Stockpickers glum about the possibility of a recession have one thing to perk them up - the hope that more cashed-up companies would be able to pick up bargains.
Analysts reckon that if a recession were to hit and dampen demand for commodities and listed miners’ valuations - BHP’s the one that could use its huge firepower to pounce. The company isn’t facing any existential threats, but there’s only so far that any dividends, buybacks or organic growth can go.The question, for BHP’s camp, is two-pronged: which commodities does it most want in its empire, and does it want that exposure to be a large producer or a punt on early-stage explorers.
But it also sat out on nickel producer Western Areas, despite its Nickel West operations which take ore from Western Areas and others in the region. While BHP used to think lithium was a pond too small for big fish, the market has grown substantially. Closer to home, one name that crops up is copper miner OZ Minerals. The Oz bulls reckon it could stack up as an MA target at lower copper prices, and fit well with Olympic Dam. But others think BHP’s likely to look overseas for copper, given the dearth of big deposit discoveries in Australia and BHP’s preference for long mine lives.
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