Mergers and acquisitions have taken a hit because of coronavirus but one bright spot is mining where there has been a flurry of deals, many of them involving smaller gold producers, reports the Financial Times.

Unlike many others, the industry has been comparatively unscathed by the pandemic. Most big mines have continued to operate without interruption and China, the world’s biggest consumer of raw materials, has continued to suck in their products.

This has given executives pause to think strategically about how to position their companies for a world after the pandemic.

According to data from Refinitiv, there have been 292 deals worth a total of $11.8 billion in the metals and mining industry since March 23, when Canada’s Endeavour Mining announced plans to combine with Semafo in a $690 million deal to create the largest gold miner in west Africa.

Over the past month Anil Agarwal, the Indian metals tycoon, launched a $2 billion-plus bid to take control of natural resources group Vedanta, and Colorado-based Alacer Gold announced plans to merge with Canadian rival SSR Mining in a $1.7 billion deal.

In addition, state-owned Chinese miner Shandong Gold swooped in to acquire TMAC Resources, and Canada’s Gran Colombia Gold set out plans to buy Guyana Goldfields in an all-stock deal.

“There are definitely opportunities for M&A and consolidation,” Mark Bristow, chief executive of Barrick Gold, the world’s second-largest gold producer, told the Financial Times.

“There are a lot of deals that are going to come out of necessity. I have no doubt about that. And there will be opportunities for us. We are certainly quite busy on that front ... tracking the potential opportunities we have identified in the past.”

Spiro Youakim, head of the natural resources team at Lazard, said: “In mining and basic industries, top-line growth is limited other than through higher commodity prices. One way to potentially create growth and earnings momentum in this environment is through well thought out and judiciously priced acquisitions.”

Consolidation has been one of the key trends in the gold mining industry since Barrick announced plans to buy Randgold Resources for $6 billion in September 2018.

Analysts say there is an abundance of gold companies that lack the scale to appear on the radar of big generalist investors.

Youakim said the same logic applied to other parts of the mining industry, including industrial metals such as copper. “The fundamental drivers of M&A have not gone away, but there is a flight to safety. In a very uncertain economic environment, investors in this industry tend to prefer large companies with more resilience, more operational and financial wherewithal, more operational flexibility and a reasonably controlled but greater number of assets,” he said.

Investor preference for big companies was in evidence earlier this year when Australia’s Newcrest Mining raised $655 million from shareholders to fund a deal in Ecuador. Petropavlovsk, the Russian gold miner, has examined a potential merger with rival UGC to create a 1.1 m-ounces-a-year producer.

Richard Horrocks-Taylor, who runs the metals and mining team at Standard Chartered Bank, picked out gold and battery materials — such as copper, nickel, lithium, cobalt — as attractive hunting grounds.

Gold has been buoyed by the flight to safety, he said. Battery materials are experiencing “some weakness” because of the economic outlook but investors remain optimistic about the sector’s prospects, he said.