Lachlan Nieboer’s Post

⚒ 𝐏𝐥𝐮𝐧𝐠𝐞 𝐢𝐧 𝐏𝐫𝐢𝐜𝐞𝐬 𝐚𝐧𝐝 𝐎𝐯𝐞𝐫𝐬𝐮𝐩𝐩𝐥𝐲 𝐅𝐨𝐫𝐜𝐞 𝐁𝐇𝐏 𝐭𝐨 𝐒𝐮𝐬𝐩𝐞𝐧𝐝 𝐍𝐢𝐜𝐤𝐞𝐥 𝐎𝐩𝐞𝐫𝐚𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 𝐖𝐞𝐬𝐭𝐞𝐫𝐧 𝐀𝐮𝐬𝐭𝐫𝐚𝐥𝐢𝐚 Australian mining giant BHP announced it will suspend its 𝗡𝗶𝗰𝗸𝗲𝗹 𝗪𝗲𝘀𝘁 𝗼𝗽𝗲𝗿𝗮𝘁𝗶𝗼𝗻𝘀 and 𝘁𝗵𝗲 𝗪𝗲𝘀𝘁 𝗠𝘂𝘀𝗴𝗿𝗮𝘃𝗲 𝗽𝗿𝗼𝗷𝗲𝗰𝘁 from October due to the plunge in metal prices and oversupply in the global market. The world's largest listed miner intends to review this decision by February 2027. BHP's Australia president Geraldine Slattery indicated that the company remains optimistic about nickel demand towards the end of the decade, noting that additional investment beyond that in Indonesia will be required to meet future demand. BHP will invest approximately $300 million annually after the transition period to support a potential restart of its nickel operations. During the interim shutdown, BHP will suspend mining and processing operations at the 𝗞𝘄𝗶𝗻𝗮𝗻𝗮 𝗻𝗶𝗰𝗸𝗲𝗹 𝗿𝗲𝗳𝗶𝗻𝗲𝗿𝘆, 𝗞𝗮𝗹𝗴𝗼𝗼𝗿𝗹𝗶𝗲 𝗻𝗶𝗰𝗸𝗲𝗹 𝘀𝗺𝗲𝗹𝘁𝗲𝗿, and the 𝗠𝘁 𝗞𝗲𝗶𝘁𝗵 𝗮𝗻𝗱 𝗟𝗲𝗶𝗻𝘀𝘁𝗲𝗿 𝗼𝗽𝗲𝗿𝗮𝘁𝗶𝗼𝗻𝘀, as well as the development of the 𝗪𝗲𝘀𝘁 𝗠𝘂𝘀𝗴𝗿𝗮𝘃𝗲 𝗽𝗿𝗼𝗷𝗲𝗰𝘁. The company will implement a care and maintenance program during this period. Since fiscal 2020, BHP has invested approximately $3 billion to maintain Nickel West. Despite this significant capital investment, Nickel West is expected to lose approximately $300 million in the fiscal year ending June 30, 2024, due to the decline in global nickel prices. #BHP #NickelMarket #MiningIndustry #MarketChallenges #IndustryChange #Nickel #Ore #Mining #Engineering

**BHP walks away from proposed $49bn takeover of Anglo American** - BHP's primary interest in targeting Anglo American was its #copper mines, aiming to secure a leading position in the growing #battery metals market and achieve about 10% of global copper production. - A successful deal would have made BHP the world's largest copper producer, significantly boosting its presence in top copper-producing countries, Chile and Peru, and reshaping the mining industry. - Anglo American plans to retain its copper and iron ore assets while reducing investments in its #Woodsmith fertilizer project, seeking strategic investors for full-scale operations by 2026. - #BHP made concessions to #Anglo, including maintaining Anglo's Johannesburg office, listing BHP shares in South Africa, and supporting increased South African employee ownership, with all measures upheld for at least three years post-takeover. #mining #mineralexploration #mineralprocessing https://lnkd.in/g_v9qms6

So what's the big deal if Anglo American gets taken over by BHP (or anyone else)? The answer is it's complicated. As this Financial Times article (there is a free version of the article available) points out, the company's fortunes, as well as those of the country generally, have struggled in recent years. The downturn in the platinum metals markets has come as South Africa’s mining industry has been embattled by power outages and crumbling infrastructure after years of government under-investment. Anglo’s journey from a South African corporate wealth creator to prey for a rival miner reflects the country’s own decline as a mining powerhouse, as well as the rising risks of doing business in the country. Anglo was the heart of industry which transformed South Africa from a colonial backwater to the world’s biggest diamond and gold producer, laying the foundations for Africa’s most industrialised economy.

***updated on May 14th am*** Anglo American has announced it will restructure its business to exit diamond, platinum and coal mining. Anglo's management is clearly under serious pressure, they have completely changed everything about their strategy (which begs the question why did it require a bid for management to take action? Not a good look).  Choice of what to keep and what to divest tells you what assets / commodities Anglo thinks are attractive. Notably Anglo wants to keep SA iron ore vs. BHP which would divest. It is likely that BHP would want to stay involved. An imminent deal is now off the table but it can come back with a bid in 6 months for example (if they don't go hostile by May 22). BHP management have probably been working on this for years, so it is unlikely they will give up so easily. Anglo is only more attractive to BHP with Amplats and De Beers divested. A lot could happen and hard to predict the outcome, stay tuned! ***update end*** Anglo American has rejected the renewed offer from BHP. It's tricky to say whether a deal will eventually be reached. BHP is unlikely to forgo the pre-condition of a spin off of Amplats and Kumba in South Africa, but Anglo will need a bump in premium to accept that execution risk of spin off pre-deal. But then BHP may not be willing to pay much more. Other diversified miners may be interested and watching the situation closely, but capital discipline means the hurdle for a gigantic deal like this is very high. Not to mention the complex regulatory and political challenges of this deal which may face anti-trust reviews in multiple jurisdictions. We discussed this with Sky News this afternoon. RBC Brewin Dolphin #AngloAmerican #AAL #BHP #miners #diversifiedminers

In 2017, the Chilean government approved a $2.5 billion expansion of BHP’s Spence copper mine — the diversified miner’s second largest copper mine behind Escondida. In 2020, BHP became the top shareholder in SolGold (TSX:SOLG), an Australian miner developing the Cascabel copper-gold project in Ecuador. In 2021, chief executive Mike Henry said the company needs more “future-facing metals” such as copper. Two years later, BHP Group (NYSE:BHP), the biggest mining company in the world by market capitalization ($142 billion as of the latest close) was bidding on Anglo American (LSE:AAL), eager to snatch the UK-based miner’s copper assets in Chile and Peru, namely Los Bronces, Collauhuasi, El Soldado and Quellaveco. While the deal ultimately failed, the fact that BHP was willing to pay $39 billion for Anglo’s copper mines says a lot about the importance of copper to the electrified economy, and the companies that mine it. As this article will prove, it isn’t only BHP that is hunting for copper, which is now the most critical mineral on Earth due to it being a required raw material in electric vehicles and renewable energy, yet in increasingly short supply. Indeed the entire supply chain — from upstream miners to downstream users, and everything in between, including majors, mid-tiers, juniors and copper smelters — is screaming for copper, trying desperately to lock up supply before the world runs out, as demand overtakes available quantities as early as next year.ttps://https://lnkd.in/dskFNx4d

BHP can and will play the long game on their strategic foresight driven investment into #transition metals. Since getting back into work after the holidays- it’s clear though from conversations across our clients that everyone is now focused on trying to understand what’s happening with the accelerated Chinese investment into the Indonesian #nickel sector- from #mining through to #smelting. What will be the #carbon, #ghg, #sustainability and #esg profile of that #commodity and #metal flow? Will price always be the key buyer criteria? Quote from the article by James Thompson: “But we shouldn’t miss what BHP is saying here in calling out a structural change in the market. To be clear, the view inside the company has not changed in terms of nickel’s long-term demand story. But there is a clear sense that the industry, and BHP, have been surprised by the pace at which Indonesia’s supply has increased, and the rate at which technological changes have allowed this lower-quality Indonesian nickel to infiltrate the part of the supply chain that BHP targets with its nickel sulphide.”

#ASXNews Kolosori Nickel Project – Project Ramp Up Proceeding Pacific Nickel Mines is pleased to confirm that the Company is proceeding with the ramp-up of mining and stockpiling operations at the Kolosori #Nickel Project in the Solomon Islands in which the Company holds an 80% interest. • Loading of the second 60,000 tonne bulk carrier was completed on 17 February 2024 with the ship departing site on 18 February 2024. The loading took longer due to unseasonal persistent rainfall however the loading incurred no demurrage. • The average grade for the second DSO shipment to offtake partner Glencore International AG was around 1.65% nickel. • PNM is proceeding with the ramp up to full ore production of around 1.5mtpa which is expected to take around 2 to 3 months. #PNM’s CEO Geoff Hiller commented: “The PNM team is proceeding with the ramp-up to full ore production of around 1.5mtpa despite weakness in global nickel prices. It is anticipated that full production of 1.5 wet mtpa will be achieved by the time we get to the dry season from April onwards. “While rain has been an obvious impediment over the last few months, the Company is pleased with progress during the Project’s commissioning phase and elected to proceed with ramping up ore-production despite the impact of some delays due to the rain and price weakness in global nickel markets.“ Full announcement: https://loom.ly/_fFh26s #PacificNickel #ASX

We are thrilled to announce that over 30% of all globally mined copper now comes from sites with The Copper Mark, the leading assurance framework for responsible value chains of copper. The milestone has been reached after all of CODELCO – Corporación Nacional del Cobre de Chile's mines and smelters completed their assurance process and were granted the Copper Mark.   The now 54 Copper Mark recipients include ten of the twenty largest copper mines in terms of global production. Furthermore, the Copper Mark now covers almost 80% of mined copper in Chile, the world’s number one copper mining nation, according to 2022 production figures from CRU.   Chilean state-owned Codelco was ranked the largest copper producing company in the world in 2022 according to data from CRU, the global commodities expert, with a total of 1.6Mt of mined copper. They were followed by Freeport McMoRan and BHP, whose main assets have also received The Copper Mark. Michèle Brülhart, the Copper Mark’s Chief Executive said:   “The Copper Mark now covers almost a third of globally mined copper and 80% of production in the largest copper producing nation in the world. This is an exciting milestone and shows the progress we have made towards our vision of all copper being responsibly produced .”   “The energy transition is boosting copper demand. We will continue to work hard to ensure the social and environmental benefits of clean energy are not undermined by the impacts caused by the extraction of materials needed to support it. As part of this work, we continue to engage with the full value chain and to extend our partnerships with end users. These efforts across the industry are welcomed by consumers, who are increasingly seeking out more responsibly produced raw materials”.

A true milestone for the metals industry: More than 30 % of all globally mined copper now comes from sites certified with The Copper Mark. Why that matters? Because sustainable metals are the products of the future. Sustainability in the supply chain is key – business partners are increasingly asking for responsibly produced metals. And even with the ideal conditions for recycling and a circular economy being put into place, primary materials are vital to meet skyrocketing demand for green technologies and digital infrastructure. Reason enough for us at Aurubis to strongly support the ongoing development of the Copper Mark as the standard of the global copper industry. A standard we have implemented successfully already: Four sites in our smelter network are already Copper Mark certified and additional two sites have started the certification process. Much reason to be proud of. And clear proof of our commitment to sustainable and responsible supply and value chains in the raw materials industry. More than 30 % sustainably produced copper is a milestone already – let’s work together closely to reach the next milestone soon.   #tomorrowmetals #sustainablemetals Michèle Brülhart Banyiyezako

Huge news from the copper world with BHP bidding $39b takeover with Anglo American!! BHP Group Ltd. proposed a takeover of Anglo American Plc that values the smaller miner at £31.1 billion ($38.8 billion), in a deal that would catapult the combined company’s copper production far beyond its rivals while sparking the biggest shakeup in the industry in over a decade. The world’s biggest mining company has proposed an all-share deal in which Anglo would first spin off its controlling stakes in South African platinum and iron ore companies to shareholders before being acquired by BHP. The total per-share value of the non-binding proposal is about £25.08, BHP said, which is a 14% premium to Anglo’s closing share price on Wednesday. https://lnkd.in/ejbg67BH