A recent survey conducted in Australia shows that although their mining sector is enjoying a boom, services sector is in an opposite condition. Most of the contraction <br /><br />was caused by a decline in new orders among the various players in the services sector while sales and prices also fell.<br /><br />Just 2 out of 9 sub-sectors (namely, personal and recreational services and finance and insurance) included in the survey has grown during the month. The increased <br /><br />activity in the mining sector is not positively affecting the remaining sectors of the local market.<br /><br />The chief executive of the Australian Industry Group (AI Group) said that the contraction in the services industry just shows how narrow is its base of development in the <br /><br />broad market.<br /><br />Several stability in financial states abroad in a period of few months will be favorable for allowing consumer and business confidence to improve, resulting in a gradual <br /><br />increase in spending.<br /><br />More than half of the world’s mining acquisitions in 2011 has involved projects located in US, Australia and Canada. Other buyers include China, India, Russia and <br /><br />Brazil, all of which increased their acquisitions by 42% since 2006.<br /><br />In terms of gold, the average deal is valued at USD 41 million where a premium is almost 50%. Propelling the lucrative market is Australia with 15%, United States with <br /><br />14% and Canada with 49%.<br /><br />Considering the bigger picture of the industry, PwC seems to be expecting that this year will see record M&A valuations and volumes in the mining sector worldwide. <br /><br />According to the company, sovereign wealth funds tend to have more advantage in winning transactions because of their low cost of capital.<br /><br />PwC is assuming that non-miners like sovereign wealth funds, large pension funds and private equity might reassess their approach to the industry and begin to participate more in M&A.
