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BHP, the world’s biggest miner, and Canada’s Lundin have agreed to acquire South American copper miner Filo in a $3bn deal, in the latest sign of consolidation in the global mining sector.
BHP has been on the hunt for copper assets after it walked away from a £39bn offer for Anglo American in May. That takeover attempt was primarily driven by the Australian company’s desire to acquire the London-listed miner’s copper assets in South America as the metal’s price boomed.
The Filo deal means BHP and Lundin will take full control of the Filo del Sol prospect, which straddles the Argentine and Chilean border near the copper-rich Atacama Desert. BHP had an existing 5 per cent stake in Filo, acquired in 2022, while Lundin had 32 per cent.
The two companies will form a 50-50 joint venture into which Lundin will also incorporate its Josemaria project located about 10km from Filo del Sol, opening up cost benefits for bringing the two prospects into one business. BHP will pay a larger share — $2.1bn — as part of the Filo deal to reflect inclusion of the Josemaria assets.
Mike Henry, chief executive of BHP, said in a statement: “This transaction aligns with BHP’s strategy to acquire attractive early-stage copper projects and enter into strategic partnerships with parties where complementary skills and experience can deliver long-term economic and social value.”
Henry, who is Canadian, said investment in Australia’s Vicuña region would open up the area’s potential to become a major contributor to the country’s economy for decades.
The offer for Filo, which is listed in Canada, was pitched at a 32 per cent premium to the company’s share price over the past month.
The deal fits with BHP’s move to focus its once sprawling asset portfolio on commodities that it believes are “future-facing”, including copper and potash. It acquired Oz Minerals in South Australia, a $6.4bn takeover it closed in 2023, to bolster its copper potential in that region before launching its unsuccessful bid for Anglo American.
That bid came against a backdrop of a spike in the copper price to an all-time high to highlight a predicted disparity between supply and demand for copper in the future, as the amount of metal needed for the energy transition and electric vehicles has grown. That has increased the value of existing copper assets and advanced projects and spurred talk of consolidation in the global mining sector.
BHP shares fell 1 per cent after the deal was announced due to overall weakness in mining stocks, driven by a large sell-off in iron ore company Fortescue’s stock on the Australian markets.
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