BHP aims for global copper dominance with $60b Anglo American bid

BHP Group (ASX: BHP) has made a $59.74 billion takeover bid for British multinational mining company Anglo American with a view to forging the world’s biggest copper miner.

Under the terms of the all-share proposal, Anglo shareholders will be offered $48.17 per share following a spin-out of the company’s iron ore and platinum assets in South Africa, where BHP has no activities.

Anglo owns mines in countries including Chile, South Africa and Australia and has a current market value of approximately $52b.

It has a large copper operation based in South America with a production target of up to 790,000 tonnes for this calendar year.

BHP is currently the world’s largest listed miner with a market value of around $230b.

Anglo said its board was reviewing the “unsolicited, non-binding, and highly conditional combination proposal”, adding that there was “no certainty” a formal offer would be made before the cut-off date of 22 May 2024.

Largest copper producer

If the deal goes ahead, it would become one of the mining industry’s biggest mergers in many years and would push BHP ahead of its rivals as the world’s biggest copper producer.

It would also expand the company’s footprint in coking coal mining in Queensland’s Bowen Basin and boost its iron ore presence in Brazil.

“[This takeover] will increase our exposure to future-facing commodities through Anglo American’s world-class copper assets [and] complement our iron ore and metallurgical coal portfolios,” the company said in a statement.

Mining juggernaut

The proposed combination of BHP and the 107-year-old Anglo American is expected to create a juggernaut in copper mining and the world’s largest player in the space.

Industry sources suggest it would supply an estimated 10% of global output.

The deal would dwarf BHP’s $9.6b takeover of OZ Minerals last year, which aimed to widen its access to copper and nickel.

It also fits with the mining giant’s prediction that global copper demand will double.

Copper is considered a key raw material in the race to cut carbon emissions because it is essential in manufacturing components for renewable energy projects and electric vehicles.

Demand has climbed in recent years and is expected to rise by 20% globally by 2035.

World-class assets

BHP confirmed the proposal would give it access to Anglo American’s world-class copper assets.

It said the combined entity would have a “leading portfolio” of large, low-cost, long-life, tier-one assets focused on iron ore and metallurgical coal, as well as future-facing commodities including potash and copper.

Anglo’s other operations, including its diamond business, would be subject to a strategic review once the takeover had been finalised.