ACG Metals hunts copper deals to build Western supply

ACG Metals (LON: ACG) is pursuing up to 10 acquisitions of copper mines as the London-listed company moves to rapidly scale production and position itself as a western source of the strategic metal.

The miner is in discussions over several assets, it told Financial Times. Many of these potential acquisitions are located along the Tethyan Copper Belt, a vast mineral-rich region stretching from Europe to south-east Asia. 

ACG is targeting mines that are already producing copper or close to entering production as it looks to accelerate growth.

ACG completed its first acquisition in 2024 with the $300 million purchase of the Gediktepe gold and silver mine in western Turkey. The company plans to begin copper production at the site this year and aims to grow annual output to 300,000 tonnes through further acquisitions worldwide.

Volatile copper prices could help drive dealmaking across the mining industry. “Volatility always presents opportunities,” ACG founder, chairman and chief executive Artem Volynets said in a statement. “If the volatility in copper pricing persists, it might help with M&A.” He added that rapidly rising prices can complicate negotiations because sellers seek higher valuations, while deals are typically based on consensus price forecasts that remain about 25% to 30% below spot levels.

Long-expected shortage

Rising global demand for copper, widely used in electronics, power infrastructure and the data centres that support artificial intelligence (AI), is reshaping the mining sector and fuelling consolidation.

The push to secure supply has already driven major deal discussions, including a planned $53 billion merger between Anglo American (LON: AAL) and Teck Resources TSX: TECK.A/TECK.B) and talks over a possible combination of Rio Tinto (ASX, LON: RIO) and Glencore (LON: GLENCORE).

Concerns about future shortages have pushed copper prices above $13,000 a tonne, though Volynets expects periods of weakness along the way. “Our thesis is that copper is going up longer term, but it’s going to rise in phases,” he said, describing successive trading bands that could gradually lift prices toward the $13,000 to $15,000 range.

In the short term, however, higher energy costs and slowing economic growth could weigh on demand. “Rising energy prices could slow down the big economies of the world, China, the US and others, and that will have an impact on copper consumption,” Volynets said in a statement, noting that global inventories remain elevated.

Even so, geopolitical tensions and market disruptions are unlikely to alter the long-term outlook. “Fundamentally, a few weeks of war in Iran does not change the long-term global macro picture,” Volynets said. “That means that copper prices eventually will be higher. But in the meantime, there will be volatility.”

Strategic metals

ACG is positioning itself as a western supplier, with copper from its Turkish operations expected to be processed at European smelters. While the company may eventually expand into Africa and Latin America, it is currently focused on assets closer to its Turkish base.

Volynets said Africa is increasingly becoming a geopolitical battleground between eastern and western powers competing for control of critical mineral resources.

Operating costs in Turkey have fallen as the lira has depreciated to record lows, while parts of eastern Europe could also offer low-cost operating environments with relatively limited competition for acquisitions.

Gediktepe currently produces gold and silver, with the Turkish Central Bank the primary buyer of its gold. ACG shares have risen nearly 30% since the start of the year.

Volynets said controlling costs remains the most effective protection against commodity price swings. “Regardless of what prices are doing, the miners should be focusing on the cost of production,” he said, adding that ACG’s operations currently sit in the first quartile of the global cost curve for gold production.

The company also produces zinc and silver, though copper and gold remain its primary revenue drivers. Gold prices could remain supported by geopolitical tensions even if oil prices rise, Volynets said, adding that the metal is likely to continue benefiting from the current global political climate.