BHP and their actions re OZ.. pertinent to us18 Aug 2022 16:47
ORIGINALLY POSTED BY ORTHERNCOPPER ON SOLG
BHP’s takeover target, OZ Minerals, says “incredible synergies” could be created in the South Australian copper fields if industry participants shifted their “mindset” over how they work together.
In his first public speech since rejecting BHP’s $8.3 billion takeover bid, OZ Minerals managing director Andrew Cole said his company could more than double its copper production from its existing growth options and expressed confidence that he could find a way to fund the company’s growth projects.
Mr Cole’s speech in Port Pirie came as BHP has warned that copper demand would “take off” after 2025 and would potentially require $US250 billion of spending on new mines to satisfy demand.
“In working together, there could be opportunities in leveraging our approach to local consumables, local manufacturing, local processing and smelting with our concentrate being sent globally.
“Stranded ore bodies in proximity to our assets could be processed at our sites.
“The power line that we use to supply our Prominent Hill and Carrapateena mines has significant additional capacity for other new connections to the grid.
“Far more is possible if we can shift our mindset around how we work together.”
It was unclear what exactly Mr Cole meant by “shift our mindset”, but it is known that OZ and BHP had recently negotiated a possible deal for BHP to buy a portion of OZ’s copper concentrate and share other infrastructure in the Gawler Craton.
The deal was never struck and BHP’s responded with its August 5 takeover bid, which the OZ board rejected without offering due diligence.
“Instead of just developing a single asset, we look for copper-rich provinces where initial or existing developments can work as a hub for wider extraction opportunities,” said Mr Cole.
OZ wants to triple underground mining rates at its Carrapateena mine in South Australia eventually, has several small early-stage project options in Brazil and will soon decide when to start construction on a nickel and copper mine at West Musgrave in Western Australia, which is expected to cost more than $1 billion.
BHP has pointedly raised doubt over how OZ will manage to fund that suite of growth projects, putting the spectre of a dilutive equity raising into OZ shareholders’ minds and suggesting its huge financial firepower could solve the funding challenge if the $25 per share offer were accepted.
Mr Cole pushed back against that narrative on Wednesday, implying that OZ would not struggle to fund its projects.
“These projects are attracting substantial interest; as I often say to my team, capital is not a constraint for good projects. There is a shortage of great projects, not capital,” he said.
“OZ Minerals has possible growth options to more than double our production.”
Mr Cole’s appearance at the Port Pirie event came as BHP published an extremely bullish projection for future copper demand which helps to explain why it is
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