Mining Minutes | M&A Fireworks; Macro Setup Turns

Research evidence excerpt

Mining Minutes | M&A Fireworks; Macro Setup Turns

Global | Metals & Mining EquityJulyResearch4, 2026

Mining Minutes | M&A Fireworks; Macro Setup The combination of an improving US

industrial economy — which should be aTurns positive for global demand for copper and

This past week included the sixth consecutive strong ISM report, a weak US other base metals — and early indications of

declining inflation should be positive for the

employment report, a decline in the price of oil to prewar levels, and less hawkish Metals & Mining sector.

comments from Fed Chairman Warsh. This could be a setup for a strengthening

industrial economy and declining inflation, which would be a positive scenario Chart of the Week: US ISM Manufacturing PMI

for metals and mining equities. M&A was a factor this past week as well. (SA)

Perhaps the recent correction is over? Copper is still best, in our view. 5554

The Benefits of Consolidation: M&A in the Metals & Mining sector can lead to larger companies 5150

with better access to capital. Lower WACCs should ultimately imply higher equity valuations. Of 4948

course, it is important that deals are strategically and operationally sensible with real synergies, 4746

but we would expect industry consolidation to be an ongoing theme in the sector as a means of 45

driving share prices higher in the long term. The Alcoa-South32 deal from this past week is the latest .Source: Bloomberg

significant deal in the sector, but we expect other, much larger deals over the course of this cycle.

Chart of the Week #2: Monthly Change in US

Our research on the Alcoa/South32 transaction, which was our primary focus this past week, can be Nonfarm Payrolls ('000 jobs)

found below. 800700