Coal and iron dominated 2017 mining takeovers, show data released earlier this week, with buyers favoring the polluting energy maker they are familiar with over uncertainties of a future that is battery powered.
While the largest of all deals took place in Brazil, China is the top player despite its plans to lower steel-making and domestic coal to fight the huge problem with smog across its cities.
Miners in other locations haunted by the huge overpriced purchases made prior to the crash in 2015 of commodities, hesitated on making deals that involved metals that are needed to operate electric vehicles.
Mining deals reached $96.8 billion, based upon 2,109 for the most part modest-sized transactions over the last year. That marked an increase of 10% in value compared to 2016, but came up well short of the total of between $150 and $200 billion in its boom years, but those were followed by miners needing to write of billions of dollars in value to their assets.
Over $92 billion of the total in 2017 was spent on iron ore, steel and coal deals as investors remained loyal to the sector that is still generating profits even though there exists a drive worldwide to lower pollution.
Analysts have predicted there is going to be a continued demand, even though coal is the largest source of carbon emission that the Paris Agreement of 2015 has a goal of curbing.
Steel-making, which uses coking coal and iron ore, represents about 7% of the industrial CO2 emissions, showed figures from the industry.
For members of the mining sector, minerals offer them an established manner in which to make money when interests that are very low mean very inexpensive funding can be found to purchase new assets.
Buyers are aware that emerging markets such as India and China will keep relying on coal for many years into the future.
Demand from the huge and expanding economies will counter a trend to shift away from use of fossil fuels.
The sovereign wealth fund of Norway proposed dropping gas and oil companies from its index while on Friday Britain said it would establish an emissions index on its coal-fired power stations starting in 2025, which will force closure of them unless they have carbon capture technology in place.
In China, Beijing is pushing to put a limit on coal consumption. Coal is used in the production of most of China’s electricity.