Anglo American, a leading UK mining company, has announced a major strategic overhaul, rejecting a £34 billion takeover bid from rival BHP and opting for a self-directed restructuring. The company plans to sell or demerge significant parts of its business, including the renowned De Beers diamond operation and its platinum division, to concentrate on core areas like copper, premium iron ore, and crop nutrients.
This decision comes as demand for copper, a key component in electrical conduction, surges due to the global shift towards renewable energy sources and electric vehicles. While a deal with BHP would have created the world's largest copper producer, it faced potential competition hurdles due to overlapping operations in Chile and Peru.
Anglo American's new strategy aims to capitalise on this growing copper demand while streamlining its portfolio and reducing costs. The company will retain its Kumba Iron Ore business and crop nutrients operations, but will reduce investment in its Woodsmith potash mine beneath the North Yorkshire Moors.
The proposed demerger of the platinum mining arm, Amplats, is already underway, with 3,700 job cuts in progress. The future of De Beers, in which the Botswanan government holds a 15% stake, will be determined through a sale or demerger process.
Anglo American CEO Duncan Wanblad described these actions as the most radical changes to the company in decades, positioning it to benefit from the global clean energy transition and potentially lowering costs by $1.7 billion.
The company's rejection of BHP's increased takeover offer was based on the belief that it significantly undervalued the firm and was not in the best interest of shareholders. Anglo American aims to implement these changes in a way that respects employees, host communities, and countries, particularly in South Africa, where the company plays a significant role in supporting national priorities.
Anglo American's share price fell by 2.6% to £26.30 on Tuesday following the announcement. The company's strategic shift marks a pivotal moment in its history, with significant implications for the global mining industry and the ongoing transition to clean energy.
