BY MINING.COM
Canada’s Nevsun Resources (TSX, NYSEMKT:NSU) said Tuesday that Zijin Mining had received approval from Chinese and Canadian authorities for its proposed friendly $1.41 billion-takeover bid of the Vancouver-based miner.
Both the go-ahead granted by China’s State Administration of Foreign Exchange (SAFE) and the support by the Canadian Investment Canada Act (ICA), said Nevsun, were the final regulatory conditions for the completion of the deal, first announced in September.
Beijing-backed Zijin Mining’s offer beat an earlier hostile bid by Lundin Mining (TSX:LUN), and it’s the latest move by the gold, copper and zinc miner to expand overseas.
In recent years, Zijin has snatched assets from Africa to Australia. In August, the company spent $1.26 billion for a 63% in Serbia’s largest copper mining and smelting complex RTB Bor.
Nevsun’s flagship asset is the Bisha copper-zinc mine in Eritrea, but it’s also developing the Timok copper and gold project in Serbia, one of the very few that wasn’t already controlled by a big miner.
The fight for Nevsun highlighted how miners are scrambling to acquire copper reserves amid forecasts that supply of the metal significantly outstrip supply from 2020, due to increasing demand for power generation and electric vehicles (there’s 300 kg of copper in an electric bus and nine tonnes per wind farm megawatt).
Nevsun’s Timok copper-gold project is also one of a handful of projects expected to come online in the near future. According to Colin Hamilton, director of commodities research at BMO Capital Markets, the current copper pipeline is the lowest seen this century, both in terms of number and capacity.
“After delivery of Cobre Panama (with the main ramp early next year) we are left with a gap until we see the next batch of 200ktpa-plus projects in 2022-23. This is when the likes of Kamoa, Oyu Tolgoi Phase 2, and QB2 are likely to offer meaningful supply growth,” Hamilton said in April.
Zijin’s offer remains subject to customary closing conditions.
