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OZ Minerals to invest $1.1 bln in West Musgrave copper-nickel project


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Australian miner OZ Minerals Ltd said on Friday it would invest about A$1.7 billion ($1.13 billion) to develop the West Musgrave copper-nickel project in Western Australia, as it looks to cash in on increasing demand for battery metals.

The final investment decision comes amid

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media reports

that the world’s largest listed miner BHP Group might be awaiting OZ’s decision on West Musgrave to hike its takeover offer, more than a month after its $5.8 billion bid was rebuffed.

Adelaide-based OZ in early August said BHP’s offer was undervaluing and opportunistic as it aimed at boosting its copper output to capitalize on soaring demand for its core metals.

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BHP did not immediately respond to a Reuters query on whether it was considering hiking its offer.

OZ’s West Musgrave project is expected to produce on average about 35,000 tonnes of nickel and about 41,000 tonnes of copper every year for the first five years, the final feasibility study showed.

The miner, which is targeting first production from there in the second half of 2025, said the project will be capable of processing 13.5 million tonnes per year.

OZ recorded annual production of 125,486 tonnes of copper in 2021 and expects to produce between 120,000 and 135,000 tonnes in 2022.

“Investment approval for West Musgrave unlocks one of the largest undeveloped nickel projects in the world and, with expected lowest quartile costs, it is set to generate about A$9.8 billion undiscounted cashflow over its 24-year operating life,” OZ Chief Executive Officer Andrew Cole said in a statement.

The miner will be taking up an A$1.2 billion loan to support development of the project. The company also said it was considering the option to sell a minority stake in the project to take benefit of the “significant in-bound interest” it received recently. ($1 = 1.5053 Australian dollars) (Reporting by Sameer Manekar in Bengaluru; Editing by Shinjini Ganguli and Maju Samuel)



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