The BHP Group Ltd (ASX: BHP) share price is having a tough start to the day.
In morning trade, the mining giant's shares are down 1.5% to $41.31.
Image source: Getty Images
Why is the BHP share price falling?
Investors have been selling BHP and other mining stocks on Tuesday following a pullback in commodity prices.
This has offset some big news out of the miner this morning.
After being snubbed by Anglo American plc (LSE: AAL), the Big Australian has found another way to gain additional exposure to copper.
According to the release, BHP and Lundin Mining have agreed to jointly acquire 100% of Filo Corp for C$4.1 billion (A$4.5 billion) through a Canadian plan of arrangement.
Filo Corp owns 100% of the Filo del Sol (FDS) copper project, which is located in the Vicuna district of Argentina and Chile. The large-scale, high-grade sulphide deposit at the FDS project is considered to be one of the most significant copper discoveries globally in recent decades.
BHP's total cash payment for the proposed transaction is expected to be approximately US$2.1 billion.
In addition, BHP plans to acquire 50% of the Josemaria copper project from Lundin Mining for cash consideration of approximately US$690 million.
Joint venture
The two parties have also agreed to form a 50:50 joint venture. This will see each party contribute their respective 50% interests in Filo Corp and the Josemaria project into the joint venture.
Management notes that the joint venture will create a long-term partnership between BHP and Lundin Mining to jointly develop an emerging copper district with world-class potential.
Commenting on the acquisition, BHP's CEO, Mike Henry, said:
The proposed transaction builds on a multi-year relationship between BHP and the Lundin Group of companies through which we have developed a strong understanding of the resource potential of the Vicuña district and the possible pathways for development of the Filo del Sol and Josemaria projects.
This transaction aligns with BHP's strategy to acquire attractive early-stage copper projects and enter into strategic partnerships with parties where complementary skills and experience can deliver long-term economic and social value. The joint venture with Lundin Mining will advance the development of the Vicuña district, which offers the potential to become a major contributor to the economy of Argentina for decades to come. At the same time, by partnering with Lundin Mining, BHP is continuing to invest in the growth of a robust mining sector in Canada.
