Private equity mining deals to rise: S&P Global

Private equity deals in the mining sector are expected to grow as demand for minerals essential to the global energy transition continues to rise, S&P Global says in a new report.

According to the New York-based analytics firm, global output of most battery metals has been declining due to weak prices, highlighting the need for new investments to grow the supply. Only lithium has seen an increase in production, reaching the highest level on record in the fourth quarter of 2024, S&P data show.

“A lot of new mines are needed to be built and that will require a lot of capital,” Martin Valdes, head of private equity strategy at Denver-based Resource Capital Funds, told S&P. “Private equity will play an important role alongside the public markets in fulfilling that additional supply.

“It’s not energy transition only anymore — it’s also decarbonization, electrification and penetration of electric vehicles,” Valdes emphasized.

First-quarter deals

During the first three months of 2025, private equity and venture capital-backed investments in mining totalled $152.8 million (C$211 million), according to S&P.

 

While this is only a small fraction of the $4.35 billion recorded in the same period last year, the 2024 figure was heavily inflated by one transaction: a $4.14-billion funding to Sweden’s Stegra, formerly H2 Green Steel. Subtracting that, the first-quarter totals would represent an approximate $57-million or 27% decline on 2024.

Europe accounted for most of the first quarter private equity deals with $124.5 million. Asia-Pacific came in second with $28.3 million, S&P data show. The biggest deal was a $64.7-million round of funding for French steel company GravitHy. The next largest was a $52-million investment into Finland-based mining company Terrafame Oy.

Potential headwinds

Despite the bullish sentiment, S&P highlighted the uncertain direction of geopolitical trade tensions and their impact on the mining sector as potential headwinds for investment.

The U.S., in particular, has put its economic rival China under scrutiny. The Trump administration recently initiated an investigation into imports of processed critical minerals as it seeks to address the country’s supply chain vulnerabilities and to reduce dependence on China.

“The trade tensions put metals in a specific position,” Antti Grönlund, managing director for private equity at London-based Appian Capital Advisory, told S&P. “It’s becoming that critical for nations who want to manufacture and who need these commodities.”