Mining deals to soar, says PwC

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PwC mining specialist Tim Goldsmith today said such deals hit a record $158.9 billion (£79.02 billion) in 2007 and may reach "astronomical levels" this year.

"No company can stand aside in this 'eat or be eaten' environment," Goldsmith said. "The biggest companies are positioning themselves to achieve super-consolidated global scale."

The biggest deal on the table at present is the $146 billion hostile offer for Rio Tinto from BHP Billiton. That would be the largest-ever mining merger but it faces an uncertain future, with Rio claiming it undervalues its prospects.

London-listed Xstrata is reported to be back in talks with Brazil's Vale on new takeover proposals. The pair have so far failed to agree on price.

PwC said the value of mergers and acquisitions in the industry rose 18% in 2007 and the number of deals surged 69% to 173.

It added that mining-asset purchases by Chinese and Russian companies increased by 600% to $32.7 billion in 2007.