Search on
News Title
News Details
Reports/Directory
Glossary
Title_head
Inmet Mining snubs USD 5 billion takeover bid by First Quantum
354 times viewed.
Tuesday, 04 Dec 2012
EmailButton
Pdf_button
coming-soon

First Quantum Minerals Limited offered USD 4.9 billion to acquire Inmet Mining Corporation a bold declaration from one of Canada’s largest copper miners that the commodities supercycle has room to run.

Inmet rejected the bid describing it as highly conditional and not in shareholders interests but analysts said First Quantum could return with a higher offer for one of the world’s largest copper projects in development.

Toronto based Inmet is developing the USD 6.2 billion Cobre Panama project that will produce some 300,000 tonnes of copper a year for 30 years putting it on a scale with major mines in Chile and Peru, the world’s largest producers of the metal.

Inmet revealed that it was the second offer from First Quantum in a month underscoring global miners’ convictions that copper demand will remain strong into the future, despite slowing growth in China and other major markets. Copper has been one of the most in demand commodities of the past decade, driven by breakneck development in China as it built power grids and entire cities in its urbanization drive.

First Quantum’s overture for Inmet amounts to a bet that the so called super-cycle for commodities, particularly copper will persist even if the pace has cooled. It also signals that the world’s copper miners have not given up on the race to source new production as aging mines around the world reach the end of their useful life.

Mr John Hughes an analyst with Desjardins Securities Inc said that “Cobre Panama is in the running to be one of the few large scale copper projects to be developed over the next five to seven years. If Vancouver-based First Quantum wants to win Inmet, the bidding will likely go higher.”

Mr Hughes said that “I don’t know what number they say yes at. I would suggest a potential hostile bid generally would look at somewhere around 10% higher. However First Quantum while fond of early stage projects is not known to overpay for assets. First Quantum and Inmet have not held official talks.”

Source – The Globe and Mail.com

(www.steelguru.com)

This is alternative content.

Arcelor
More Metals News