http://www.miningweekly.com/article/inward-outward-mining-ma-transacting-under-way-ernst-young-2010-03-24

They are looking all over to find good Junior Company like Spider. Read this:

JOHANNESBURG (miningweekly.com) – Both inward and outward merger and acquisition (M&A) transacting involving both local and foreign mining companies is currently under way in South Africa, Ernst & Young mining and metals leader Adrian Macartney informs Mining Weekly Online .

Macartney, who also heads Ernst & Young's Africa transaction advisory practice, reports that foreign mining companies are currently transacting to acquire South African mining companies in inbound transactions, and South African mining companies are looking to acquire new orebodies in outward transactions.

While the mining industry last year focused largely on improving operating efficiencies and rationalising capital to meet capital expenditure requirements, Macartney reports that the last few months have seen an improvement in liquidity with banks being able to offer some funding.

Simultaneously, the rise in commodity prices and better company cost management has resulted in bigger operating cash flows.

While gold companies are still on the lookout for M&A opportunities, there could be rationalisation in some other commodities .

Anglo American will continue to dispose of some of its assets, not only in South Africa, but globally, in order to be able to focus on what it does best.

"That's not inconsistent with what we are hearing around the world from a lot of company executives," he adds.

Ernst & Young is working on several transactions for Chinese companies, with Chinese companies continuing to be acquisitive across a range of commodities .

"I am bringing one of our senior managers of our Beijing office to our Johannesburg office to work with Chinese clients the continent," Macartney tells Mining Weekly Online in a video interview.

While some deals that were put on hold because of the global economic meltdown are being resuscitated, Ernst & Young is witnessing a number of new players coming into the market from different sources.

Ernst & Young transaction advisory director Sifiso Shongwe says that emerging markets, especially in Africa will play an increasingly significant role.

Shongwe says that some believe that the recovery in emerging markets may be of the best-case V shape, but whether or not the recovery is V shaped or whether there is a double dip, Africa is well placed because of being less exposed than the other emerging markets.

While high returns can be obtained in China, Shongwe says that companies with a long-term focus cannot afford to ignore Africa, where there is a growing middle class.

Most of the 500 executives Ernst & Young surveyed estimate that the economic downturn will persist for at least another year.

Looking forward, the survey finds that the M&A outlook for 2010 is improving, both locally and internationally, although sellers remain cautious.

Some analysts see this week's FNX Mining and Quadra Mining $1,5-billion stock swop merger in Canada as possibly signalling the beginning of another wave of mergers in the global mining industry, four years after the buyouts of Canadian companies like Inco, Falconbridge and Alcan .

With the costs of building new mines prohibitively high, and commodity prices rising again because of growth in Asian demand, many companies are seeking mergers or takeovers to cash in on growth opportunities .

Some say that BHP Billiton, Rio Tinto, Vale and Xstrata are all again eyeing each other, and smaller companies are looking for possible deals .

Xstrata is known to be keen on the zinc assets that Anglo American is selling and some analysts suggest that Xstrata may use Anglo's zinc disposal as an opportunity to resuscitate its merger of equals proposal.