Member Info for Ortherncopper

Rio Tinto has increased its offer to buy out Turquoise Hill Resources to $3.1bn (£2.6bn) as it moves to gain more control of a giant copper mine in Mongolia.

The Anglo-Australian miner said it was offering C$40a share to Turquoise Hill’s minority shareholders – 18pc higher than its previous bid of C$34 that was rejected earlier this month.

Shares in Turquoise Hill surged 24pc – their biggest intraday increase since March.

Another royalty deal is definitely not a good idea… however, it’s not BHPs asset, and Darryl needs to tell them so..

Re raising funds to restart some exploration, If our board are incapable of closing a JV with anyone, (or was this just an empty bluff?) and BHP apparently don’t want to fund us, they should offer a chunk to another supermajor.. at a significant premium…. given we have been told many times we are vulnerable, that they are circling, sniffing around, this should not be difficult…

Our board need to stop Pandering to BHP and NCM..

I think NCM could be bought out before we are.

Their share price is at a 5 year low, their shareholders are frustrated at the lack of returns, and their finances seem to be committed to their current developments.

I simply can’t see them buying Solg

The reality of the guaranteed recession and its consequences is hitting all the markets….. Add to that, Citibanks prediction today of uk inflation hitting up to 18% by January, it’s not looking pretty…

It’s clear no major shareholders have sold as our volume is simply pitiful.

Our board need to grow a spine and do what is best for all, it pander to BHP and NC.

I’m no fan of Mather…. But come on Nick… force something to happen.

Our board also need to clearly explain…. It is simply unacceptable for us shareholders to be getting a better understanding of what happened, from third parties ad journalists… Appealing shareholder communication again by our board

Unfortunately, even at this price I won’t put any more money back in…

And that’s down to our board and it’s progress/actions

“ Would you agree, on the balance of probability, NCM are less interested in SOLG now that a year or two ago?”

Judging by current share price and sentiment…. Everyone is!

Agreed… a blue finish here I think

Cgp were always vocal about wanting to monetise… they signed the renewed cooperation statement, and have been silent since…

how I would love to know what was agreed behind closed doors… And if it even still applies now Darryl is around..

I contacted Fawzi and asked for just 1 example, of what the renewed partnership had achieved, how it had helped progress, just 1 example… I got a brush off..

surely it must have been an agreement to monetise in some way to placate and silence CGP and Irwin.

Yes that stood out to me also

of course feel free

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 keen to acquire the OZ assets.

“Whether it is solar or wind, steel is going to play a part.”

As deputy chairman of Perth stockbroking and financial services firm Argonaut, Liam Twigger is a well-known face in mining equity markets and the mergers and acquisitions space.

He is also chairman of SolGold; the Ecuadorian copper explorer that many believe will follow OZ into BHP’s acquisition crosshairs.

Mr Twigger reckons the recent slowdown in IPO activity won’t turn into a long winter for battery minerals aspirants.

“Is there going to be a global recession? I don’t think so,” he said.

“You’ve got very low unemployment across the globe, certainly in the Western economies, so people have still got money in their pockets. So, I think it’ll be a pause, and then gangbusters again, and that will underwrite the underlying demand for all commodities.

“There was a shortage of everything just before we moved into this correction, and I think there’s still a shortage. The stocks on the LME for zinc and copper are still very low.

“And it won’t take a lot to make prices rocket along. When prices rocket, there’ll be an appetite for development plays and potentially exploration plays, but I think the market has moved more towards production resources and advanced projects for now.”

While BHP is rapidly moving from brown commodities to green metals, Mr Twigger said there was still a role for coal as much as some wanted to deny it.

“Some of the profits that the coal companies are making are insane,” he said.

“New dollars and the millennials want to invest in green projects and opportunities, but there’s still a lot of money to be made out of fossil fuels.

“But we need to recognise they’re on the wane, and ultimately, we will transition to what is, hopefully, to a carbon-free world.”

But if you have scanned the periodic table trying to work out which row the “critical minerals” are on, you will be left disappointed.

“Critical minerals” is a political term rather than a scientific term; the minerals listed will differ by the nation depending on the particular needs and supply arrangements that exist in those jurisdictions.

For example, the European Union’s list of 30 critical minerals includes coking coal.

The US list of 50 critical minerals does not, and nor does coking coal feature on the list published by world’s biggest exporter of top quality coking coal, Australia.

Asked whether Australia and the US should follow the EU lead and add coking coal to their critical minerals lists, Coronado Global Resources boss Gerry Spindler said: “Now you mention it, it is an option that probably ought to be explored.”

Mr Spindler was speaking on Tuesday shortly after announcing that Coronado’s coking coal mines in Queensland and the US had delivered a $US561.9 million half-year profit; a far cry from last year’s $US96.1 million half-year loss.

Rival coal miners like Whitehaven and Yancoal will report record profits over the next few weeks too.

Despite efforts to distance itself from coal, oil and gas recently, BHP will confirm on August 16 that about a quarter of its earnings came from coal over the past year, if analyst consensus is right.

Analysts believe BHP made about $US8.48 billion selling coal over the past year; a larger sum than it offered to acquire OZ Minerals this week.

Mr Spindler reckons the market fervour for “green” minerals has gotten a bit out of control.

“Frankly there is a little too much faith [among investors] in the attractiveness of what are determined to be green minerals, rare earths and lithium particularly,” he said.

“Having had some brief experience with both, these things are not easy to mine and not environmentally pure in the processing or mining either.”

BHP’s Olympic Dam mine and Lynas’ rare earths business might be classified by investors as green today, but barely a decade ago they were more likely to be targeted by environment groups for the low-level radioactivity of their wastes.

“These are necessary minerals of course, hence their attractiveness, but the old, tried and true minerals are even more necessary,” said Mr Spindler.

“Steel is going to be a fundamental requirement for changing the grid and changing the environment for the acceptance of green technologies.

“We believe we will be building blast furnaces [which consume coking coal as a reductant] in India for at least another 10 years,” he said.

“A typical blast furnace life is 20 years.

“Coking coal demand is not going to fall off a cliff.”

Global thermal coal demand is expected to match all-time highs this year according to the International Energy Agency and Mr Narendran says India’s rapid adoption of renewables will more likely service growth in electricity demand, rather than cannibalise the market for incumbent coal-fired power producers.

“India has made huge progress on renewables and is one of the biggest producers of renewable energy in the world, but coal will still be used to generate electricity for some time. Incremental capacity will be more renewables, but the existing capacities will still need coal,” he said.

The phrase “critical minerals” was rarely heard in Australian mining and capital markets until December 2017, when then US President Donald Trump demanded his bureaucrats publish a list of the minerals that were “critical” to US national security and economic prosperity.

Amid a trade war with China, Mr Trump saw the need to mimic and weaponise the sort of critical minerals list that the European Union had started publishing in 2011.

The Australian government published its debut list in 2019 while India and Japan now have critical minerals lists too.

As Mr Andrawes’ statistics suggest, the critical minerals lists published by governments have been a powerful marketing tool for junior miners when trying to raise funds for projects that will produce lithium, rare earth elements or any of the other “green metals” that tend to dominate the lists.

Mr Andrawes said he was bullish about copper and could understand why BHP was courting OZ after a two-year period in which Australia’s biggest miner has divested its entire petroleum division and large chunks of its coal business.

“They’ve moved away from oil and gas obviously, and they’re not going to capitalise on their coal assets so the move to focus more on nickel and copper makes sense in terms of their strategy,” he said.

But the timing of BHP’s decision to exit its oil, gas and coal assets will see it forego very large short-term profits.

The past year has shown that unfashionable commodities can boom too; prices for liquefied natural gas, the thermal coal used in power generation and the coking coal used to make steel surged to record levels long before Russia invaded Ukraine.

When the Ukraine war convinced most of the world to stop buying Russian fossil fuels, the prices surged even higher, and it’s reasonable to think Australian producers of coal, oil and gas are in for an elongated period of high prices while Russian commodities are blacklisted.

But the zeal with which investors and miners are excluding carbonaceous commodities from their portfolios makes this year’s fossil fuel price boom unusual; economic theory suggests that high commodity prices will incentivise investment in new supply and eventually bring about lower commodity prices.

But there is scant sign that money is rushing in to build new mines to capitalise on the high prices.

Big foreign customers like India’s Tata Steel – which relies on Queensland’s Bowen Basin for the coking coal that goes into its Indian steel mills – are getting worried.

“I don’t see too much investment happening in growing coking coal capacities in Queensland,” said Tata chief executive TV Narendran on a visit to Brisbane this week.

“That’s a concern because if India does not see the coking coal supply from Australia increasing over the years then obviously India will have to start looking at other sources which would be a pity because India and Australia have a strong relationship.

“We want to double our [steel] capacity in the next 10 years in India.

Mr Narendran says if coking coal starts to be substituted out of the steel industry on emissions grounds, then LNG will likely be the initial winner before hydrogen takes over as the reductant of choice.

But he doesn’t expect substitution to occur to any meaningful degree for a long time.

If any further confirmation was needed on the rise of battery minerals and so-called “green” metals, BHP provided it with this week’s $8.3 billion takeover bid for copper, gold and nickel miner OZ Minerals.

Mr Andrawes, the global head of natural resources for advisory firm BDO, said the “future-facing commodities” mantra of BHP boss Mike Henry is resonating from the top end of town all the way down to IPO-ready explorers.

And the tailwinds of any project associated with the energy transition have only increased with Labor’s rise to power in Canberra.

That is expected to make it harder for fossil fuel projects to attract both funds and permits, while the red carpet is rolled out of anything seen as “green”.

Mr Andrawes said the winds of change were obvious at last week’s Diggers & Dealers mining conference in Kalgoorlie.

“Anyone even halfway advanced in developing a lithium project had electric vehicle manufacturers and battery manufacturers all over them for off-take,” he said.

“From the top end of town, reflected right through the industry, down to the smaller end, there’s strong interest in energy transition.

“It comes into battery minerals, it comes into copper, which is part of the transmission of energy, and even uranium has interest because of the carbon-free element of the power it generates.”

BDO research shows about a third of all IPOs in the past year or so have been in the battery minerals space or with exposure to battery minerals.

The research shows a big chunk of all IPOs are still in gold, but many of them are gold-copper with the copper side increasingly relevant.

The most successful Australian gold mining entrepreneur of the past decade, Bill Beament, committed a kind of heresy at the 2021 Diggers & Dealers when he declared gold was “not green” and he would instead pursue a future in “green metals” like copper.

Mr Andrawes expects the local gold industry to remain strong, but he sees battery minerals and green metals becoming a key pillar of the Australian economy.

“The opportunity around battery minerals and energy transition is probably even bigger (than gold) over the medium to longer term,” he said.

Peter Bradford-led nickel producer IGO is evolving proof of the change.

The company sold out of gold for a future paved with battery metals in 2020 when it struck a $US1.4 billion ($2 billion) deal for a 25 per cent stake in Australia’s best lithium mine and a 49 per cent stake in a lithium hydroxide plant that is set to come online later this year.

Sources close to IGO and OZ Minerals this week hosed down speculation of a possible merger play between the two that might emerge as an alternative to BHP’s takeover tilt.

IGO only recently wrapped up its acquisition of nickel producer Western Areas and has big plans to expand its lithium mining and processing assets in WA.

I remember Mather talking years back about the punitive government taxes in the contracts that kick in in the event of Solgold selling a tenement