Oz Minerals shareholders approve BHP’s offer as wave of mining buyout offers continue

April 13, 2023

Global mining companies have been active in positioning themselves to gain better access to critical minerals with three of the world’s largest miners pursuing takeovers of other companies. The recent deals being considered are Newmont’s $19.5 bid to takeover Newcrest, Glencore’s $22.5 billion pursuit of Canada’s Teck Resources and BHP Groups $6.4 billion offer for Oz Minerals.

BHP’s offer received the approval of Oz Mineral’s shareholders with 78.9 percent of proxy votes of Oz Minerals shareholders voting in favor of the takeover offer of A$26.50 cash from BHP and a A$1.75 special dividend paid to Oz Minerals investors, at a shareholder meeting in Adelaide, reported Reuters.

On April 13, Teck Resources rejected Glencore's latest offer of $8.2 billion in favor of a proposed restructuring plan to allow for an earlier full seperation of its metals and coal divisions.

“Now, pre-separation, is not the time to explore a transaction of this nature,” Teck chairman Emeritus Norman Keevil said in a statement.
Glencore’s proposal is materially unchanged and still not in the best interest of Teck, the company said.

It added a revised restructuring plan would now include a potentially shorter path to fully separate the copper and zinc business Teck Metals from the steelmaking coal Elk Valley business and reduce the minimum term of the royalty paid by to Teck Metals to three years from 5.5 years. It also put in place measures to cap annual capital spending by the coal business at $1.3 billion.

On April 11, Newmont submitted a $29.4 billion proposal for Newcrest.

The wave of buyout offers across the mining sector is fueled in part by global opposition to new mine construction and rising demand for copper, a metal key to the green energy transition as well as other commodities such as gold.

“We are entering a new era in which mining companies must hold themselves to a higher standard of sustainability and long-term value creation. This transaction would strengthen our position as the world’s leading gold company by joining two of the sector’s top senior gold producers and setting the new standard in safe, profitable and responsible mining,” Tom Palmer, President and CEO of Newmont said of Newmont’s pursuit of Newcrest.

BHP will add to its copper exposure and raise its nickel prospects with the acquisition of Oz Minerals. It will bring in Oz Minerals’ Carapateena copper mine, close to BHP’s own Olympic Dam copper mine and smelting operations in South Australia.

Strategically it will also boost BHP’s nickel supply through Oz Minerals’ West Musgrave nickel project in Western Australia, where BHP is already producing nickel sulphate at its Nickel West operations. Its customers include Tesla.

The final regulatory hurdle is approval from the Federal Court of Australia, which is slated to rule on Monday, April 17. If the deal is approved as expected, Oz Minerals shares will be suspended on April 18.

Oz Minerals’ board had unanimously supported the bid.

Teck rejected the initial offer from Glencore twice and said its plan to spin off its steel-making coal unit to focus on copper and other industrial metals was the only viable option for the Vancouver-based company.

Glencore modified the bid to include a cash component, although Teck’s board responded by describing it as “largely unchanged.”
Photo: Oz Minerals Carrapateena Mine



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