By Nick Toscano
Mining giant BHP is a step closer to sealing its biggest acquisition in more than a decade after shareholders of Australian copper producer Oz Minerals endorsed a $9.6 billion takeover offer.
More than 88 per cent of shareholders voting themselves or via proxy at an Oz Minerals shareholder meeting in Adelaide on Thursday supported BHP’s bid to buy the company for $26.50 a share plus a $1.75 special dividend.
Oz Minerals has two copper and gold mines in South Australia – Carrapateena and Prominent Hill – located on either side of BHP’s vast Olympic Dam mining hub.Credit: Aaron Bunch
The scheme now needs the approval of the Federal Court of Australia, which is expected to make a ruling on April 17. If it is approved by the court, the scheme is expected to become effective on April 18 and be implemented on May 2.
“This is a strong endorsement from OZ Minerals shareholders on the value they will receive under the scheme and the hard work of the OZ Minerals team over many years to create a successful business,” BHP chief executive Mike Henry said.
BHP, the largest Australian mining company, has been looking to acquire Oz Minerals as part of its accelerating efforts to boost its supplies of copper and nickel, two minerals the world will need much more of in coming years as raw materials in electric vehicles and clean energy infrastructure. Electric cars require up to four times as much copper as internal combustion-engine vehicles, says BHP, while nickel is a critical ingredient in lithium-ion batteries.
If the deal succeeds, it will mark the Melbourne-based mining heavyweight’s biggest acquisition since it paid $US12 billion ($18 billion) for US shale gas producer Petrohawk in 2011.
Oz Minerals has two copper and gold mines in South Australia – Carrapateena and Prominent Hill – located on either side of BHP’s vast Olympic Dam mining hub.
BHP believes it can unlock significant potential cost savings by combining those assets.
Oz Minerals also has plans to build a new nickel and copper mine at West Musgrave in Western Australia, which could add to BHP’s expansive nickel position in the state.
Speaking after Thursday’s meeting in Adelaide, Oz Minerals chairman Rebecca McGrath and managing director Andrew Cole said investors’ strong endorsement would enable the “next chapter for Oz Minerals”.
“Pending endorsement of the court, we will become part of a major global mining company which values our strategy of creating value for stakeholders, enabled by our agile culture of inclusion, innovation and collaboration, as well as our portfolio of modern minerals operating assets and our pipeline of growth opportunities,” they said.
“We thank all our stakeholders for their contribution over the years.”
The bulk of BHP’s earnings still come from the steel-making ingredients of iron ore and coking coal, which are combined in blast furnaces to churn out liquid metal at steel mills across the globe.
Copper presently accounts for about 20 per cent of BHP’s underlying earnings, while iron ore makes up more than 50 per cent.
However, based on long-term price forecasts, copper could make up more than 40 per cent of earnings by 2030, according to analysts. “This would support the strategy to have about 50 per cent of the portfolio, longer term, made up from copper, nickel and potash,” investment bank JPMorgan said.
Since 2021, BHP has been selling stakes in several coal mines and has offloaded its entire global oil and gas division, partly to free up its ability to spend more on what it terms “future-facing” commodities, including nickel and copper.
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