Would-be lithium miners eye Chile’s Maricunga Salar makes play for Newcrest

takeover offer.

BY CECILIA JAMASMIE

Newmont Mining (NYSE: NEM; TSX: NGT), the world’s largest gold producer, is seeking to build a global gold superpower by approaching Australia’s top miner of the yellow metal, Newcrest Mining (ASX, TSX: NCM), with a US$17 billion

If successful, the deal would be one of the biggest in Australian history, though initial feedback from analysts and shareholders suggests that Newmont will have to improve its bid.

It would also increase Newmont’s footprint in copper, a metal which has soared in popularity and price recently due to its use in renewable energy and electric vehicles as economies decarbonize.

The offer is already 4.7% higher than a previous proposal rejected by Newcrest, as the Denver, Colo. gold giant disclosed in a statement.

Newcrest said on Feb. 6 it was considering the proposal. The miner is in the midst of finding a new chief executive officer as previous boss Sandeep Biswas stepped down in December.

BMO’s analyst Jackie Przybylowski said in a research note on Feb. 7 that while the offer will likely come as a surprise to the market, given Newmont’s generally conservative approach to growth recently, it should be viewed as positive.

Newcrest’s assets fit well with Newmont’s existing portfolio, she noted. Additionally, the larger size of the combined company is consistent with Newmont’s recent comments around responsibly pursuing size, Przybylowski wrote.

Goldman Sachs also reacted positively to the news, highlighting that the integration of Newcrest into Newmont’s portfolio would provide the U.S. gold producer with a path to “immediately and substantially” lift its output, considering the company’s “flattish production outlook” for the next two years on a standalone basis.

“[The deal also] increases [Newmont’s] exposure to copper and expands its footprint in locations such as Australia and Canada in particular, that the miner is comfortable with,” the bank said in a note to clients.

Morningstar analyst Jon Mills noted the offer may push other major gold miners to join the race for Newcrest, given the quality of its assets.

“We think Newcrest is now in play, but if a deal is to be done, it will likely need to be at a higher price,” Mills wrote. Eliminating one potential rival

BY TOM AZZOPARDI

Despite tight restrictions, an Australian junior is planning to begin construction of Chile’s first new lithium project in decades.

Home to the world’s largest lithium reserves, Chile’s exports of the mineral have soared in recent years as producers Albemarle (NYSE: ALB) and SQM (NYSE: SQM) have rushed to expand capacity to meet red-hot demand from the electric vehicles industry. Exports rose 47% to 220,000 tonnes last year as prices soared to record levels above US$50,000 a tonne while the value of its exports rose almost ninefold to US$8.6 billion.

But despite this massive expansion, many fear Chile could be missing the boat.

Having lost its position as the world’s top lithium exporter to Australia, it could soon be overtaken by neighbouring Argentina. Multinationals, including Rio Tinto (NYSE: RIO; LSE: RIO; ASX: RIO), Posco Corp., and Zijin Mining Group are set to invest billions of dollars over the next decade. With six projects already in construction, production could exceed 300,000 tonnes annually by 2028, up from just 28,000 tonnes in 2021, according to U.S. investment bank JP Morgan.

In contrast, according to the Chilean Copper Commission, a government agency, production in Chile is set to plateau at less than 240,000 tonnes by the middle of the decade.

The problem is tight restrictions on production of the mineral. Albemarle and SQM both operate from state-owned claims over the Salar de Atacama, home to the world’s richest lithium reserves, but subject to production quotas and production royalties of up to 40%.

Chile has other salt-flats (although none as big and rich as Atacama) but Cold War-era controls reserving lithium production for the state have slowed exploration. So far, the government has

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