Wake-up call: The rebuilding of ONE BHP Billiton smelter furnace in Western Australia is enough to push nickel prices into the stratosphere (this, just out today). And Bloomberg data show the value of announced mining takeovers more than tripled to $199 billion in the first five months of this year from 2007, despite the fact the global pace of M&A dropped 37 percent. Wanna’ hear more? Of course you do.

Metals are the new green on Wall Street, as mining has displaced financial services to become the biggest source of mergers and acquisitions.

The value of announced mining takeovers more than tripled to $199 billion in the first five months of 2008 from a year ago, even as the global pace of M&A dropped 37 percent, data compiled by Bloomberg show. Financial-services companies, the largest driver of merger fees for the past two years, disclosed $173.5 billion of transactions in the first five months. It's the first time mining mergers have topped the M&A table since Bloomberg began compiling the data in 1998.

"We have moved into the age of commodities," said Carl Hughes, a London-based partner at Deloitte & Touche LLP, who oversees the firm's energy and resources practice. "You clearly have a large number of mining companies just generating cash and profit like there is no tomorrow."

A $100 billion deal is "imminently possible," said Shaun Treacy, who runs Lehman Brothers Holdings Inc.'s global metals and mining group from London. That would be in addition to BHP Billiton Ltd.'s $147 billion unsolicited bid this year for Rio Tinto Group in the world's largest mining transaction.

"The race is on for valuable, high quality, scarce resources," said Treacy, 41. "Rumors are circulating about various transactions, as there continues to be significant appetite."

Potential Targets

The increase in takeovers is occurring as companies compete for scarce minerals assets and as rising costs make it cheaper to buy rivals than to develop new mines.

"I wouldn't be surprised to see mega-deals in the next six months, whether it is $20 billion or $50 billion and up," said Tim Goldsmith, 45, a partner at PricewaterhouseCooper's mining practice in Melbourne. "There is a global desire to grab whatever resources are available because they are in short supply. There are good times ahead."

Freeport-McMoRan Copper & Gold Inc., the world's second- largest copper producer, Alcoa Inc., the third-biggest aluminum producer, and Grupo Mexico SAB's Southern Copper Corp. are possible acquisition targets, bankers said. The companies have a combined market value of about $112 billion. Officials at all three companies declined to comment.

Cia. Vale do Rio Doce, the Brazilian iron-ore producer that scrapped a takeover bid for Xstrata Plc, said June 10 that it may sell as much as $15 billion of shares to pursue takeovers.

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