Two mining giants enter $3 billion merger in Argentina
The operation lasted from the beginning of the month: Canadian Lundin I was looking for international partner develop This is the Josemaría copper mineand the neighbor Edge of the Sun (in which it owned 36%), located between Argentina and Chile.
Their idea was to join forces to buy 100% of the latter and merge them to be able to raise funds, expand and reduce costs in one fell swoop. The chosen one was Australia’s BHP, one of the world’s largest mining companies, which already had a small 5% stake in Filo.
Translation includes US$3 billion for Filo shareholders. The buyer will a 50/50 joint venture between Lundin and BHP.. The company will also include 100% of the shares of Josemaria, located 10 kilometers from Filo del Sol, to which Lundin will contribute and for which BHP will pay US$690 million. The operation will be completed in the first quarter of 2025.
One of the strengths of the operation, as stated in Philo’s statement, is the ability benefit “a recent law approved in Argentina that provides incentives for new investments,” that is,the controversial RIGI, which was launched along with the Bases Act.
Copper was the focus of the expansion from BHP CEO Mike Henry. The partnership with Lundin is an acknowledgement that the company is too reliant on raw materials such as iron ore and coal and does not have enough copper, an important metal for the energy transition that is increasingly in demand for use in wind and solar power equipment and wiring for power grids and data centres.
It also reflects the harsh reality of the global industry, with major producers rushing to expand copper production at a time when New large mines are hard to find and becoming increasingly expensive to build.
He a high price has been paid projects that will take years to develop and cost billions of dollars show how serious the world’s biggest mining companies are about expanding copper and how few projects of this size can be purchased.
BHP has operations in Australia, Canada, Chile, Brazil, the US, Peru, and the alliance with Lundin will be its first big move in Argentina.
Lundin is controlled by the Canadian family of the same name. Jack Lundin, the company’s president and CEO, said Filo del Sol is one of the largest undeveloped copper, gold and silver deposits in the world, the true size of which has yet to be determined.
“Combined with the Josemaría project, we can now create a mining district with significant synergies and economies of scale that has the potential to become “one of the largest of its kind in the world”.
In addition to its activities in Argentina, Lundin operates in Brazil, Chile, Portugal, Sweden and the United States, producing copper, zinc, gold and nickel.