Shares of First Quantum Minerals Ltd. (TSX: FM) jumped up by about 12 per cent Thursday following news of the company rejecting an informal takeover bid from the mining giant Barrick Gold (NYSE: GOLD).
Barrick recently approached First Quantum with the offer in an attempt to enlarge its copper portfolio but it was declined and there are no ongoing formal negotiations, according to media reports.
In response to an inquiry, Barrick told Reuters that the company does not comment on market speculation.
Barrick’s attempt to expand its copper resources through an acquisition like this comes as the demand for the metal is expected to grow significantly. A report from the market intelligence firm ReportLinker in April indicated that the global copper market would be worth approximately US$77.6 billion more in 2030 than it is now.
Another report from India’s Acumen Research and Consulting in December last year indicated that the market would be worth US$444.6 billion by 2030, ascending by US$155.6 billion from what it was valued at in 2021.
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First Quantum announced at the end of March that it would be partnering with Rio Tinto (NYSE: RIO) (ASX: RIO) (LON: RIO) to develop the La Granga project in Peru, one of the world’s largest undeveloped copper resources.
The company’s Cobre Panama operation in Central America accounts for about 1.5 per cent of the world’s copper production, generating about 300,000 tonnes of the metal annually.
The current price of copper is US$3.89 per pound and the metal’s value hasn’t changed significantly in the past year.
In 2020, equipment manufacturing accounted for 32 per cent of copper utilized globally and building construction accounted for 28 per cent. The remainder was used for infrastructure, industrial and transportation applications — according to Natural Resources Canada.
First Quantum stock dropped slightly Friday by 0.48 per cent to $33.14 on the Toronto Stock Exchange.
Barrick shares rose by 1.49 per cent to US$16.74 on the New York Stock Exchange.
rowan@mugglehead.com
