Hudbay CEO says company open to acquisition offers at right price

The Constancia mine, in Peru

Peter Kukielski

7th July 2023

By: Reuters


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TORONTO - Hudbay Minerals will entertain acquisition offers provided price is right, otherwise companies are "wasting" their time, CEO Peter Kukielski told Reuters in an interview in Toronto.

TSX-listed Hudbay operates copper mines in Peru, Canada and the United States and is seen by analysts as one of the potential acquisition targets of large miners as they rush to secure copper supply for the transition towards electrification.

"We are a friendly company," and the management and board are not against receiving an offer, said Kukielski. He added that if the company receives a preemptive offer it will go to board and the shareholders. "But if they undervalue our company, they are wasting our time".

The $22.5-billion offer by Swiss miner and trading firm Glencore to acquire for the coal and copper assets of Canada's Teck Resources and rumours of First Quantum Minerals shunning a takeover offer from gold miner Barrick Gold have put the spotlight on Canadian mining companies in this space.

However, Glencore's offer to Teck has spurred up a call to keep Canadian assets in Canada.

Kukielski said there is a potential for some of the mid-size copper companies to come together to create one mega copper company. "I would certainly like to put them together," he said.

Despite falling copper prices, the metal is seen as an essential commodity in future energy transition. With ageing mines and newer mines taking at least a decade to come into production, the price of the commodity is expected to go up.

Analysts from RBC securities earlier this month said that the volatility in copper prices could create M&A opportunities and consolidation among copper miners.

In the last year, mining companies such as BHP Group and Rio Tinto have bought copper assets in Australia and Canada to bulk up their production.

For Hudbay the aim is to triple its copper production by the end of the decade, which it is planning to achieve through mergers or acquisitions and not by organic growth.

Edited by Reuters



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