Indonesia’s Salim family launches bumper $400 million bid for South Australian copper play Rex Minerals

Indonesia’s richest family has launched a $400 million knockout bid for a South Australian copper play as it seeks more of a metal seen as crucial to the energy transition.

The ASX-listed Rex Minerals on Monday disclosed that directors had unanimously recommended acceptance of a takeover offer by the Salim family’s MACH Metals Australia at 47¢ a share - a hefty 71 per cent premium to Rex’s closing share price on Friday.

The family’s $US10 billion ($14.8b) Salim Group straddles investments in food - including one of the world’s biggest makers of instant noodles - retail, banking, telecom and energy.

MACH already owns 15.8 per cent of Rex but wants to move to full ownership after pitching to the Rex board when the Australian company sought out interest from potential backers for the development of its $854m Hillside copper and gold project in South Australia.

MACH chief executive Ferdian Purnamasidi said the bid aligned with the company’s strategy to diversity its asset base as the world sought cleaner energy sources.

Given its effectiveness as a conductor of heat and electricity, copper is in high demand for wiring in everything from wind turbines, electricity networks and electric vehicles.

BHP, already big in copper, was chasing more of the metal when it unsuccessfully tried to entice Anglo American into a $US49 billion takeover in May.

MACH chief executive Ferdian Purnamasidi said the company’s offer for Rex was consistent with its strategy to diversify its asset base, which includes the Mt Pleasant coal mine in the Hunter Valley of NSW.

“Our strong focus on copper is critical to the energy transition process,” he said.

Rex shares leapt to reflect the bid price, trading 17¢ higher at 44¢ as at 10.15am. The offer values the group at $393m.

Rex chief executive Richard Laufmann said the MACH deal offered “certainty of value and a significant premium”.

“This transaction also represents a more certain outcome for wider stakeholders in Hillside, including the local community, the South Australian Government and Rex employees who will benefit from the financial strength and proven track record of MACH,” Mr Laufmann said.

The offer still has to be approved by the Foreign Investment Review Board and Rex shareholders. It is also conditional on the endorsement of Rex’s independent expert.

Hillside, 150km from Adelaide on the Yorke Peninsula, is fully permitted and, according to the company, “shovel-ready”.

It is said to be Australia’s biggest undeveloped copper deposit, with a mineral resource of 1.9 million tonnes of copper and 1.5 million ounces of gold.

Rex is also sitting on another 1.4 million ounces of gold at Hog Ranch, a former mine in Nevada in the US previously worked by Western Mining Corp. It has not been mined since 1992, but Rex considers the project in a mining friendly jurisdiction as an attractive, strategic fit with Hillside.