Tag Archives: Nickel West

BHP eyes South Australian copper basin consolidation with latest OZ Minerals offer

BHP has submitted a revised non-binding indicative proposal to the Board of OZ Minerals Limited (OZL) that, subject to a successful four-week due dilligence period, could see the major miner acquire the mid-tier base metal-focused miner.

The offer to acquire 100% of OZ Minerals by way of a scheme of arrangement for a cash price of A$28.25/share ($18.9/share) is a 13% increase on the offer BHP previously put forwad and was rejected by the OZ Minerals Board. It, according to BHP, represents the best and final price the mining major is willing to offer under, in the absence of a competing proposal.

The OZ Minerals Board has confirmed to BHP that it intends to unanimously recommend the revised proposal to OZ Minerals shareholders as being in their best interests in the absence of a superior proposal, subject to the parties entering into a binding scheme implementation agreement (SIA) following completion of BHP’s confirmatory due diligence and an independent expert concluding that the revised proposal is in the best interests of OZ Minerals shareholders, it said.

The proposed transaction, valuing OZ Minerals at an enterprise value of A$9.6 billion, is expected to deliver significant value creation for both BHP and OZ Minerals shareholders, BHP says, explaining that OZ Minerals shareholders would receive an offer price significantly above trading levels and average broker price targets, prior to BHP’s initial proposal on August 5, 2022. At the same time, BHP shareholders would gain increased exposure to future-facing commodities, adding copper and nickel resources that are essential to support the global megatrends of decarbonisation and electrification.

The deal would also create a South Australian copper basin, which, according to BHP, could unlock potential operational synergies due to the proximity of OZ Minerals’ Carrapateena and Prominent Hill operations with BHP’s existing Olympic Dam asset (pictured) and Oak Dam development resource.

The West Musgrave project, meanwhile, will add a large greenfield nickel option to BHP’s Nickel West premier nickel sulphide resource position in Western Australia.

BHP has now entered into a Confidentiality and Exclusivity Deed with OZ Minerals in relation to the revised proposal. This has seen OZ Minerals grant BHP four weeks to undertake exclusive confirmatory due diligence and negotiate a binding SIA reflecting the key terms of the revised proposal. The four-week period is expected to commence on or around November 21, 2022.

BHP CEO, Mike Henry, said: “BHP’s proposal represents a highly compelling offer for OZ Minerals shareholders, providing certainty at a time of macroeconomic uncertainty and market volatility, and increasing risks for the industry.

“The combination of BHP and OZ Minerals’ assets, skills and technical expertise provides a unique opportunity not available under separate ownership, with complementary resources including the Oak Dam exploration prospect and existing facilities within close proximity, backed by BHP’s strong balance sheet, capital discipline and commitment to sustainable development.”

OZ Minerals Managing Director and Chief Executive Officer, Andrew Cole, said: “BHP’s revised proposal is a clear reflection of OZ Minerals’ unique set of highly strategic, quality assets in quality jurisdictions and an enviable multi-generational growth pipeline of copper and nickel
assets in strong demand due to global electrification. We look forward to working with BHP in a collaborative way to progress the revised proposal in the best interests of OZ Minerals’ and its stakeholders.”

OZ Minerals turns down BHP’s A$25/share cash offer

OZ Minerals says it has rejected an unsolicited, conditional and non-binding indicative proposal from BHP to acquire all shares in the company for A$25/share ($17.3/share) in cash, valuing the company at an reported A$8.34 billion.

Having assessed this proposal, which represents a 13.1% premium to the volume weighted average price (VWAP) of OZ’s share price for the six months prior, the Board has unanimously determined that the offer significantly undervalues OZ Minerals and, as such, is not in the best interests of shareholders.

For its part, BHP points out in a separate press release that the consideration represents an “attractive premium” of 32.1% to OZ Minerals’ closing price of A$18.92/share on August 5 and 41.4% to OZ Minerals’ 30-day VWAP of A$17.67/share up to and including August 5.

OZ Minerals says the proposal is subject to a number of conditions including:

  • The completion of extensive financial, legal, technical and operational due diligence over a proposed six-week timeframe;
  • Various financial assumptions;
  • A unanimous recommendation of the OZ Minerals Board; and
  • Entry into a scheme implementation agreement subject to a range of conditions including no material adverse change, regulatory, shareholder and court approvals and conduct of business restrictions.

OZ Minerals says the Board has been advised by BHP that it has accumulated an interest in OZ Minerals shares via derivative instruments amounting to an interest of less than 5%.

OZ Minerals Managing Director and Chief Executive Officer, Andrew Cole, said: “We have a unique set of copper and nickel assets, all with strong long-term growth potential in quality locations. We are mining minerals that are in strong demand particularly for the global electrification and decarbonisation thematic and we have a long-life resource and reserve base. We do not consider the proposal from BHP sufficiently recognises these attributes.”

In coming to its decision, OZ Minerals says the Board considered that the proposal does not adequately compensate shareholders for:

  • The unique nature of OZ Minerals’ core business which represents a high-quality portfolio of copper and nickel assets, located in a Tier-1 mining jurisdiction with long mine lives, first quartile cost positioning and extensive strategic optionality;
  • The unique investment proposition which OZ Minerals provides as the only primary copper company in the ASX 100;
  • The low carbon intensity of OZ Minerals’ assets relative to its peers with a defined and market- leading plan for further decarbonisation to meet our target of net zero Scope 1 and 2 operational emissions by 2030;
  • The high-quality nature of OZ Minerals’ growth projects which include the West Musgrave project (final investment decision scheduled for H2 2022), the Carrapateena Block Cave and the Prominent Hill Extension which together are expected to generate significant production growth over the next five years;
  • The strong long-term outlook for both the copper and nickel markets underpinned by increasing geological scarcity, global electrification and accelerating decarbonisation, to which OZ Minerals is highly leveraged; and
  • The strong and consistent returns that the OZ Minerals management team has delivered with a total shareholder return of circa-145% over the past five years.

In addition to the above, OZ Minerals would deliver significant synergies and other benefits to BHP which the Board considers are not reflected in the value of BHP’s indicative proposal.

Among there are the operational synergies in both South Australia (between Olympic Dam, Carrapateena and Prominent Hill) and in Western Australia (between Nickel West and West Musgrave).

BHP says the cash offer it has made would deliver immediate value to OZ Minerals shareholders and de-risk any value which may (or may not) eventually be reflected in the company’s share price.

BHP CEO, Mike Henry, said: “Our proposal represents compelling value and certainty for OZ Minerals shareholders in the face of a deteriorating external environment and increased OZ Minerals operational- and growth-related funding challenges.

“We are disappointed that the Board of OZ Minerals has indicated that it is not willing to entertain our compelling offer or provide us with access to due diligence in relation to our proposal.”

BHP Nickel West eyes wind power potential as Northern Goldfields Solar Project kicks off

Construction is now underway on one of the world’s largest off-grid mining solar and battery energy storage systems being built by TransAlta to help power BHP Nickel West’s Mt Keith and Leinster operations.

The Northern Goldfields Solar Project, which was announced last year, includes a 27.4 MW solar farm at Mt Keith, a 10.7 MW solar farm and a 10.1 MW battery at Leinster, and will be integrated into TransAlta’s Northern Goldfields remote power grid.

The project, which will replace power currently supplied by diesel and gas, will help BHP Nickel West reduce Scope 2 emissions at its Mt Keith and Leinster operations by 12%, resulting in an estimated reduction of 54,000 t/y of CO2-e.

The construction phase of the project is set to create more than 100 direct and indirect jobs in the Goldfields and Perth regions, and is expected to produce its first solar power by November 2022.

The project aims to employ Traditional Owners from the Tijwarl Native Title Holders following TransAlta’s contractor, juwi, awarding Cundaline Resources with the primary civil contractor role on the project. Cundaline Resources is an Aboriginal business whose owners include members of the Tjiwarl Aboriginal Corporation.

BHP Nickel West Asset President, Jessica Farrell, said BHP was meeting its commitment to deliver sustainable low carbon nickel to its customers, a product that is in high demand to power batteries and electric vehicles.

“The Northern Goldfields Solar Project is BHP’s first off-grid large-scale renewable energy project across our global operations and, significantly, will remove the equivalent of up to 23,000 combustion engine cars from the road every year, supporting our greenhouse gas reduction targets,” Farrell said.

“It is also very exciting that following years of close engagement with the Tjiwarl Native Title Holders, our project has contracted the services of a local Aboriginal business, boosting opportunities for people in the local community and across the northern Goldfields generally.”

TransAlta also unveiled today it had entered into an agreement with BHP to identify potential wind sites for a 40-50 MW wind farm, which would connect to TransAlta’s northern grid and reduce Scope 2 emissions at BHP’s Mt Keith and Leinster operations by an estimated further 30 per cent.

Adding wind will increase renewable energy supply to support BHP’s growth and to further each company’s sustainability goals, BHP said.

TransAlta Australia Managing Director, Kelvin Koay, said the construction phase of the solar and battery farm was an exciting step for the project.

“The Northern Goldfields Solar Project is TransAlta’s first renewable energy project in Australia and is an important element of our Clean Electricity Growth plan. This project contributes to achieving TransAlta’s target of a 75% GHG emissions reduction over 2015 levels by 2026 and 2050 carbon neutrality goal. As a company, we have a strong decarbonisation track record having already achieved a 61% emissions reduction since 2005.

“We’ve had a long-standing partnership with BHP since the 1990s and we welcome the opportunity to support BHP in meeting its carbon emission targets and in enhancing its competitiveness as one of the lowest carbon nickel miners in the world.”

Monadelphous banks more work with Rio Tinto and BHP

Monadelphous Group Limited says it has secured new contracts and contract extensions in the resources sector totalling approximately A$110 million ($80.1 million).

The company has secured a 12-month extension to its existing contract with BHP Iron Ore for the provision of general maintenance services for shutdowns, outages and minor capital works at the Mt Whaleback, Jimblebar, Eastern Ridge, Mining Area C and Yandi mine sites located in the Pilbara region of Western Australia.

Monadelphous has also been awarded several new contracts with Rio Tinto in the Pilbara under its sustaining capital projects panel agreement for:

  • The construction of new hawser rails and upgrades to the existing dolphins at Cape Lambert A and B wharves. The work, which includes design, fabrication, supply and installation, is expected to be completed by July 2023; and
  • The upgrade of conveyor gravity take-up systems at East Intercourse Island and Cape Lambert, with work expected to be completed in the September quarter of 2022.

In addition, Monadelphous has also secured a 12-month extension to its existing mechanical and electrical maintenance, shutdown and project services contract across BHP’s Nickel West operations in Western Australia.

BHP and TransAlta agree on solar, battery power system for Mt Keith and Leinster

BHP and its power partner in the Goldfields of Western Australia, TransAlta, are to build two solar farms and a battery storage system to help power the Mt Keith and Leinster nickel operations.

This will help BHP reduce emissions from electricity use at Mt Keith and Leinster by 12%, based on financial year 2020 levels.

The Northern Goldfields Solar Project will include a 27.4 MW solar farm at Mt Keith and a 10.7 MW solar farm and 10.1 MW battery at Leinster, and will displace power currently supplied by diesel and gas turbine generation, BHP said.

This will result in an estimated reduction of 540,000 t of CO2e over the first 10 years of operation. This is the equivalent of removing up to 23,000 combustion engine cars from the road every year, according to BHP.

BHP commissioned the solar farms and battery to be built, owned, and operated by TransAlta as part of the Power Purchase Agreement (PPA) extension signed in October 2020. Construction will commence in the December quarter, is expected to take 12-14 months and, at its peak, will employ over 100 people on site.

BHP Nickel West, Asset President, Eddy Haegel, said: “This is the first large-scale onsite solar farm and battery that BHP has commissioned at any of its global operations.

“The Northern Goldfields Solar Project will further improve our position as one of the lowest carbon nickel miners in the world. It will reduce emissions from electricity use at Mt Keith and Leinster by 12%, reduce fuel costs and improve the reliability of our electricity supply with the addition of the battery storage system.

“This announcement follows the nickel supply agreement we signed with Tesla last week. Sustainable low carbon nickel is essential for our battery and electric vehicle customers.”

TransAlta Corporation President and Chief Executive Officer, John Kousinioris, said: “We are proud to be supporting BHP’s emissions reduction targets and sustainability goals through the expansion of our renewable generation footprint into Australia.”

The partnership will contribute to BHP’s medium-term target to reduce Scope 1 and 2 emissions from our operated assets by at least 30% from financial year 2020 levels by its 2030 financial year.

The project is subject to final Western Australia state government approvals.

BHP and Tesla to collaborate on battery supply chain sustainability

BHP has agreed to supply Tesla Inc with nickel from its Western Australia operations, in addition to looking at how the two companies can collaborate on ways to make the battery supply chain more sustainable.

The supply agreement will see nickel from BHP’s Nickel West asset in Western Australia, one of the most sustainable and lowest carbon emission nickel producers in the world, BHP says, head to Tesla for use in its electric vehicles and battery storage systems.

BHP Chief Commercial Officer, Vandita Pant, said: “Demand for nickel in batteries is estimated to grow by over 500% over the next decade, in large part to support the world’s rising demand for electric vehicles.

“We are delighted to sign this agreement with Tesla Inc and to collaborate with them on ways to make the battery supply chain more sustainable through our shared focus on technology and innovation.”

This latter collaboration will focus on end-to-end raw material traceability using blockchain; technical exchange for battery raw materials production; and promotion of the importance of sustainability in the resources sector, including identifying partners most aligned with BHP and Tesla Inc’s principles and battery value chains, BHP said.

BHP will also collaborate with Tesla Inc on energy storage solutions to identify opportunities to lower carbon emissions in their respective operations through increased use of renewable energy paired with battery storage, it added.

BHP Minerals Australia President, Edgar Basto, said: “BHP produces some of the lowest carbon intensity nickel in the world, and we are on the pathway to net zero at our operations. Sustainable, reliable production of quality nickel will be essential to meeting demand from sustainable energy producers like Tesla Inc.

“The investments we have made in our assets and our pursuit of commodities like nickel will help support global decarbonisation and position us to generate long-term value for our business.”

BHP and Risen Energy to increase renewable use at Kwinana nickel refinery

BHP has signed a renewable power purchasing agreement (PPA) to supply up to 50% of its electricity needs at the Kwinana nickel refinery from the Merredin Solar Farm in Western Australia.

The agreement will help BHP reduce emissions from electricity use at the refinery by up to 50% by 2024, based on financial year 2020 levels.

The agreement with Risen Energy is for 10 years from February 1, 2021. This will effectively displace an estimated 364,000 t of CO2e over the life of the contract. This is the equivalent of removing 11,200 combustion engine cars from the state’s roads every year.

This is the first renewable energy PPA signed by BHP in Western Australia and follows renewable agreements covering BHP’s operations in Queensland in 2020 and Chile in 2019.

BHP Nickel West, Asset President, Eddy Haegel, said: “This contract will further increase the sustainability of the nickel produced by Nickel West. It will reduce the refinery’s electricity emissions by 50%, diversify our energy supply, and reduce the refinery’s electricity bill.

“Nickel is a future-facing commodity that is essential to creating the high performing lithium ion batteries used in battery electric vehicles (BEVs). Consequently, the demand for nickel and especially the nickel produced by Nickel West is set to grow dramatically. The sustainable production of nickel is also essential to meet this future demand as the customers purchasing BEVs want to know that the inputs to the manufacturing of these vehicles are also sustainable.

“Nickel West is already one of the most sustainable nickel producers in the world but has committed to significantly reduce CO2 emissions further.

“This contract, combined with our high quality nickel deposits, and our integrated value chain further improves our position as one of the lowest carbon nickel miners in the world.”

Risen Energy Australia, Vice General Manager, John Zhong, said: “We are proud to sign this agreement with BHP Nickel West. This agreement will bolster current and future Western Australian renewable projects. We look forward to welcoming many more clean energy partnerships to power manufacturing, minerals processing and other Western Australian industries.”

The contract will contribute to BHP’s medium-term, science-based target to reduce scope 1 and 2 emissions by 30% by 2030.

The 132 MW Merredin Solar Farm is made up of 354,452 solar panels and is West Australia’s largest completed solar farm. It has an output of 274 GWh/y of electricity. This is enough green energy to power approximately 42,000 Western Australian homes.

BHP Nickel West to reduce emissions with Southern Cross Energy contract extension

BHP has executed a 15-year contract extension to its power purchase agreement (PPA) with energy provider Southern Cross Energy (SCE) for the supply of electricity to its Nickel West operations in the Goldfields of Western Australia.

The agreement extends the current arrangement to 2038, giving Nickel West access to all electricity produced by SCE.

Nickel West Asset President, Eduard Haegel, said the PPA also provided Nickel West with the additional ability to integrate renewable electricity generation, including solar and wind, with energy storage technologies to meet its emissions reduction targets and deliver lower carbon, sustainable nickel to its customers.

Study phases for renewable energy supply and carbon emissions reduction under the extended PPA are underway, including an 18.5 MW solar photovoltaic farm at Nickel West’s Leinster and Mount Keith operations, supported by a battery energy storage system. A 17 MW waste heat steam turbine system at the Kalgoorlie smelter is also being evaluated to provide low-emissions electricity from furnace heat recovery, BHP said.

The combined projects have the potential to reduce Nickel West’s Scope 2 electricity greenhouse gas emissions by up to 15% by 2023, based on 2020 levels.

“These projects contribute to the first phase of our emissions reduction strategy, as we continue to evaluate plans for additional renewable energy supply to decarbonise our nickel operations,” Haegel said.

“We are at the beginning of an energy revolution that will transform our world and materially increase demand for nickel. BHP Nickel West is well placed to provide our nickel units sustainably, and with one of the lowest carbon footprints.”

BHP has committed to a science-based target of a 30% reduction in carbon emissions from 2020 levels by 2030, with a long-term target of net zero operational emissions by 2050.

“Our integrated value chain and the sulphide nature of our nickel deposits makes Nickel West one of the lowest carbon emitters in the industry and gives BHP a global advantage in the sustainable production of nickel,” Haegel said.

Coates Hire bags BHP Nickel West contract

One of Australia’s largest equipment hire companies, Coates Hire, has secured an estimated A$25 million ($17.7 million) contract with BHP’s Nickel West division.

The five-year contract will ensure the Coates Hire team can “add value” by providing safe and sustainable solutions through our its industrial services offerings, including equipment hire, tool management and maintenance, telemetry, day to day operations, short-and long-term hire, planned shutdowns, major shutdowns, and project works, Coates Hire said.

“Our experience on various mine sites across the nation will hold our people in good stead as we begin working at BHP’s Nickel West locations,” Murray Vitlich, Coates Hire CEO, said.

Nickel West is a fully integrated mine-to-market nickel business with over 3,500 employees and contractors. It has open pit, as well as underground, operations, along with concentrators, a smelter and refinery, all located in Western Australia.

Lycopodium to lead PFS for battery materials refinery project

Queensland Pacific Metals (QPM) has appointed Lycopodium Minerals Pty as the Lead Engineer for the prefeasibility study on the Townsville Energy Chemicals Hub (TECH) project in Queensland, Australia.

Pure Minerals, the parent company of QPM, said: “With the acquisition of QPM being approved by shareholders and in the process of being finalised, Pure Minerals is excited to launch its planned battery materials refinery as the Townsville Energy Chemicals Hub.”

The TECH project will produce nickel and cobalt sulphate chemicals required for the battery energy storage sector, with QPM immediately commencing the PFS for a 600,000 t/y battery materials refinery producing approximately 25,000 t/y of nickel sulphate and 3,000 t/y of cobalt sulphate and other valuable co-products, Pure Minerals said.

The previous scoping study envisaged annual primary production of around 25,400 t/y of nickel sulphate and 3,000 t/y of cobalt sulphate (containing 5,760 t of nickel and 630 t of cobalt), alongside some 221,000 t/y of hematite, 8,700 t/y of alumina and 4,600 t/y of magnesium oxide. This came with construction capital costs of $297 million.

Lycopodium Minerals Pty is a subsidiary of well-regarded engineering company, Lycopodium, which has experience applicable to the TECH project, according to Pure.

This includes:

  • Being highly active in the battery metals space, having undertaken many feasibility studies for clients in nickel, cobalt, lithium and graphite;
  • Completing a feasibility study for Direct Nickel Projects Pty or a nominal processing plant using the DNi Process™ (a pilot plant example from CSIRO pictured), which the TECH project will be using, and;
  • Completing feasibility studies for other nickel projects incorporating downstream processing to produce battery chemicals, including BHP’s Nickel West project and Cleanteq’s Sunrise project.

The key responsibilities for Lycopodium under its contract with QPM are process, process services and utilities design and engineering; preparation of project capital and operating cost estimates; and compilation of the PFS report, including integration of studies relating to other work packages.

Lycopodium has also agreed to accept shares in Pure Minerals as consideration for around 20% of its estimated fees, according to Pure Minerals.

The PFS is expected to be completed in the September quarter.

Lycopodium Minerals Managing Director, Rod Leonard, said: “The outlook for battery metals is positive and Lycopodium is well positioned to carry out this body of work, having completed a wide range of studies for major, mid-tier and junior clients in this space.”