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Inmet’s Cobra Panama project in Central America.

The mining industry is in upheaval. Too many miners are writing off billions of dollars and a slew of chief executive officers is being shown the door.

But few people in the business – the miners nor their advisers – will speak bluntly about the tough territory ahead. For the most part they try not to spook shareholders, generating platitudes about focusing on current operations rather than adding acquisitions.

However Peter Bacchus, global head of metals and mining at investment bank Jefferies Group in London, is clear about the difficulties. The way he sees it, the mining game has become tougher and everyone must adapt.

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"This industry is full of stoic philosophers: people who build things, then break them up, then build them up again," he said in an interview. Many of the new CEOs, particularly at the global mining giants, are of the second variety, seeking to tear apart something someone else created. In Canada, behemoths such as ArcelorMittal and Rio Tinto have already shopped, or are in the process of shopping, stakes in their Canadian assets.

The difficulty is that the landscape "is not changing in a clearly predictable pattern," Mr. Bacchus said. Though major mergers and acquisitions are less likely, each company finds itself in a different boat. Some are reeling from striking the wrong acquisitions, while others were never able to get off the runway to begin with, so they have a hard time selling themselves to skeptical investors.

For those in the latter camp, typically small- to mid-size players that haven't even had the chance to make missteps, Mr. Bacchus said many will have to pair up with "somewhat untraditional bedfellows." If equity investors aren't willing to cough up cash, they'll need to look at sovereign funds, such as the Qataris who were invested in Xstrata, or hedge funds and private equity shops.

Private equity is getting lots of attention from miners of late, but Mr. Bacchus notes that the speculation about its presence isn't really all that new. "We've been talking about this for years, yet it's never really happened," he said, adding that it's hard to lever up a company when the underlying commodity price can be so volatile. "But I do think it's changing," he added. Some of these shops now argue certain commodities have deep embedded value, so they can invest for the long-term. Plus, many more money managers are willing to be more aggressive.

Given this new reality, you might wonder how First Quantum was recently able to scoop up Inmet Mining for $5.1-billion – a deal for which Mr. Bacchus served as an adviser for the bidder. Looking back, he said much of it came down to timing. Many of the tough issues, such as the wave of recent writedowns, didn't flare up until late in the takeover process and at that point shareholders were already open to being taken out.

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