Noront Resources (TSX-V: NOT) it plans to negotiate directly with Australian billionaire Andrew Forrest鈥檚 Wyloo Metals on the company鈥檚 sweetened acquisition bid, which has reignited a long-dragged battle for the Canadian miner with BHP (ASX, LON, NYSE: BHP).
The world鈥檚 largest miner looked like the winner of the bidding war with Wyloo until Monday, when the private company submitted a C$1.10 per-share offer that trumped BHP鈥檚 bid of C$0.75 per Noront share.
Wyloo, the Toronto-based miner鈥檚 top shareholder, increased its offer to C$1.10 a share on Monday, valuing the miner at C$616.9 million ($481.28 million), 57% higher than its prior bid and outmatching BHP鈥檚 offer.
Earlier, BHP had regarding its support for the takeover of Noront as the two parties were unable to reach an agreement.
Noront did not provide any update on whether its board was changing its recommendation to shareholders to accept BHP鈥檚 offer, but did say the company was reviewing Wyloo鈥檚 latest proposal.
The two Australian mining companies have been engaged in a tug of war with competing offers for Noront since July. At stake is聽the takeover target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
Largest high-grade nickel discovery in Canada
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
Forrest, chairman and founder of iron ore producer Fortescue Metals Group (ASX: FMG), plans to lead a new board of directors at Noront if the takeover approach is successful.聽
Noront shares were up 35 cents on Tuesday at C$1.08 in early trading on the TSX Venture Exchange.
Nickel fever
The match 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 an adequate supply of聽battery metals ahead of an imminent surge in demand for 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 will 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�
The US EV giant聽inked in October a multi-year nickel supply deal聽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聽similar agreement with BHP.