Hudbay Minerals HBM-T will entertain acquisition offers provided the price is right, otherwise companies are “wasting” their time, CEO Peter Kukielski said in an interview in Toronto.
TSX-listed Hudbay operates copper mines in Peru, Canada and the United States and is seen by analysts as one of the potential acquisition targets of large miners as they rush to secure copper supply for the transition toward electrification.
“We are a friendly company,” and the management and board are not against receiving an offer, Mr. Kukielski said. He added that if the company receives a pre-emptive offer it will go to board and the shareholders. “But if they undervalue our company, they are wasting our time.”
The US$22.5-billion ($29.8-billion) offer by Swiss miner and trading firm Glencore GLNCY to acquire the coal and copper assets of Canada’s Teck Resources TECK-B-T and rumours of First Quantum Minerals FM-T shunning a takeover offer from gold miner Barrick Gold ABX-T have put the spotlight on Canadian mining companies in this space.
However, Glencore’s offer to Teck has spurred up a call to keep Canadian assets in Canada.
Mr. Kukielski said there is a potential for some of the mid-size copper companies to come together to create one mega copper company. “I would certainly like to put them together,” he said.
Despite falling copper prices, the metal is seen as an essential commodity in future energy transition. With aging mines and newer mines taking at least a decade to come into production, the price of the commodity is expected to go up.
Analysts from RBC securities earlier this month said that the volatility in copper prices could create M&A opportunities and consolidation among copper miners.
In the past year, mining companies such as BHP Group Rio Tinto RIO-N have bought copper assets in Australia and Canada to bulk up their production.
For Hudbay the aim is to triple its copper production by the end of the decade, which it is planning to achieve through mergers or acquisitions and not by organic growth.