Mining giants Anglo American and BHP have been at the center of industry headlines recently, with Anglo American rejecting BHP's $39 billion takeover bid. The proposed merger would have created the world's largest mining company and a significant player in the copper market, which is experiencing increased demand due to its role in clean energy technologies such as electric vehicles and batteries.
Anglo American, based in London and South Africa, has been valued for its majority stake in De Beers diamond company and its large copper plants in Chile and Peru. The company's platinum arm, Anglo American Platinum, and Kumba Iron Ore were also part of the proposed deal.
BHP Billiton made an unsolicited approach to Anglo American on April 25, 2024. The offer valued each Anglo share at 25.08 pounds and required Anglo American to demerge its holdings in Anglo American Platinum Limited and Kumba Iron Ore Limited as part of the proposed restructure. However, the requirement was found highly unattractive by Anglo American's board, which dismissed it as opportunistic.
Anglo American is well positioned to benefit from the energy transition with copper representing 30% of its total production and value-accretive growth options in copper and other structurally attractive products. The company's Chairman Stuart Chambers believes that Anglo American's shareholders stand to benefit significantly from the expected value appreciation as the full impact of these trends materializes.
BHP, based in Australia, has not yet responded to Anglo American's rejection. Analysts believe that this could be an opening shot in a broader phase of consolidation within the sector and speculate that BHP may present a fresh bid for Anglo American or consider targeting British-Australian miner Rio Tinto.
The mining industry is experiencing significant changes as companies seek to shore up copper supplies in anticipation of projected shortages and the metal's key role in the energy transition. The demand for copper is expected to continue growing due to its use in electric vehicles, power grids, and wind turbines.
