While there are many things to be wary of in mining, one is domestic champions going offshore. Can Pilbara Minerals become a two-trick pony?
Already a subscriber?West Australian lithium miner Pilbara Minerals is very good at one thing. In an industry where no one wants to be a one-trick pony, can it be good at two?
And synergies between farflung assets brought together by M&A deals are usually scant, as Rio Tinto boss Jakob Stausholm reminded us a fortnight ago. The deal values Latin Resources at $560 million; it’s early stages with a definitive feasibility study under way.The best thing you can say about it is that it is a countercyclical move; Pilbara Minerals is buying when others are retreating , making it a “big surprise”, as Euroz Hartleys analyst Trent Barnett says.It is using scrip, not cash, offering Latin Resources shareholders a relatively small chunk of the combined group , swapping expensive scrip for cheap resources and reserves.
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