First Quantum wins $5 billion battle for copper rival Inmet
By Julie Gordon and Clara Ferreira-Marques
TORONTO/LONDON (Reuters) - First Quantum Minerals (FM.TO: Quote) said on Friday it had won enough shareholder support to take over Inmet Mining IMN.TO, winning a C$5.1 billion hostile battle for control of one of the world's largest untapped copper deposits.
The deal - the latest in an industry that has concentrated to leave ever fewer pure copper miners behind - creates one of the world's biggest producers of the red metal.
It also transforms First Quantum, which until now has made more than 80 percent of its profits in Zambia.
First Quantum, for its part, faces arguably its toughest test to date in Inmet's $6.2 billion Cobre Panama project, the jewel in the miner's crown.
Cobre Panama is one of the biggest untapped copper deposits in the world, but also one of the most expensive - in an untested country with little mining history.
"They've certainly shown themselves to be very efficient and effective project managers in the past, successfully executing on what much larger firms have struggled with," said Daniel Rohr, a mining analyst at Morningstar.
First Quantum, which cut its teeth in Zambia as the country re-privatized its mines in the 1990s, is betting its hands-on approach to construction, procurement and supervision will help slash costs at Cobre Panama while keeping to deadlines.
"There will be a hiatus of three to six months, whatever it takes to do a comprehensive reassessment and renegotiations where required. But our build time will be much shorter," First Quantum President Clive Newall told Reuters. Continued...