Two Of The World's Biggest Mining Companies Are Locked in A Bidding War To Buy Miners

With the rapid growth of the market for new energy vehicles, nickel, a key raw material for electric vehicle batteries, is becoming increasingly hot. The recent head-to-head battle in the capital markets between two mining giants to buy a nickel miner illustrates this point.

Australian mining giant BHP Billiton and iron ore giant Fortescue Metals Group Ltd. Wyloo Metals, owned by billionaire founder Andrew Forrest, has both targeted Canadian nickel miner Noront Resources Ltd.

Andrew Forrest has raised his bid for Noront to beat BHP Billiton, according to media reports. Wyloo Metals has offered C $0.70 a share in cash for Noront Resources Ltd., topping BHP's C $0.55 a share offer made in July.

Wyloo said in a statement that its bid had a better chance of success because it already owns about 37.5 percent of Noront and does not intend to support BHP's bid.

BHP said it would wait for a response from Noront's board before deciding on its next move. The miner also pointed out that Wyloo's proposal was not a formal offer and that it had not entered into any binding agreement with Noront and that its offer was the only one formally made to Noront shareholders.

Noront also said in a statement on Tuesday that it continued to support BHP's bid, adding that Wyloo's proposal was "non-binding" and not a formal "offer" and that "there can be no assurance that Wyloo's proposal will result in a transaction."

In May, Wyloo Metals offered C $0.315 a share for the rest of Noront's outstanding shares and Noront adopted a "poison pill" to block the takeover.

Global miners are keen to increase investment in nickel, and Noront Resources is active in northern Ontario's Ring of Fire, considered one of Canada's largest undeveloped nickel deposits.

Why is nickel so popular?

The rise of electric cars has led to a surge in demand for battery metals, and nickel is a key component of lithium-ion batteries. The metal provides more energy for batteries and allows manufacturers to reduce the use of cobalt. Cobalt is more expensive and the supply chain is opaque.

特斯拉总裁伊隆麝香拉斯维加斯t year called on mining companies to mine more nickel, saying tesla would give them big long-term contracts if they mined the metal efficiently and in an environmentally friendly way.

Last month, BHP announced it had signed a Nickel supply deal with Tesla to sell Nickel mined by its Nickel West unit in Western Australia.