BHP (ASX, LON, NYSE: BHP) has begun talks with Australian billionaire Andrew Forrest鈥檚 Wyloo Metals concerning the imminent takeover of Canada鈥檚 Noront Resources (TSX-V: NOT), as part of a truce in the companies鈥� battle to acquire the nickel producer.
The world鈥檚 biggest miner last month sweetened its all-cash offer for Noront to C$0.75 per share, overtaking Wyloo鈥檚 C$0.70, which granted it the Toronto-based miner鈥檚 support.
鈥淏HP and Wyloo Metals have engaged in initial conversations and are considering a mutually beneficial arrangement regarding the acquisition of Noront by BHP,鈥� .
鈥淲yloo Metals is considering the potential of a mutually beneficial arrangement with BHP insofar as this arrangement can deliver greater deal certainty to Noront shareholders,鈥� the miner said in a separate statement.
BHP also extended the tender expiry for its takeover from November 9 to November 16.
At stake is聽Noront鈥檚聽early-stage Eagle鈥檚 Nest nickel and copper deposit in the 鈥楻ing of Fire鈥� in northern Ontario.聽The asset聽has been billed by聽Wyloo聽as the聽largest high-grade nickel discovery in Canada since the Voisey鈥檚 Bay nickel find in the eastern province of Newfoundland and Labrador. 聽聽
Eagle鈥檚 Nest is expected to begin commercial production in 2026 with the mine running initially for 11 years.聽
The mine鈥檚 start date has repeatedly been pushed back by Noront due to successive federal and provincial governments鈥� inability to consult and reach a unanimous聽agreement with First Nations聽in the area.聽
Nickel frenzy
The tug of war between the two Australian聽companies聽is聽the latest evidence of the rush global miners聽are聽in聽to聽secure supply of聽battery metals ahead of an imminent surge in demand from electric vehicles.聽
Nickel production would need to increase聽nearly fourfold聽to meet expected demand for electric and hybrid vehicles, the company estimates. Likewise, copper output would also need to grow exponentially to meet demand from renewable power generation, battery storage, electric vehicles, charging stations and related grid infrastructure.聽
Tesla boss Elon Musk has聽expressed worries聽about a聽looming nickel shortage. He聽pleaded with miners聽last year聽to produce more nickel, promising a 鈥済iant contract鈥� for supply produced efficiently and in an 鈥渆nvironmentally sensitive way.鈥澛�
Last month, the US EV giant inked a multi-year nickel supply deal with New Caledonia鈥檚聽Prony Resources. The contract guarantees聽it about 42,000 tonnes of聽the metal needed to produce the batteries that power聽its聽EVs.聽
Tesla also has a similar agreement with BHP.