Global mining giant BHP Group and Canada-listed Lundin Mining have announced a joint acquisition of Filo Corp, a move designed to enhance their presence in South America’s burgeoning copper market. The deal, valued at C$4.5 billion ($3.25 billion), will see the two companies form a 50/50 joint venture to manage the Filo del Sol and Josemaria projects, which span the Argentina-Chile border.
BHP and Lundin’s offer of C$33 per Filo share represents a 12.2% premium over the copper miner’s last closing price, with BHP contributing approximately $2.1 billion in cash. This acquisition underscores the urgency with which major mining companies are expanding their copper portfolios, a metal integral to the energy transition.
The strategic partnership between BHP and Lundin reflects a broader industry trend: major miners are increasingly opting to acquire existing assets rather than develop new ones from scratch. Rising development costs and extended timelines for regulatory approvals make acquisitions more appealing. This approach is evident in BHP’s recent activities, including an unsuccessful $49 billion bid for Anglo American.
Copper’s pivotal role in renewable energy technologies, such as wind and solar power systems and electrical grids, makes it a highly sought-after commodity. Despite a recent dip in copper prices, the long-term demand for the metal is expected to grow significantly, with predictions of consumption doubling over the next two decades.
The collaboration between BHP and Lundin is also seen as a way to optimize resources and reduce costs by combining the neighboring Filo del Sol and Josemaria projects. This trend of consolidating assets is gaining traction in the mining industry, as evidenced by similar strategies from other leading firms like Glencore.
BHP’s CEO, Mike Henry, emphasized that this acquisition aligns with the company’s strategy to secure early-stage copper projects and forge strategic partnerships. Despite the challenges posed by developing new mining infrastructure, this joint venture marks a significant step in BHP’s and Lundin’s efforts to bolster their copper assets and support the global shift towards sustainable energy.
