Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

KAZ Minerals has recommended that its shareholders accept Nova Resources’ (Bidco’s) raised cash offer of £3.7bn ($5.04bn) to acquire the Kazakh copper miner.


In an announcement to the London Stock Exchange on Feb 4, the company said that the process of accepting this offer will be sent to KAZ’s shareholders on or after Feb 8.


Under the agreement, KAZ, which is a publicly-traded company on the London Stock Exchange, will operate as a private company after the acquisition. Part of the proceeds of the sale, according to the announcement, will go towards the development of the Baimskaya copper project in Russia—an operation that has required more than anticipated capital from KAZ.


Oleg Novachuk, chairman, Bidco, noted that the implementation of the Baimskaya project, which is touted to be one of the most sought after “undeveloped copper assets,” is fraught with risks that can be mitigated with additional capital, which will be provided through this acquisition.


Some of the risks enumerated in the announcement include supply-demand dynamics of the copper market, future pricing of the red metal, project delivery risks, and reliance on the Russian government to make the necessary infrastructure improvements. 


In 2020, KAZ’s total copper production fell to 305,700mt from 311,400mt in 2019, though it surpassed its 2020 guidance by 2pc. Copper sales also fell by 5.2pc last year.



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