Anglo American Announces Plans to Leave Diamond, Platinum, Coal Mining to Avoid BHP Acquisition Plans

By Jose Resurreccion

May 14, 2024 04:13 AM EDT

Anglo American Announces Plans to Leave Diamond, Platinum, Coal Mining to Avoid BHP Acquisition Plans
Gigantic Komatsu 930 trucks remain parked at the Los Bronces copper mine of the Anglo American Corporation, 60 Km from Santiago, on December 27, 2011.
(Photo : ARIEL MARINKOVIC/AFP via Getty Images)

Anglo American announced Tuesday (May 14) that it was abandoning its diamond, platinum, and coal mining operations to thwart an acquisition offer by BHP Group, the world's largest miner. 

Anglo American Rejects BHP Bid

Reuters reported that the decision was made a day after the London-listed mining firm rejected a BHP offer worth $43 billion, saying it continued to undervalue the company and was "highly unattractive" for its shareholders. 

According to Anglo American's statement, the company was already in the process of divesting its steelmaking coal assets, divesting or demerging its platinum and diamond operations in South Africa, and exploring options for its nickel mines. 

In particular, Anglo CEO Duncan Wanblad said that venturing into a "radically simpler business" would result in a "sustainable incremental value creation." 

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BHP Believes Shareholders From Both Companies Would Benefit From Acquisition

On the other hand, BHP CEO Mike Henry said they would continue to push for the merger, saying that it would "deliver [a] significant value" for all its shareholders.

BHP has until May 22 to make another offer to Anglo American, which analysts say would only be rejected again unless it would consider the sentiment of the latter's shareholders. 

Meanwhile, reported that Anglo American's shareholders urged the company to accelerate the release of its turnaround plan.

Given S&P Global's projection of a potential doubling in copper demand by 2035, the situation is becoming increasingly critical due to the possibility of supply shortages. The acquisition would result in the formation of the largest copper mining company globally, accounting for approximately 10% of the total global output.

READ MORE: Mining Giants Ordered to Pay Nearly $10 Billion Over Brazil Dam Disaster That Killed 19 People

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