Record metal prices and a drive to corner international markets have spurred mining groups into a frenzy of mega-mergers.
The latest to date was an offer of US$33 billion (NT$1.09 trillion) a week ago by US aluminum group Alcoa Inc for Canadian rival Alcan Inc in a bid to become the world's biggest aluminum group ahead of Rusal, a Russian and Swiss-owned company.
Rusal was formed in a March merger of Russia's Rusal and Sual with Switzerland's Glencore.
Alcoa is also looking over its shoulder, however, as the sector consolidates and Chinese groups gain ground.
On Wednesday, global stock markets were swept by rumors of a takeover bid for No. 3 mining group Rio Tinto Plc by leader BHP Billiton Ltd, both of which are Anglo-Australian companies.
A deal could mark the third biggest takeover of all time, following those of AOL by Time Warner Inc and Mannesmann AG by Vodafone Group Plc.
"Companies are confident that prices are going to stay high and if the prices stay high, the profits will be high and they can pay back the debt quite quickly," Societe Generale analyst Stephen Briggs said.
"It is in the interest of companies to create oligopolies because oligopolies charge higher prices and companies that are member of oligopolies are more profitable and more competitive," he said.
Oligopolies are formed by a small group of producers or sellers who engage in limited competition.
At France's Paris-Dauphine University, raw materials specialist Philippe Chalmin said: "Companies have lots of money, which makes them potential prey."
Robust global expansion has boosted demand from emerging economies and, with limited stocks available, has pushed metal prices to record highs.
The cost of nickel, which is used to produce stainless steel, has tripled in the past year to more than US$50,000 per tonne.
The resulting pursuit of record profits has also provoked an unprecedented consolidation of metal sector.
Late last year, Brazil's CVRD snapped up Inco Ltd of Canada for US$13.3 billion to become the second biggest mining group in the world.
That deal was finalized just a few months after Swiss group Xstrata Plc bought Falconbridge Ltd at the end of a hard-fought stock market battle with Inco.
Earlier this month, the Russian mining group Norilsk Nickel joined the race for Canadian nickel producer LionOre Mining International Ltd, bidding almost US$5 billion to upstage a March bid by Xstrata.
Meanwhile, the prices of copper, lead, tin and zinc have neared record highs as well, inciting major actors in those sectors to jockey for position.
US group Freeport McMoRan Copper & Gold Inc in November announced the purchase of the US' Phelps Dodge Corp for US$25.9 billion, a move that would create the biggest US mining group and the world's leading listed copper company.
In December, Zinifex of Australia and the Belgian company Umicore announced their own tie-up to become the leader in zinc.
Gold, the price of which is expected to keep climbing this year, is shining as well.
In August, the Canadian company Goldcorp Inc got its hands on Glamis Gold Ltd of the US for US$8.6 billion and became one of the sector's leaders.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to
RSS