Australian iron ore giant BHP Billiton announced on Thursday that it had struck a contract with miner OZ Minerals for 9.6 billion Australian dollars (US $6.4 billion; About 45.654 billion yuan) for OZ Minerals. The move follows BHP's rebuffed bid for OZ in August at A $25 a share. BHP was granted due diligence rights on November 18 after raising its offer to A $28.25 a share.
The acquisition marks a milestone for BHP.
OZ Minerals' main Australian operations are understood to include the Prominent and Carrapateena copper-gold deposits in South Australia and the West Musgrave copper-nickel development in Western Australia.
The acquisition is crucial to BHP's operations at the Olympic Dam copper mine in South Australia. OZ Minerals' Famous Hills and Kalapatena copper and gold mines are close to BHP's Olympic Dam and Oak Dam projects, and creating a South Australian copper basin could unlock potential operational synergies.
In addition, the merger is expected to boost BHP's nickel mining operations in Western Australia. The West Musgrave copper and Nickel project would add a large greenfield nickel option to BHP's Nickel West project in Western Australia. In addition, the acquisition will expand its business in key materials for clean energy and electric vehicles.
It is understood to be BHP's biggest deal in more than a decade and the biggest mining takeover in Australia since Barrick Gold bought Equinox Mining for US $5.78bn in 2011.
The A $28.25-a-share offer, first announced in November, will be put to shareholders for approval in late March or early April next year, BHP said in regulatory filings.
The deal, which has the unanimous support of OZ Minerals' board, will cement BHP's position as one of the world's largest copper producers. Demand for copper, the metal at the heart of the clean energy transition, is expected to soar nearly 60 per cent over the next 20 years.
The mining giant said "future-oriented metals", which include nickel and fertiliser potash, were at the heart of its growth as iron ore consumption stagnated and the world moved away from fossil fuels.
"The combination of BHP Billiton's assets, skills and technical expertise with OZ Minerals provides an exclusive opportunity for the company," BHP Chief Executive Mike Henry said in the statement.
BHP has reduced its coal operations in recent years and this year sold its entire oil and gas business to Woodside Energy. The acquisition will be funded from BHP's existing cash reserves and cash equivalents, as well as a new loan facility.
