec—are each seeking possible partners for separate bids for Rio Tinto PLC's 59% stake in Iron Ore Co. of Canada, valued at about $4 billion, people familiar with the matter said last week".
"And last month, Japanese trading companies Itochu Corp. and Mitsui & Co. agreed to buy stakes in BHP Billiton Ltd's Jimblebar iron-ore mine in Australia for a total of around US$1.5 billion. Itochu agreed to purchase an 8% stake in the mine for around US$800 million, while Mitsui agreed to pay around US$700 million for a 7% stake".
"Pension funds, known for investment horizons of 20 to 30 years, can wait for prices to rise and the sector to turn around, said Kelly Teoh, a strategist with IG in Singapore. “People are talking about the commodity super-cycle being over, but commodities will always have a place in society because, if you look at global population growth, we are reaching unprecedented levels”
