adminDays after BHP Group failed to secure the US$49 billion takeover of smaller rival Anglo American Plc, investors have one message for Chief Executive Mike Henry — keep your cool.
BHP argues it showed restraint in the battle for Anglo, a welcome attribute in a sector notorious for burning billions of dollars on underwhelming projects and ill-timed acquisitions just over a decade ago.
The question now is whether that discipline holds, even with all mining bosses gunning for more volume in copper, the single most coveted metal as the energy transition accelerates.
The Anglo tilt was an ambitious bid to transform the world’s largest miner into the top global producer of the red metal in one fell swoop.
Having faltered, people familiar with the matter say BHP won’t rush into more — at least in part because there are few alternatives when it comes to copper.
Major deposits are increasingly rare and costly to develop, while the most obvious acquisition targets are effectively out of reach, either because of ownership or valuation.
Anglo comes back into view in six months time under UK Takeover Panel rules, and BHP will wait until then and reconsider its options, said the people, who declined to be named as the discussions are not public.
“What is in BHP’s portfolio is going to take time to deliver and it’s not going to be cheap. That was one of the reasons why they saw an opportunity in Anglo to take their interest in three key assets in Chile,” said David Radclyffe, managing director at Global Mining Research.
“Copper is one of those commodities everyone wants to be in, the problem being there aren’t many of those assets and it’s incredibly hard to deliver them.”
The battle over the past weeks has mesmerised the mining sector. — Bloomberg.
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