National Post

BHP swoops in on miner Noront

Trumps magnate Andrew Forrest

- THOMAS BIESHEUVEL

BHP Group agreed to buy Noront Resources Ltd. to add a nickel project in Canada, trumping a bid by Australian mining magnate Andrew Forrest, as the world’s biggest miner accelerate­s its push into metals poised to benefit from the greenenerg­y transition.

BHP is increasing­ly gearing its portfolio toward socalled commoditie­s of the future, as investors put greater weight on resource companies’ environmen­tal credential­s. The company is in the process of exiting thermal coal and is considerin­g getting out of oil and gas.

At the same time, it’s putting greater emphasis on metals like copper and nickel, needed to support the green revolution.

Last week it sealed a nickel supply agreement with Tesla Inc. and is expected to sanction a giant potash project later this year.

BHP’S cash offer values the company at $325 million (US$259 million), or $0.55 cents a share, and would trump a planned rival offer from Forrest’s Wyloo Metals Pty Ltd. Noront’s board agreed to support the BHP bid, which is a 69 per cent premium to Noront’s closing price on Monday and 129 per cent higher than where the shares traded before Wyloo announced plans for its bid.

Noront’s main asset is the Eagle’s Nest nickel and copper deposit in Canada’s Ring of Fire region. Nickel is a key component in lithium-ion batteries, used in electric vehicles — packing more into batteries and allowing producers to reduce use of cobalt, which is more expensive and has a less transparen­t supply chain.

“For BHP, the acquisitio­n of Noront presents a worldclass growth option, in a key future-facing commodity,” BHP chief developmen­t officer Johan van Jaarsveld said. “The highly prospectiv­e Eagle’s Nest nickel project provides an excellent platform from which to develop further opportunit­ies in Ontario’s Ring of Fire.”

The world’s biggest miners, from BHP to rival Rio Tinto Group, are making record amounts of cash as they benefit from surging commodity prices from copper to iron ore.

Yet so far, the companies have refrained from the huge deals that dominated the last super cycle and instead focused on returning record amounts to shareholde­rs.

Still, there is increasing signs that the sector is willing to make small bets on early stage projects, especially in copper.

In May, Rio acquired a stake in a Canadian copper project, while BHP has been building its stake in a company planning to develop a giant copper mine in Ecuador.

The offer is conditiona­l on acceptance by more than 50 per cent of the Noront common shares, excluding a small stake that BHP already owns.

Wyloo Metals, which owns about 25 per cent of Noront, in May said it intended to make an offer to buy the company.

Newspapers in English

Newspapers from Canada