Grant Thornton report expects increased M&A activity for mining contractors

Press release

Grant Thornton report expects increased M&A activity for mining contractors

06 Nov 2025

Grant Thornton published its first report ‘Balancing risk and opportunity in contract mining', unpacking emerging trends, market dynamics, and new contract models impact the industry.

Mining contractors play a crucial role in the mining industry, supplying capital, labour, equipment, and expertise to operate mines safely and efficiently. Their responsibilities extend to risk management, cost control, and supplier coordination. Many are diversifying into civil construction and mineral processing, while also supporting responsible resource development through land rehabilitation, Indigenous engagement, and regional economic contributions. 

Will Kendall, Corporate Development Advisor – Mining at Grant Thornton Australia said: “The industry is performing well with solid trading results in recent years allowing debt reductions to build stronger balance sheets. Contractor activity in the coal sector is expected to remain tough however, until coal market improves and this will see diversification into other commodities as a strategic necessity. The stronger balance sheets should encourage M&A activity which has been a feature of the industry in the past, and we also see international entrants playing a bigger role.”  

Grant Thornton’s report identified key trends affecting mining contractors, including:  

1. Financial resilience and growth

Despite margin pressures, according to the Grant Thornton report, contractors have improved capital efficiency, reduced leverage, and increased return on equity (ROE), positioning themselves for renewed M&A activity and strategic investments. Additionally, surplus cash flows have enabled deleveraging and enhanced resilience and ROE has continued to rise, reflecting disciplined capital allocation.  

2. A new contract model for mining partnerships

Innovative profit-sharing and joint venture-style contracts are emerging, particularly in gold mining. Contractors are now contributing capital for mine establishment in exchange for a share of future profits or equity, aligning their interests with mine owners. Further, this type of model is positioned to expand beyond gold, and could soon be applied to other commodities and underground operations.  

3. The globalisation of Australian mining services

The report details new international entrants, including North American, Indonesian, and Chinese-backed companies, increasing competition and driving consolidation. Recent acquisitions include companies such as North American Construction Group and Buma International, while Indonesian firms are establishing a presence in Australia and bidding for major mining assets. Going forward, M&A activity is expected to accelerate, with a focus on distressed asset acquisitions, particularly in coal, offering deep value opportunities, Capital-light vertical integrations, focused on civil infrastructure and mineral processing and bolt-on acquisitions of adjacent businesses to, enhance capabilities and grow revenue.  

Mining contractors are heading into 2026 facing both significant opportunities and considerable challenges. Competitive landscapes are changing, with shifts in commodity markets, more M&A activity expected, and international entrants redefining the sector.  

Experts / Authors

Carla van den Hoorn

Communications Manager at Grant Thornton Australia