...to me, copper's recent rise is like the oil's rise at the start of the Ukraine war, when market kept drumming the supply deficit narrative.
...It is all about DEMAND, period. Supply deficits is a longer term concern, and price running higher on the back of such concerns are likely to be shortlived when traders start focusing on the elephant in the room -Demand.
...Katusa Research has now sent a warning on China & Copper (see link below), copper may benefit from long term trends in electrification but in the short term, stay focus on China.
...which is why I said BHP may have got its timing wrong on Anglo American takeover proposal, and likely ending up paying a premium on goodwill. The higher they pay, the greater the dilution and likely lower the forward dividend/share.
...my thinking is that BHP sees a need to get bigger before they face a forthcoming huge class action suit later in the year (see below).
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BHP notes recent media commentary regarding the addition of new claimants to the United Kingdom group action complaint related to the Fundão Dam collapse.
BHP Group Limited and BHP Group (UK) Limited (formerly BHP Group Plc) are defendants to a group action brought by claimants in the English High Court seeking damages for alleged losses in relation to the Fundão Dam collapse in 2015 (the English Proceedings). The Fundão Dam was owned and operated by Samarco Mineracao S.A. (Samarco), a non-operated joint venture between BHP Billiton Brasil Ltda (BHP Brasil) (a subsidiary of BHP Group Limited) and Vale S.A (Vale). BHP Brasil and Vale each hold a 50 per cent interest in Samarco.
BHP filed its defence to the English Proceedings in December 2022 and denies the claims in their entirety. On 25 February 2023, a further claim was filed to add approximately 500,000 new claimants to the English Proceedings. Full details of the claims have not been received and the amount of damages sought in the English Proceedings remains unspecified.
As noted in BHP’s results for the half year ended 31 December 2022, the Group’s provision related to the Samarco dam failure is US$3.122 billion as at 31 December 2022. Further details of the Group’s provisions and contingent liabilities related to the Fundão Dam collapse are also set out in BHP’s financial statements for the full year ended 30 June 2022. Given the status of the English Proceedings, it is not possible to provide a range of possible outcomes or a reliable estimate of potential future exposures to BHP in connection with these proceedings.
BHP damages case grows to 700,000 claimants seeking up to £36bn
A compensation case against BHP over a 2015 mining disaster in Brazil has expanded to 700,000 claimants seeking damages of up to £36bn, making it the largest opt-in class action lawsuit ever brought in the UK.
The case has been deferred to October 2024/
In March 2023, 500,000 claimants joined the suit, bringing the total number of plaintiffs to over 700,000. In early May 2023, a London court rejected BHP's request to delay the lawsuit until mid-2025, granting a five-month deferral instead. The trial is now scheduled for October 2024.
