By Nick Toscano
Australian copper miner Oz Minerals is weighing a potential new takeover deal after rebuffing an earlier $8.4 billion offer from mining giant BHP.
Shares in Oz Minerals went into a trading halt on Wednesday after rising more than 8 per cent this month. The Adelaide-based miner said its shares would remain paused until Friday or pending an announcement about a “change of control” transaction.
BHP’s Olympic Dam copper, gold, silver and uranium mine in South Australia.
The news comes after BHP lobbed a $25-a-share bid to buy Oz Minerals in August, representing a 32.1 per cent premium to its previous closing price. However, Oz Minerals swiftly rebuffed that offer. It is not known if the new potential takeover involves BHP, which declined to comment on Wednesday.
Oz Minerals chief executive Andrew Cole said at the time that BHP’s offer was “highly opportunistic” because it had been made when the price of copper and Oz Minerals’ stock value had slipped from their recent peaks.
BHP’s push to acquire Oz Minerals is the latest sign of the global mining heavyweights’ efforts to secure greater supplies of commodities, such as copper and nickel, which will be increasingly needed to power the clean energy transition. Copper is a crucial ingredient in electric wiring, while nickel is critical to the production of lithium-ion batteries.
Rio Tinto, the nation’s second-largest miner, is also flexing its muscles in the space, pushing through with a $US3.3 billion ($4.9 billion) deal to take full control of Turquoise Hill Resources to lift its exposure to the Oyu Tolgoi copper and gold mine in Mongolia.
Adelaide-based Oz Minerals has two copper and gold mines in South Australia, located either side of BHP’s vast Olympic Dam mining hub and could drive significant cost savings.
In September, Oz Minerals gave the go-ahead to the $1.7 billion West Musgrave copper and nickel project in Western Australia.
After BHP offloaded its oil and gas business and stakes in several coal mines last year, investors and analysts have noted the company appears increasingly eager to execute its strategic shift from fossil fuels into more of what the industry terms “future-facing” commodities, including copper and nickel.
However, BHP chief executive Mike Henry has insisted his team would remain disciplined in its pursuit of Oz Minerals, even after BHP reported another year of bumper profits and strong cash flow. Following the rejection of BHP’s initial offer, Henry said he believed the $25-a-share bid was “fair and compelling” and was disappointed with the Oz Minerals board’s decision
He said Oz Minerals would be “nice to have” but was not essential to BHP’s copper and nickel growth strategy as it had significant internal options to expand its existing resources.
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