Nickel Crisis Jolts Mining Company IGO’s Takeover Plan – by David Winning (Wall Street Journal – March 13, 2022)

SYDNEY—An uncontrollable rise in nickel prices that triggered a crisis on the London Metal Exchange is now jolting one company’s takeover plans on the other side of the world.

IGO Ltd., an Australian base metals producer, had planned to buy nickel miner Western Areas Ltd. for around $800 million after terms for the transaction were agreed in mid-December. All appeared to be progressing smoothly as Western Areas directors had recommended that its shareholders vote in favor at a coming meeting.

On Monday, however, IGO said the deal would likely be delayed as Western Areas and its advisers are assessing whether the rally by nickel prices is a short-term blip in the market or indicative of a more deep-rooted shift.

“In response to the recent significant nickel price volatility (which led to the temporary suspension of nickel trading on the London Metal Exchange on March 8), Western Areas and the Independent Expert are continuing to consider the implications, if any, on nickel market fundamentals and expectations for medium to long-term nickel prices,” IGO said.

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