MMG sees tight focus and tapping local talent as keys to outbound M&A success
Copper miner wants to ensure all its recent acquisitions are on track before making any further deals despite attractive prices
“Making an acquisition overseas is easy, managing it is not.” That is a common saying among corporate leaders. For Andrew Michelmore, the chief executive of Beijing-backed metals miner MMG, adapting to the local culture rather than trying to change it, and employing the right local managers, are keys to success.
Chinese mining firms are facing the “new normal”, not only in the pace and the way Beijing wants economic growth to go, but also the way mining businesses are run and grown, as the commodities oversupply and price slump mean being disciplined in capacity expansion and acquisitions is essential.
“Our number one, two, three priorities are to get our Las Bambas copper project [in Peru] up and running and generating net cash,” Michelmore told the Post in an interview when asked if MMG would consider buying more mines, given that the industry downturn meant assets were much cheaper, after splashing out US$7 billion to buy the Peru project in 2014.
“We do not want to take the eye off the ball and have any hiccups there [Las Bambas]. That doesn’t mean we don’t do background work on what might be possible [for more acquisitions], but it is not our prime focus.”
