BHP to Further Explore Canadian Nickel
- May 6, 2022
- Posted by: Quatro Strategies
- Category: Mining
BHP Group’s top executives acknowledge the company’s ambitions in the resource rich Canada as they call the mining giant’s attempt to buy a small Canadian nickel miner as “almost the tip of the iceberg”.
The world’s biggest mining company calls nickel one of the three “future-facing commodities”, along with copper and potash, and has set up its business development team in Canada. The company has been investigating opportunities in Ontario’s “Ring of Fire” region.
BHP’s aggressive nickel move comes from the fact that the world is expected to need four times as much as nickel in the next 30 years as it has in the last 30 years.
BHP further stated that besides the huge deposits, Canada has become more investor friendly in recent years and it is a market that understands and invests in projects. The company executives say BHP will “absolutely” be looking for more Canadian nickel assets after it bowed out of a bidding war for Noront Resources in December.
But the company underlined that the Noront deal is not a one and done. It is just the “tip of the iceberg” and the company will look for more deals to grow its business in Canada.
The planned growth process includes in-house exploration, early-stage investments in junior and mid-sized miners, internal growth and takeovers. For example, BHP just invested C$100 million ($78 million) in Filo Mining Corp., a Canadian company exploring a copper deposit on the Chile-Argentina border.
Copper and potash are focuses for BHP as well as nickel, a key component in electric vehicle (EV) batteries. BHP has no preference among the three, with decisions being based on value and opportunity costs in terms of other capital allocation options.
BHP says early and mid-stage entry poses more risk but also has a higher reward. But the company is also on the lookout for deals in other sections of the market.
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