Miners may face more unsolicited bids

LONDON (Reuters) - Mining companies may face more unsolicited, potentially opportunistic takeover bids in 2009, as private equity and venture capital firms take advantage of the sector's decline, Ernst & Young said on Tuesday.

The Mining eye, Ernst & Young's index of the top 20 mining companies on AIM by market value, continued to decline, dropping 46 pct in the fourth quarter from the preceding quarter and slumping 75 percent over 2008.

The index fell from record highs earlier in the year as metal prices and confidence in the mining industry collapsed.

The number of companies delisting from AIM is likely to rise, while those unable to secure funding or attract investment from alternative sources will face administration, the report said.

It noted that gold producers and explorers may be able to raise capital due to the relative stability of the gold price.

Gold climbed 5 percent in 2008, while prices for base metals and diamonds fell as demand dropped.

In 2008, 21 mining companies delisted from AIM. A further five companies are looking into delisting in the near future, according to Ernst & Young.

(Reporting by Julie Crust; editing by Guy Dresser)