Noront Resources (TSX-V: NOT) said on Tuesday it plans to negotiate directly with Australian billionaire Andrew Forrest’s Wyloo Metals on the company’s sweetened acquisition bid, which has reignited a long-dragged battle for the Canadian miner with BHP (ASX, LON, NYSE: BHP).
The world’s 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’s bid of C$0.75 per Noront share.
Wyloo, the Toronto-based miner’s 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’s C$0.75 per-share offer.
Earlier, BHP had ended talks with Wyloo 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’s offer, but did say the company was reviewing Wyloo’s 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 the takeover target’s early-stage Eagle’s Nest nickel and copper deposit in the ‘Ring of Fire’ in northern Ontario.
Largest high-grade nickel discovery in Canada
The asset has been billed by Wyloo as the largest high-grade nickel discovery in Canada since the Voisey’s Bay nickel find in the eastern province of Newfoundland and Labrador.
Eagle’s Nest is expected to begin commercial production in 2026 with the mine running initially for 11 years.
The mine’s start date has repeatedly been pushed back by Noront due to successive federal and provincial governments’ inability to consult and reach a unanimous agreement with First Nations in the area.
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.
Noront shares were up 35 cents on Tuesday at C$1.08 in early trading on the TSX Venture Exchange.
The match between the two Australian companies is the latest evidence of the rush global miners are in to secure an adequate supply of battery metals ahead of an imminent surge in demand for electric vehicles.
Nickel production would need to increase nearly fourfold 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.
Tesla boss Elon Musk has expressed worries about a looming nickel shortage. He pleaded with miners last year to produce more nickel, promising a “giant contract” for supply produced efficiently and in an “environmentally sensitive way.”
Last month, the US EV giant inked a multi-year nickel supply deal with New Caledonia’s Prony Resources. The contract guarantees it about 42,000 tonnes of the metal needed to produce the batteries that power its EVs.
Tesla also has a similar agreement with BHP.