Buying OZ would be in keeping with BHP’s desire to orientate its portfolio more toward copper and nickel, but it has been disappointed with OZ’s response.
BHP has seized on a slump in copper prices to make an $8.3 billion bid for OZ Minerals which would consolidate the South Australian copper industry and reacquaint the mining giant with a $1 billion nickel project it gave away for a peppercorn price eight years ago.
“The board has unanimously determined that the indicative bid significantly undervalues OZ Minerals and as such is not in the best interests of shareholders,” said OZ in the statement.BHP chief Mike Henry hit back immediately. “We are disappointed that the board of OZ has indicated that it is not willing to entertain our compelling offer or provide us with access to due diligence,” he said in a statement.
BHP’s Oak Dam copper discovery in South Australia – which has loomed as a big part of solving BHP’s constant underperformance at Olympic Dam – is actually closer to OZ’sHowever, BHP sources have suggested that Oak Dam contains the sort of high uranium levels that would likely require it to be processed at Olympic Dam rather than at OZ mines where the levels of uranium are lower and the processing is therefore simpler.
BHP’s desire to regain control of West Musgrave is ironic given BHP sold what was then just a remote mineral discovery to microcap Cassini Resources in 2014 for just $250,000 and the promise of future milestone payments if the West Musgrave discoveries ever came into production.
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