Lundin Mining Corp. (TSX: LUN) is reportedly in talks with BHP Group (NYSE: BHP) to make a joint bid for copper miner Filo Corp (TSX: FIL), according to sources familiar with the matter. This potential collaboration could address Lundin’s fundraising needs for a neighboring project while offering BHP an opportunity for growth in the copper sector.
The preliminary discussions between Lundin and BHP have sparked investor interest, with Filo’s shares surging up to 12% before settling at an 6.7% increase. This boost brought Filo’s market value to approximately C$3.7 billion (US$2.7 billion).
Lundin’s proposal involves acquiring other shareholders’ stakes in Filo and merging the company’s Filo del Sol copper project, situated on the Argentina-Chile border, with Lundin’s adjacent Josemaria operation. This consolidation could streamline financing for both projects’ development.
The Lundin family currently holds a 32% stake in Filo, while BHP owns nearly 6%. Lundin Mining itself is 15% owned by the Lundin family.
Lundin’s strategy aligns with its focus on copper expansion, as evidenced by its plans to develop the Josemaria project in Argentina. The company is also reportedly considering divesting two European zinc mines to raise funds and concentrate on copper assets.
This potential deal reflects a broader trend in the mining industry, with major companies seeking to expand their copper portfolios. The anticipated increase in demand for copper, driven by clean energy and data center growth, is expected to outpace supply in the coming years.
While discussions are still in early stages, with no guarantee of a formal bid, this move follows BHP’s recent unsuccessful $49 billion offer for Anglo American Plc, which was primarily aimed at acquiring South American copper mines.
Information for this briefing was found via Bloomberg and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
