BHP Group Ltd. — fresh from being rebuffed by Anglo American Plc — swooped to buy Filo Corp., teaming up with Lundin Mining Corp. in a US$3 billion deal to gain South American copper assets.
Paul-Alain Hunt and Thomas BiesheuvelThe joint venture will create a long-term partnership between BHP and Lundin to develop an emerging copper district with world-class potential. Photographer: Dado Galdieri/Bloomberg
The strategy reflects a recognition that the company is too dependent on commodities such as iron ore and coal and doesn’t have enough copper, an essential metal for the energy transition. It also mirrors a wider reality across the global industry, as the top producers rush to expand in copper at a time when large new mines are hard to find and increasingly costly to build.
Combining two neighboring sites to make a bigger and more efficient mine is also in vogue across the industry, with Glencore Plc’s CEO championing the need to consolidate assets in places such as Canada and Chile. Lundin Mining worked with Rothschild & Co and Morgan Stanley on the deal, while Filo was advised by BMO Capital Markets. BHP worked with TD Securities on the transaction.Copper prices surged to a record in May, but have dropped by almost a fifth since then, largely due to concerns over a deteriorating Chinese demand outlook. Consumption is expected to increase in the longer term, with BHP’s Henry previously saying it would double over the next two decades.
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