08 augustus 2022
12:15
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The Australian miner OZ has labeled a bid of almost 6 billion euros by its compatriot and sector colleague BHP as too low. Inset: copper, the most crucial metal for the energy transition.
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‘We have a unique collection of copper and nickel mines, all with strong long-term prospects in favorable locations. We mine metals that are important for the electrification and greening of the world. BHP’s proposal does not value those aspects.’ With that words Australian miner OZ Minerals politely but firmly rejects mining giant BHP on Monday.
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This was mainly because the copper price after a equally scorching 2021 had fallen by almost a third since its peak of over $10,000 per tonne in March 2022. For investors, copper, nicknamed Dr. Copper, through its many industrial applications, is a good barometer of the global economy. And so many investors are betting on a significant cooling of the global economy by selling copper.
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Apart from a cyclical cooling of demand, analysts have been saying for some time that the copper market is struggling with a structural supply shortage. Due to the low copper price for many years, little has been invested in the search for new mines, while demand is increasing rapidly due to the energy transition.
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A lot of copper is processed in wind farms and electric cars, for example. ‘An average car with a combustion engine contains 15 kilograms of copper. That is 80 kilograms in an average electric car,” British asset manager Martyn Hole (Capital Group) pointed out last year in a interview.
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BHP doesn’t seem to have any intention of releasing its intended prey any time soon. The mining giant has let OZ know that it has built up an interest of almost 5 percent through derivatives.
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