Fresh from a $210 million deal to buy an Australian copper mine, Melbourne-based private equity group EMR Capital is on the hunt for further acquisitions, possibly in Australia or Asia, of high-demand commodities assets, its chief executive said.
“A lot of people are chasing copper and our view is positive, short, mid and long term,” EMR CEO Jason Chang said in a telephone interview on Friday. “But we also like gold, potash and coking coal.”
Chang was speaking after EMR announced the purchase of the Golden Grove copper mine from China’s MMG Ltd, the seventh since the company was formed in 2011 and the first under EMR’s second fund, which raised $860 million in November.
Copper is among a group of commodities where prices have surged amid growing scarcity and widespread use. For EMR, the purchase provides greater exposure to a commodity earmarked as most-promising by sector giants such as BHP Billiton and Rio Tinto.
Besides copper, Golden Grove also yields zinc, lead and precious metals.
The next purchase could occur anywhere in the world, Chang said, “although we obviously like Australia and Asia”.
EMR’s initial fund raised $450 million and made investments in copper mines in Australia and Chile, potash in the United States and Spain, a coal mine in Britain and a gold mine in Indonesia.
Chang said there was no deadline for EMR’s next deal.
“We’re not anxious buyers, but given the environment, we think there are a few interesting things to buy out there,” he said.
After some big acquisitions earlier in 2016 – most before commodities prices took off – the pace of deals slowed to a trickle in the second half of the year.
In November Wesfarmers Ltd kicked off a sale process for two Australian coal mines worth up to $2 billion, with the help of financial advisors at UBS, but has yet to announce any suitors.
Macquarie Capital acted as financial advisor to EMR in the Golden Grove deal, while MMG hired Goldman Sachs to advise it on the transaction.