OZ Minerals Ltd Gone, ASX Investors Saying Goodbye to Steady Stream of Dividends

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The $9.6 billion acquisition of OZ Minerals by BHP (ASX: BHP) solves several issues for the big Aussies but not for the smaller ones.

OZ Minerals

It gives the miner some leeway when considering a multi-billion dollar renovation of its Olympic Dam mine in South Australia.

OZL provides a fresh long-term feed source for its Nickel West business in Washington, which specialises in batteries.

For astute long-term OZ investors who will choose a cash reward in March or April of the following year, the $28.25 offer is a considerable windfall. Compared to the value of their shares in 2014, it will be almost eight times greater.

Does it, however, present problems for ASX investors?

OZ Minerals BHP News

Copper is a valuable commodity and a challenging industry. The ASX minus OZL of the copper cupboard now seems constrained.

Due to BHP’s success, the one copper stock that practically all fund managers recommend for the portfolio lost money.

Due to the lack of alternative-producing copper prospects, the sale of OZ Minerals could hurt ASX. However, the potential $1.75 compensation to settle OZ’s franking credits before the merger would be advantageous. While OZ Minerals exiting the ASX may be beneficial for junior copper stocks.

Canaccord head of mining research, Reg Spencer, said, “Given that BHP has just taken out our largest independent copper producer, there’s a lot of smaller earlier stage copper names, which could be interesting in a rising copper price environment.” 

There are other global problems affecting the said industry. Copper prices have been lowered during much of 2022 due to a slowdown in China’s economy. However, they are still at stable commercial levels.

The prognosis for supply for the upcoming year has been clouded by a political crisis in Peru, the second-largest producer in the world, and a conflict between Panama and its resident copper firm First Quantum. Physical premiums this year have reached nearly record high as supplies have been tighter.

Lastly, copper’s demand could spike up in the years to come as the energy industry also booms. 

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