BHP, the largest Australian mining company, is accelerating its push to gain greater supplies of metals needed to power the clean energy era by reaching a $9.6 billion deal to buy copper and nickel producer Oz Minerals.
After the board of Adelaide-based Oz Minerals rejected an earlier $8.4 billion bid from BHP as far too low, renewed talks between the parties this week have led to a new deal being struck.
BHP chief Mike Henry described the deal as highly compelling for Oz Minerals shareholders and would provide “certainty at a time of macroeconomic uncertainty and market volatility”.Credit:Trevor Collens
Oz Minerals on Friday said it intended to unanimously recommend shareholders approve the $28.25-a-share share offer, representing a 49 per cent premium on its stock price before BHP’s original offer, unless it received a higher bid.
“BHP’s revised proposal is a clear reflection of Oz Minerals’ unique set of highly strategic, quality assets in quality jurisdictions and an enviable multi-generational growth pipeline of copper and nickel assets in strong demand due to global electrification,” Oz Minerals chief Andrew Cole said.
BHP has entered into an exclusivity deed with Oz Minerals to conduct four weeks of due diligence.
BHP chief executive Mike Henry described the deal as highly compelling for Oz Minerals shareholders and would provide “certainty at a time of macroeconomic uncertainty and market volatility”.
“The combination of BHP and Oz Minerals’ assets, skills and technical expertise provides a unique opportunity not available under separate ownership,” Henry said, citing the two companies’ complementary resources in South Australia, BHP’s strong balance sheet and capital discipline.
Adelaide-based Oz Minerals has two copper and gold mines in South Australia, located either side of BHP’s vast Olympic Dam mining hub, which 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.
BHP’s push to acquire Oz Minerals is the latest sign of the mining giant’s accelerating efforts to secure greater supplies of what Henry terms “future-facing” 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.
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