Fortescue Metals Group has successfully moved forward with its strategic push into the copper sector, with shareholders of the Peru-focused explorer Alta Copper voting decisively in favour of the Pilbara iron ore miner's takeover offer. This approval marks a significant milestone in Fortescue's ambitious foray into the red metal market, clearing a major regulatory and investor hurdle.
Shareholder Support Secures Copper Expansion
The shareholder vote, held on Tuesday, saw investors back Fortescue's binding agreement to acquire the remaining 64 per cent stake it did not already own in Vancouver-based Alta Copper. Fortescue had enticed shareholders with a compelling cash offer of $C1.40 per share, representing a substantial 50 per cent premium. This transaction values Alta Copper at approximately $C139 million, equivalent to $146 million in Australian dollars, with Fortescue committing about $C88 million, or $92.6 million, to complete the purchase.
Alta Copper's shares on the Toronto Stock Exchange have experienced a remarkable surge, climbing around 237 per cent over the past year, reflecting strong market interest in copper assets. The approval now paves the way for the deal to proceed to the Supreme Court of British Columbia for final approval, expected by the end of this week.
Strategic Focus on Peru's Cañariaco Project
At the heart of this acquisition is Alta Copper's Cañariaco copper project, located in Northern Peru. This 91 square kilometre tenure is considered highly prospective for copper deposits, aligning with Fortescue's strategy to diversify beyond iron ore. While the project is still in its early developmental stages, a preliminary assessment conducted by Alta in June 2024 indicated the potential for a long-life copper operation.
However, Fortescue will need to navigate a complex and multi-year process involving community engagement and regulatory approvals in Peru, as highlighted by Alta. This underscores the challenges inherent in developing mining projects in South America, where environmental and social considerations are paramount.
Global Copper Rush Driven by AI and Industrial Demand
The move comes amid a global scramble among major mining companies to secure new copper deposits. Copper is essential for electrical applications, industrial uses, and is increasingly in demand due to the anticipated artificial intelligence boom. Earlier this month, copper prices surpassed $US13,000 per tonne, fuelling further acquisition frenzies in the sector.
Fortescue's leadership has been vocal about its serious intentions in the copper space. Chief executive Dino Otranto emphasised in a recent quarterly update that the company is not merely dabbling in copper. He stated, "We're not doing this to create a small copper business to then move on. We want to be a significant 100,000 tonne per annum player in this space."
Integration and Future Development Plans
Gus Pichot, Fortescue's growth and energy chief executive, described the Cañariaco project as a "compelling opportunity" and noted that full ownership will provide the company with greater control over its development. He outlined that, subject to transaction completion, Fortescue's initial focus will be on integration planning, technical reviews, community engagement, and advancing studies to inform future development decisions.
In financial markets, Fortescue shares responded positively, rising over 1 per cent during afternoon trade to $21.75. Meanwhile, Alta Copper shares closed 6.3 per cent higher overnight at $C1.35, reflecting investor optimism about the deal's progression.
This acquisition positions Fortescue to capitalise on the growing global demand for copper, reinforcing its transition into a diversified resources giant with a foothold in one of the world's most critical commodities.
