Australia’s Wyloo bid for Canada’s Noront shows battery metal scramble

(Reuters) — A fight over Canadian nickel-copper miner Noront Resources (NOT.V) shows the scramble for battery metals is accelerating, with global miners racing to secure supply ahead of an expected surge in demand from electric vehicles.

Wyloo Metals, a unit of Australian mining magnate Andrew Forrest’s Tattarang investment group, plans an unsolicited bid for the remaining shares of the Canadian miner valuing Noront at C$133 million ($110 million), or C$0.315 per share. Wyloo is Noront’s top shareholder, with a 23% stake as of December.

Noront adopted a poison pill and said it has yet to receive a formal offer. The company declined further comment.

At stake is the future of Noront’s early-stage Eagle’s Nest deposit, billed by Wyloo as the largest high-grade nickel discovery in Canada since the Voisey’s Bay nickel find in the eastern province of Newfoundland and Labrador, with an initial mine life of 11 years.

The bid signals renewed interest in Canada’s largely dormant Ring of Fire, a cluster of minerals that Canadian leaders frequently compare to the country’s oil sands for their untapped economic potential.

“It’s a once-in-a-generation opportunity to set Canada up as a responsible, reliable producer of battery-grade nickel,” said Wyloo head Luca Giacovazzi.

Development of the Ring of Fire, about 1,000 miles north of Toronto, has so far fallen short of lofty expectations.

One of the most advanced projects, a chromite mine, was put on ice in 2013 due to risks associated with developing basic infrastracture, including roads and power lines.

Plans for new access roads are underway but remain years from development, said John Mason, mining project manager for the economic development agency in Thunder Bay, the region’s most populous municipality.

Wyloo has said it aims to accelerate development in the region.

Ontario is geographically close to U.S. automakers in Michigan and Ohio, and General Motors Co (GM.N), Ford Motor Co (F.N) and Stellantis NV (STLA.MI) have all announced plans to make electric vehicles at factories in the province.

Canada is expected to benefit from a U.S. drive to secure EV minerals from ally countries.

Nickel makes batteries energy-dense so cars can run farther on a single charge. Demand is forecast to double by 2030, driven by use in electric vehicles.

Wyloo’s planned bid for Noront follows its C$25 million joint-venture agreement with Canada’s Orford Mining (ORM.V) covering the West Raglan nickel project in Nunavik, Quebec.

Wyloo also said it aims to strengthen battery metal supply chains in Canada and study potential for a ferrochrome plant in Ontario while targeting C$100 million in contract awards to local First Nations.

Wyloo head Giacovazzi told Reuters those commitments reflect a long-term approach to developing battery-grade nickel in Canada for the burgeoning EV market.

He compared northern Ontario to Western Australia’s Pilbara region, rich in iron ore and home to miners like BHP Group (BHP.AX), Rio Tinto (RIO.AX)(RIO.L) and Forrest’s Fortescue Metals Group (FMG.AX).

“I think if you went to the Pilbara 20 years ago you would never think that you would have major mining companies and the infrastructure that exists there today,” he said.