BHP Group Ltd (ASX: BHP) shares could be on the move in the coming days following a potential bidding war. This comes as mining tycoon Andrew "Twiggy" Forrest's Wyloo Metals placed a superior offer for an overseas nickel miner.
At Tuesday's closing bell, the BHP share price finished down 2.04% to $38.39.
Battery competition intensifies
As demand for electric battery raw materials accelerates, a raft of companies is lobbying to get a piece of the action.
According to The Age, Wyloo Metals has put forward a proposal to acquire Canadian-listed nickel miner Noront Resources (TSXV:NOT). The latter has accepted the $391 million takeover but is giving BHP just 5 days to match or outbid Wyloo.
As such, Wyloo has indicated it will pay C$0.70 (A$0.76) per Noront share, outbidding BHP's C$0.55 (A$0.59) offer made in July. It's worth noting that Wyloo is already Noront's biggest shareholder with a 37.25% stake as of last month.
The ongoing tussle between both companies for Noront's assets highlights the pursuit among miners to secure key battery making ingredients. Particularly, demand for nickel and lithium is expected to surge by the strong uptake of electric vehicles.
Noront has ownership or a controlling interest in all the major discoveries in the so-called "Ring of Fire". This is located in the James Bay Lowlands of Northern Ontario.
In addition, the company's Eagle's Nest deposit is considered to be the largest high-grade nickel discovery in Canada. The site is projected to begin commercial production of nickel in 2026 with a mine life of 11 years.
If the current deal goes ahead, Wyloo Metals will provide a loan of up to C$23 million (A$24.88 million) to Noront. This will involve financing the termination payment to BHP along with other transaction-related costs.
About the BHP share price
Over the past 12 months, BHP shares have climbed 5% higher but have lost almost 10% in 2021. The company's share price trekked upwards until August before plummeting to November 2020 lows.
BHP commands a market capitalisation of roughly $113.26 million, making it the third most valuable company on the ASX.
