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Heavy machinery is seen at First Quantum Minerals’ Frontier copper mine in Fungurume, southern Democratic Republic of Congo in this file photo.

© Katrina Manson / Reuters/Reuters

First Quantum Minerals Ltd. has started the countdown on its $5.1-billion hostile takeover offer for Canadian rival Inmet Mining Corp., taking the bid to create a "top five" copper producer directly to shareholders.

The $72-a-share offer was sweetened twice after Inmet, the owner of the massive Cobre Panama copper project, rebuffed friendly approaches by First Quantum at $62.50 in October and $70 in November.

"The clock starts ticking now, today," First Quantum president Clive Newall said Wednesday, three weeks after announcing the company's intention to go hostile.

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First Quantum wants to get its hands on Cobre Panama, the $6.2-billion project Inmet is building in Central America, which will be the biggest mine in the region's history.

The bid is a bet that demand for copper has even further room to grow after a decade of ravenous consumption by No. 1 consumer China that pushed prices to record highs last year of more than $4.50 (U.S.) a pound. On Wednesday, copper was trading at about $3.67 a pound.

Inmet has not commented on the current bid but it has rejected earlier offers from First Quantum as inadequate and highly conditional and the company appears determined to secure a higher bid than First Quantum's or develop the project on its own.

The Cobre Panama project is well known to the global copper community, meaning First Quantum may have to face down rival bids to consummate a takeover. At least a dozen companies have visited the site over the past three years as Inmet tried to attract a joint venture partner, experts say, although the field will likely have been thinned after some major companies pulled back from the market in the global financial crisis.

Africa-focused First Quantum had signalled in earlier approaches the possibility of a higher offer if Inmet management were willing to give it access to confidential company data, but Mr. Newall said that is now off the table.

"Our offer is our offer," he said.

First Quantum, a company known for its adept in-house engineering squad, thinks it can build Cobre Panama cheaper and quicker than Inmet, which has already contracted out much of the work on the mine.

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It did not go into details in its circular about how it would do that, but it did criticize Inmet's financing plans. In a letter accompanying the circular, First Quantum Chairman Philip Pascall said Inmet's $2 billion (U.S.) high-yield debt adds $170-million to annual project costs, for example. He described a $1-billion deal to sell gold from the project to Franco-Nevada Corp. – applauded by investors as an endorsement of the project – as a lost opportunity.

Toronto-based Inmet will now have 15 days to respond to the offer circular.

In a statement on Wednesday, Inmet chairman David Beatty said the board had formed a special committee to review the offer and assess whether it compensates shareholders for the value of Cobre Panama now and once it is in production.

He advised Inmet shareholders to take no action on the bid until the board can supply an opinion.

"In addition, Inmet and its financial advisers are conducting a process to investigate all potential strategic alternatives that may enhance shareholder value, some of which pre-date the First Quantum offer," he said of the bid that is open unitl 5 p.m. (ET) on Feb. 14, 2013, unless extended or withdrawn.

Cobre Panama will produce some 300,000 tonnes of copper a year, making it one of the world's largest undeveloped copper deposits, on par with mines in key copper geographies in Chile and Peru.

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Among Inmet's options now are a "just-say-no" defence or a public auction where it opens the company's books and invites higher offers from outside bidders. The company said on Wednesday that it hired Longview Communications, an outside communications firm that specializes in adversarial situations.

The offer is not subject to any financing condition or First Quantum shareholder approval.

Mr. Newall says talks with major Inmet shareholders – many of them also holders of First Quantum – show that most are in favour of the takeover. "After that of course, it's all about price. We believe $72 is the right price, and we have reason to think it's the right price to get this transaction across the line."

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