Australia’s BHP Group Ltd, one of the world’s largest miners, on Wednesday offered 75 cents in cash for each share of Toronto’s Noront Resources Ltd., as a bidding war erupts for control of the mineral claims on land around northern Ontario’s remote James Bay lowlands, colloquially known as the Ring of Fire.
That offer beats a bid of 70 cents per share that Wyloo Metals Ltd, backed by Australian billionaire Andrew Forrest, placed on Monday. Even as BHP offers $419 million in cash for Noront — and Wyloo could still raise its own offer before shareholders vote on whether to accept a proposal on Nov. 9 — a larger question looms about whether its projects in the Ring of Fire would ever be developed into mines.
Although Noront’s stock reached 81 cents per share on Wednesday afternoon, the company had turned in a lackluster performance in recent years, and was trading at 19 cents per share in January as investors weighed the many challenges and obstacles its projects in the Ring of Fire face.
Cutoff from the rest of Canada, its projects would require billions of dollars in investments in roads and other infrastructure — with taxpayers expected to foot some of the bill. Plus, an array of First Nations hold claims to the land, and there is growing opposition in some communities to the project. Lastly, there are questions about whether the mineral deposits would be profitable to mine.