Ann: BHP: OZ Minerals Board Intends to Recommend BHP's Proposal, page-94

From page 1 of that OZ Minerals Limited research report dated 24 November 2022, I extract the following:

ASX mining becomes less diversified
The loss of OZL from the ASX will, in Canaccord's view, result in reduced optionality for investors to gain specific commodity exposure, with OZL absorbed into what is essentially a business connected to global steel markets (77% of BHP's EBITDA during 2022). Most of the remaining ASX large cap mining EBITDA is also heavily skewed to the outlook of steel markets - RIO (73% of EBITDA during CY21), FMG (100% during FY22) and S32 (43% during FY22).

This is, of course, part of the reason for the bid from BHP to "[increase] exposure to future facing commodities" and what investors lose from the market.




Extract from the above AFR article:

BHP is positioning for the shift to electric vehicles and renewable energy. In its pursuit of OZ Minerals, BHP lifted a takeover bid by 13% during mid-November to win over the OZ Board with a $9.6 billion [indicative non-binding] offer, in a strategy to lift BHP's exposure to copper.

JPMorgan predicts the metal could make up 40% of BHP’s earnings by 2030, from 25% during 2024.

JP Morgan analyst Lyndon Fagan said overall, the push by BHP to add battery minerals to its portfolio is a positive sign because it is tilting its portfolio further toward copper. He said long-term prices for iron ore and coal were materially lower than spot prices and there was not enough production growth throughout the business to offset this. But OZ Minerals is “quite the opposite”.

Fagan said the OZ takeover could add almost 10% to BHP’s overall net profit later this decade. OZ would add about 1 per cent to BHP’s total profits in the near term, but should all of OZ’s projects be fully developed, that jumps substantially.


Cheers

These are only my thoughts and it does not constitute investment advice. Before acting on any information you read and before making any financial or investment decisions, you should always consult your advisor(s) or other relevant professional experts.