GRAPH: What global copper mining’s top tier could look like

Last year, copper mining industry watchers were kept entertained by the prospects of a tie-up between BHP and Anglo American after the world’s top miner in May launched an unsolicited bid for the 108-year old company.The FT reported over the weekend that Melbourne-based  BHP is putting a bid for Anglo on ice. Not surprising given the divergence in their share price performance and whether BHP has the pockets or the stomach for a now much more expensive acquisition has always been in doubt. Anglo American more than once rebuffed BHP’s advances, but since the sweetened $49 billion takeover was first declared dead, the London-headquartered company has been busy getting in the right shape should BHP have another go (still not ruled out entirely, given the company’s careful wording around the issue). Anglo is ditching its Southern African diamond and platinum, Australian coal and Brazilian nickel assets. The restructuring along the lines demanded by BHP in its first approach and would see copper constitute 60% of Anglo’s portfolio. Together the miners would produce 1.9 million tonnes of copper on an attributable basis. BHP is now pivoting to organic growth with up to $10bn being spent on Escondida alone, the world’s largest copper mine in which Rio Tinto has a 30% stake.  Talks between Glencore and Rio Tinto held late last year and revealed in January appear to have stalled, but the impetus for mega mergers at the top of mining is alive and well. Based on today’s market valuation a BHP-Anglo combination would be worth some $160 billion, just about on par with that of a merged Glencore and Rio Tinto. Combined copper production on an equity basis would fall well short of BHP-Anglo at 1.6m tonnes however. Should these combinations happen 16% of global copper production would be controlled by just two companies. As it stands the companies listed in the accompanying graph represent nearly 40% of the global total.In a note, the copper service of Benchmark Mineral Intelligence says under a Glencore-Rio Tinto merger the potential for copper production growth is substantial, and is primarily driven by the latter’s assets.Should Rio Tinto’s Resolution project in Arizona somehow be resurrected – and with Trump back in the office those chances have improved – the ranking of top producers would not change much however. Rio Tinto has a 55% stake and BHP owns the remainder of what could be a 450,000 tonnes per year mine.Benchmark points out Oyu Tolgoi in Mongolia which is 66% owned is on track to achieve production of 500,000 of copper by the end of the decade, with the underground expansion progressing steadily. Escondida is projected to reach peak production of 1.3Mt of copper in 2025, but also offers significant brownfield expansion opportunities.Glencore also brings tonnes to the table. Benchmark says the company’s standout asset is its 44% stake in Collahuasi, a mine with a 76-year lifespan and considerable expansion potential. Two large mines with cobalt byproducts and crucially, operating experience in the Congo also counts in Glencore’s favour, particularly now that Western governments are belatedly rediscovering Africa as a potential supplier of critical minerals and global trade is fast going back to its mercantilist roots.  CHARTS: The coming critical minerals trade war is BRICS short of a loadThe DRC has been the number one source of additional copper tonnes coming on stream for four out of the last five years and the central African nation is likely to add another 200,000-plus to yearly mined copper in 2025.Glencore also owns an extensive greenfield portfolio in Latin America with projects such as West Wall, El Pachón, and MARA each having the potential to develop into major copper mines in the decade to come, says Benchmark.Baar-based Glencore is always looking for deals.  In 2014, Glencore under former CEO Ivan Glasenberg, barely two years after gobbling up Xstrata for $90 billion to add a vast mining portfolio to its then high-flying trading business, made its first attempt to merge with Rio Tinto. That approach was a non-starter in Melbourne, but with ever more fraught geopolitics, Glencore’s skills at navigating the global commodities trade may turn into much more of an asset this time around. At $228 billion a year, Glencore’s revenues dwarfs those of its peers, and it’s never been afraid to throw its weight around.  Glencore made an unsuccessful $23 billion bid for Teck Resources in 2023 but did end up with the Vancouver-based company’s coal assets. Under pressure from shareholders Glencore is clinging onto its very profitable coal mining and trading business, but with Rio Tinto well publicised exit from the industry, the fossil fuel may well be an insurmountable merger obstacle for its green-conscious shareholders.  Teck would’ve added a net 360,000 tonnes to Glencore’s annual copper output, but Teck is itself on an aggressive copper growth path vowing to up production to 800,000 tonnes which even on an owned basis would place the company firmly among the top 10 producers. Another dark horse in copper M&A is First Quantum Minerals. Last week the  Vancouver-based company disappointed markets with a cut to its 2025 production guidance.  First Quantum is targeting 400,000 tonnes this year, but if and when its Cobre Panama mine is restarted (consensus seems to be late this year or first half of  2026) the company’s contribution to global copper production could exceed that of Anglo.  Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com