Allens Predicts Increased Lithium M&A Activity in the Coming Year
The lithium sector has been buzzing with multi-billion dollar M&A deals in 2024. According to Allens, a research firm, more action is expected in 2025. Despite some pricing challenges this year, the recent M&A deals indicate that long-term demand for lithium is on the rise. The clean energy sector’s expansion and global energy transition are key drivers of this growth.
Although the number of critical minerals M&A deals in 2024 has been lower compared to 2023, the total deal value has significantly increased to over $14.8 billion. Lithium is leading the charge with the highest number of deals and total deal value in recent years, totaling $24 billion from 2020-24. Some notable deals include major players like Albermarle, Allkem, Livent, Rio Tinto, SQM, and Hancock Prospecting making big moves in the market.
While the sky-high lithium prices of the past may not return soon, the structural demand for critical minerals driven by the global energy transition remains robust. Allens predicts that those who weather the current pricing storm will be in a good position for future market growth.
Looking ahead to 2025, Allens foresees a rebound in M&A activity. Interest rate cuts in the US, Europe, and potentially Australia, along with a potential price recovery for critical minerals, create an optimistic outlook for the market. Expectations are for an increase in government involvement in the sector and more funding opportunities for explorers and developers with promising assets.
In addition to lithium, the copper market is also attracting significant M&A interest, driven by long-term supply deficits and exploration expenditures.
Small and mid-cap companies are expected to drive consolidation in the sector by filling funding gaps. Dual listings and joint ventures are also on the rise, as more companies look to access capital and collaborate on development projects. Creative joint development options are likely to be a focus for many in the sector in the coming year.
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