Australia's Wyloo bid for Canada's Noront shows battery metal scramble

Orford Mining

03/06/2021 13:32

By Jeff Lewis
    TORONTO, June 3 (Reuters) - A fight over Canadian
nickel-copper miner Noront Resources  NOT.V  shows the scramble
for battery metals is accelerating, with global miners racing to
secure supply ahead of an expected surge in demand from electric
vehicles.
    Wyloo Metals, a unit of Australian mining magnate Andrew
Forrest's Tattarang investment group, plans an unsolicited bid
for the remaining shares of the Canadian miner valuing Noront at
C$133 million ($110 million), or C$0.315 per share. Wyloo is
Noront's top shareholder, with a 23% stake as of December.
    Noront adopted a poison pill and said it has yet to receive
a formal offer. The company declined further comment.
 urn:newsml:reuters.com:*:nL3N2NE3XB
    At stake is the future of Noront's early-stage Eagle's Nest
deposit, 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, with an initial
mine life of 11 years. 
    The bid signals renewed interest in Canada's largely dormant
Ring of Fire, a cluster of minerals that Canadian leaders
frequently compare to the country's oil sands for their untapped
economic potential. 
    "It's a once-in-a-generation opportunity to set Canada up as
a responsible, reliable producer of battery-grade nickel," said
Wyloo head Luca Giacovazzi. 
    Development of the Ring of Fire, about 1,000 miles north of
Toronto, has so far fallen short of lofty expectations. 
    One of the most advanced projects, a chromite mine, was put
on ice in 2013 due to risks associated with developing basic
infrastracture, including roads and power lines. 
    Plans for new access roads are underway but remain years
from development, said John Mason, mining project manager for
the economic development agency in Thunder Bay, the region’s
most populous municipality. 
    Wyloo has said it aims to accelerate development in the
region. 
    Ontario is geographically close to U.S. automakers in
Michigan and Ohio, and General Motors Co  GM.N , Ford Motor Co
 F.N  and Stellantis NV  STLA.MI  have all announced plans to
make electric vehicles at factories in the province. 
    Canada is expected to benefit from a U.S. drive to secure EV
minerals from ally countries.  urn:newsml:reuters.com:*:nL5N2N663Y  urn:newsml:reuters.com:*:nL2N2NC32W
    Nickel makes batteries energy-dense so cars can run farther
on a single charge. Demand is forecast to double by 2030, driven
by use in electric vehicles.
    Wyloo's planned bid for Noront follows its C$25 million
joint-venture agreement with Canada's Orford Mining  ORM.V 
covering the West Raglan nickel project in Nunavik, Quebec.
    Wyloo also said it aims to strengthen battery metal supply
chains in Canada and study potential for a ferrochrome plant in
Ontario while targeting C$100 million in contract awards to
local First Nations. 
    Wyloo head Giacovazzi told Reuters those commitments reflect
a long-term approach to developing battery-grade nickel in
Canada for the burgeoning EV market. 
    He compared northern Ontario to Western Australia's Pilbara
region, rich in iron ore and home to miners like BHP Group
 BHP.AX , Rio Tinto  RIO.AX  RIO.L  and Forrest's Fortescue
Metals Group  FMG.AX .
    "I think if you went to the Pilbara 20 years ago you would
never think that you would have major mining companies and the
infrastructure that exists there today," he said. 


 (Reporting by Jeff Lewis; Editing by Nick Zieminski)
 ((Jeff.Lewis@thomsonreuters.com; +1 647 200 7236))