Harmony Gold’s MAC Copper takeover gets regulatory nod

[Ben Graham]

Harmony Gold’s (JSE: HAR, NYSE: HMY) acquisition of MAC Copper (NYSE: MTAL, ASX: MAC) has cleared the final regulatory hurdle after Australia’s Foreign Investment Review Board (FIRB) gave its approval of the $1 billion deal.

The FIRB approval, says MAC Copper CEO Mick McMullen, is “another significant step towards implementation of the transaction as all requisite regulatory approvals have now been obtained.” It follows last week’s approval of the deal by the South African Reserve Bank.

The transaction still requires approval from investors, satisfaction of certain restructuring conditions, and sanction by the court. Shareholders of MAC are expected to cast their votes at meetings scheduled for August 29 in Jersey and online.

As disclosed in its announcement in late May, Harmony would pay $12.25 for MAC’s common shares, a 20% premium at the time, for a total transaction value of $1.03 billion.

On Monday, MAC Copper traded at $12.14 apiece on the NYSE, with a market capitalization of $1 billion.

Copper shift

The acquisition of MAC represents a strategic shift by South Africa’s leading gold producer to diversify its portfolio with critical minerals such as copper.

MAC’s main asset is the CSA mine in New South Wales, which currently ranks amongst the highest-grade copper mines in Australia and is one of its oldest copper operations, with a history stretching back nearly 150 years. At 1.9 km, it is also one of the country’s deepest underground operations.

The mine and facility were previously held by Glencore. In March 2022, MAC won a bid to acquire the asset for $1.1 billion.

The transaction expands the company’s existing copper footprint in Australia, where it entered in 2022 with the Eva copper project in Queensland. The Johannesburg-based miner expects to begin production at Eva by 2028.

With CSA and Eva combined, Harmony aims to produce 100,000 tonnes of copper annually within five years.