BHP eyes copper, nickel projects as it bypasses lithium

Ioneer

08/03/2023 20:42

By Divya Rajagopal
       TORONTO, March 8 (Reuters) - BHP Group Ltd  BHP.AX  on
Wednesday said it remains committed to growing its portfolio of
copper and nickel projects but is not interested in the lithium
market, which it believes is well supplied.
    The comments echo those the world's largest mining company
made in the past year and come as lithium prices have been
sliding amid demand worries. Analysts are expecting lithium
prices to plunge by 25% in total this year, largely due to an
expected slowdown in China's EV market as government subsidies
wane. 
    "We still don't see the demand-supply equation of lithium to
be as fundamental as copper and nickel," Sonia Scarselli of BHP
Xlpor, the company's division that invests in junior mining
companies, told Reuters on the sidelines of the Prospectors and
Developers Association of Canada (PDAC) mining conference in
Toronto. "For us, lithium will remain flat."
    The bet is a bit of a counterintuitive one among BHP's
global mining peers. Rio Tinto Ltd  RIO.AX  RIO.L , for example,
paid $825 million in late 2021 for a lithium project in
Argentina and is trying to build a lithium mine in Serbia.
    Glencore Plc  GLEN.L  is the second-largest shareholder in
Li-Cycle Holdings Corp  LICY.N , a recycler set to become one of
the largest U.S. lithium producers by next year. And Sibanye
Stillwater Ltd  SSWJ.J  has agreed to help ioneer Ltd  INR.AX 
develop a Nevada lithium project.
    BHP expects global copper and nickel supplies to remain
below demand as few new mines for either metal are coming online
in the near future.
    The company has invested $500,000 each in Nordic Nickel Ltd
 NNL.AX , Tutume Metals, Asian Battery Minerals, Impact Minerals
Ltd  IPT.AX , Red Ox Copper, Bronzite Corp, Kingsrose Mining Ltd
 KRM.AX , each of which are exploring nickel and copper deposits
across the globe. 
    BHP last year also invested $40 million in Kabanga Nickel,
which is developing a nickel mine in Tanzania, and is helping
Rio to develop the massive Resolution Copper mining project in
Arizona. 
    The Kabanga investment, BHP's first in Africa since 2015,
was part of what Chief Executive Mike Henry described as a
willingness to move into "tougher jurisdictions." That move came
after BHP lost out on a 2021 bid to buy Canadian junior nickel
miner Noront Resources.    
    Elsewhere, BHP has committed to invest C$12 billion ($8.7
billion) to build a potash mine in Canada's Saskatchewan
province as global population growth fuels greater demand for
the fertilizer. 
    Supply interruptions from Belarus and Russia, the two
largest potash producers, make Canada well positioned" to fill
the supply gap, Rad Udd, president of BHP Americas, said in an
interview.     
($1 = 1.3798 Canadian dollars)

 (Reporting by Divya Rajagopal; editing by Ernest Scheyder)
 ((divya.rajagopal@thomsonreuters.com;))