Global coal M&A 2024: divergence in deal making

During 2023, there was a revival in deal making in coal industry driven by heightened concerns over the security of supply. A number of steel producers made strategic investments in met coal to secure long-term coal contracts and hedge against future price volatility. Meanwhile, diversified miners seeking to improve their ESG profiles by divesting coal assets have provided oppourtunities for pure play coal miners to expand and diversify into met coal. Deal-making in thermal coal remains subdued and limited to Indonesia where we see a small pool of buyers mostly seeking cost rationalisation through scale and synergies as well as shifting product mixes towards high-energy coal. Substantial cash generation over past 3 years has largely been used to improve balance sheets. Major industry players have US$ 14.3 bn in cash which could be redeployed back to opportunistic M&A.