By Clara Denina and Anirban Sen
TORONTO/NEW YORK (Reuters) – Canada’s Lundin Mining (OTC:) Corp and mining giant BHP Group (NYSE:) are considering a possible joint bid for Filo Corp, people familiar with the matter told Reuters on Friday.
Talks between Lundin and BHP are at an early stage, the sources said, adding that there is no guarantee the two companies will work together on a bid for Filo.
Filo’s Canadian-listed shares rose as much as 12% on the news on Friday. The shares posted some gains, closing at C$27.98, giving the company a market capitalization of C$3.44 billion ($2.52 billion).
The consideration for a possible takeover comes as ongoing work is underway to merge the Josemaria project belonging to Lundin Mining with the Filo del Sol project, one of the sources said, adding that combining the infrastructure between the mines would cost between $5 billion and $8 billion. billion. The sources requested anonymity because the discussions are confidential.
According to recent regulatory filings and LSEG data, the Lundin family has a 32% stake in miner Filo Corp, while BHP has a 6% stake in the company. Filo focuses on the construction of the Filo del Sol project on the border between Chile and Argentina.
Lundin, BHP and Filo Corp did not immediately respond to a Reuters request for comment.
The deliberations over the deal come weeks after BHP walked away from a blockbuster $49 billion bid to acquire Anglo American (JO:), which rejected three proposed offers from its bigger rival over the course of six weeks.
The world’s largest miners are increasingly choosing to buy assets rather than build them for growth, given the rising costs of developing new mines and the expiration of regulatory approval deadlines .
The copper industry is expected to see near-term consolidation as the world’s biggest miners seek to increase access to a metal at the heart of the global shift to clean energy and electric vehicles, analysts said.
Bloomberg News reported earlier on Friday that Lundin had pitched BHP for a joint bid for Filo.
($1 = 1.3634 Canadian dollars)
