BHP shakes hands with Lundin Mining to acquire Filo Corp in $3.2b venture to grow South American copper hub

BHP has moved on from rejection by Anglo American and found another way to get its hands on more South American copper, by linking up with a Canadian miner owned by a Swedish family. BHP and Lundin Mining have agreed to jointly acquire 100 per cent of Filo Corp — another Toronto Stock Exchange-listed company — which owns the Filo del Sol copper project in Argentina. BHP and Vancouver-based Lundin have also agreed to form a 50/50 joint venture to hold Filo del Sol and the Josemaria copper development in Chile. Lundin owns a 100 per cent stake in Josemaria and if the Filo acquisition goes through BHP will spend $US690 million ($1.1 billion) to buy half of Josemaria. BHP told investors the total cash payment for the proposed two-step transaction is expected to be about $US2.1b ($3.2b). The duo will be paying a premium for Filo of 32.2 per cent based on its 30-day volume weighted average price. The Filo board has urged shareholders to back the takeover offer. BHP took a 5 per cent stake in Filo del Sol back in 2022 for $US80m as a toe-hold investment to deepen its understanding of the burgeoning Vicuña copper district. BHP chief executive Mike Henry said the latest transaction aligns with the company’s strategy to acquire “attractive early-stage copper projects” and enter into strategic partnerships to develop them. “The joint venture with Lundin Mining will advance the development of the Vicuña district, which offers the potential to become a major contributor to the economy of Argentina for decades to come,” he said. Anglo American in May rebuffed multiple BHP’s buyout attempts, which had ultimately culminated in a $74 billion offer. BHP was eager to get its hands on Anglo’s prized South American copper mines to tack on to its own substantial copper presence in Chile, including the Escondida mine — which is the largest copper producer in the world. But the London-headquartered Anglo believed the structure of the deal was too complicated and fraught with political risk. BHP wanted the diversified miner to demerge two South African business units before it swallowed up the remainder of Anglo’s portfolio. BHP’s appetite for big deals returned last year after acquiring fellow ASX-listed copper producer OZ Minerals for about $9.6b. Copper is a key input for the semiconducting components in the hardware that enables data centres and artificial intelligence technologies. There has been considerable market hype around the metal which accompanied a sharp price rise earlier in the year. But recently the price has cooled off to currently trade at $US8906 per tonne on the London Metal Exchange, a rise of just 3 per cent year-on-year. Shares in BHP were down 1.3 per cent in early trade to $41.51, in line with falls from its iron ore peers. Lundin was founded in 1994 by Swedish businessman Adolf Lundin and focuses on base metals like copper, zinc and nickel across mining operations in Europe, North America and South America. Adolf’s grandson Jack is currently the leader of Lundin.