The Fortescue Ltd (ASX: FMG) share price is making moves today after the company announced that it is acquiring Alta Copper.
Fortescue is known for its iron ore mining operations in Western Australia and was established in 2003. It has grown to be a leading mining company across the globe. It also has a green energy and decarbonisation segment, with a focus on green hydrogen and green ammonia projects.
Fortescue acquisition of Alta Copper
Today, Fortescue announced that it has entered into a binding agreement to acquire the remaining 64% of Alta Copper, with Fortescue already owning 36% of the company.
The deal is subject to approval by shareholders and the British Columbia Supreme Court. Fortescue said that the transaction is targeted to close in the March 2026 quarter.
If everything gets the rubber stamp of approval, it will see that Alta Copper shareholders receive $1.40 per share. This is a 50% premium to Alta Copper’s 30-day volume weighted average price (VWAP). This share price implies a total equity value of $139 million for Alta Copper.
What is Alta Copper?
Alta Copper is a copper mining company which is focused on its Canariaco project located in Northern Peru. Alta Copper said that Canariaco has 91 square kilometers of highly prospective land.
The Canariaco project has reported mineral resource of 1.1 billion tonnes at 0.42% copper equivalent grade. With 900 million tonnes at a 0.29% copper equivalent grade.
Alta Copper preformed a preliminary economic assessment in June 2024 and outlined that there is potential for a long-life copper operation.
What does this mean for the Fortescue share price?
Moving into copper mining is probably a good move for Fortescue, with the increasing demand for copper in AI development. Copper is used in data centres, telecommunications networks, smart phones and more.
The big ASX mining companies are wanting to get a slice of that growing demand for copper. BHP Group Ltd (ASX: BHP) also recently took interest in acquiring a copper miner.
The Fortescue share price is down around 1.3%, however it has shown more resilience today when compared to the rest of the sector, with BHP down around 2.8% and Rio Tinto Ltd (ASX: RIO) down around 2%.
If I were a Fortescue shareholder I would be pleased with the company diversifying into acquiring a slice of the copper mining pie.
However, ASX mining shares are known for their cyclical nature. The Fortescue share price is up over 20% since the beginning of the year. Nobody has a crystal ball, but I would want to keep an eye out for a lower point in the commodity price cycle before buying Fortescue shares. There are other ASX dividend shares I would consider for today.
