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(Bloomberg) — BHP Group Ltd. has set up a joint venture with Canada’s Lundin Mining Corp. to buy copper miner Filo Corp., gaining access to projects in Chile and Argentina.
The world’s biggest miner will take a 50% stake in Filo, which owns the Filo del Sol mine in Chile, BHP said in a filing Tuesday. It will also separately acquire 50% of Lundin’s Josemaria operation, just over the border in Argentina. The two projects, in the Vicuna copper belt, are within 10 kilometers (6.2 miles) of each other.
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BHP has been seeking to increase its exposure to copper, a metal that’s vital to the energy transition. Chief Executive Mike Henry has said copper demand will double over the next two decades and sees the red metal as a key pillar to the company’s growth plans.
The company’s total cash payment for the proposed transactions is expected to be about $2.1 billion, it said. The total acquisition price for Filo is around C$4.1 billion ($3 billion), or about C$33 per share. That compares with Canadian-listed Filo’s closing share price of C$29.42 on Monday.
The joint venture will create a long-term partnership between the two miners to develop an emerging copper district with world-class potential, BHP said.
“This transaction aligns with BHP’s strategy to acquire attractive early-stage copper projects and enter into strategic partnerships with parties where complementary skills and experience can deliver long-term economic and social value,” Henry said in the statement.
Earlier this year, BHP attempted a blockbuster takeover of Anglo American Plc to build its copper exposure, but was left frustrated when the latter declined its offer.
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