The Fortescue Metals Group Limited (ASX: FMG) share price is on the minds of investors today after another Andrew ‘Twiggy’ Forrest company, Wyloo Metals, all but buys up Canadian listed nickel miner Noront.
At the time of writing, shares in the iron-ore miner are trading for $14.57 – down 1.15%. For context, the S&P/ASX 200 Index (ASX: XJO) is 0.14% higher.
Let’s take a closer look at today’s news.
Why is Fortescue on everyone’s mind?
Twiggy’s Wyloo Metals, a wholly-owned subsidiary of Forrest’s investment company, Tattarang, will almost certainly acquire Noront for 70 Canadian cents per share. It trumps an offer from BHP Group Ltd (ASX: BHP) of 55 Canadian cents per share.
“The Noront board of directors has determined that Wyloo Metals’ proposal represents superior value for our shareholders, compared to the offer by BHP,” Noront chief executive Alan Coutts said.
Again, it should be stressed that Wyloo Metals and Tattarang are separate from Fortescue. Given the involvement of Andrew Forrest, however, it’s no surprise the Fortescue share price is also in the limelight.
According to The Age, the battle for Noront between the two mining giants is a signal of the “accelerating efforts” of resource companies to get ahead of the incoming electric vehicle revolution. Metals like nickel and lithium are essential in the manufacturing of electric vehicle batteries.
Noront has a significant claim in one of Canada’s largest potential mineral reserves, the largely undeveloped “Ring of Fire” region in northern Ontario. It’s an area Wyloo says it wants to develop into a “world-class Future Metals hub”. However, it seems to be having little effect on the Fortescue share price.
“The Ring of Fire is a long-term mining district with a present-day value that is impossible to accurately quantify,” Wyloo Metals chief executive Luca Giocavazzi said.
The deal is expected to be finalised around December. While BHP has the right to match Wyloo’s offer, this is not expected to occur.
Fortescue share price snapshot
Over the past 12 months, the Fortescue share price has dropped 13.3%. Year-to-date, shares in the company have depreciated a mammoth 41.2%. Its 52-week high is $26.58 per share and its 52-week low is $13.91 per share.
Fortescue Metals has a market capitalisation of about $45 billion.