Anglo American (LSE:AAL) and Teck Resources (TSX:TECK.A) have agreed to a merger between both companies expected to offer more than 70% exposure to copper, creating a new entity which will be called Anglo Teck, valued at more than US$50 billion.
The transaction, subject to regulatory approval, is expected to deliver annual pre-tax synergies of US$800 million and an additional US$1.4 billion of underlying earnings before interest, tax, depreciation and amortisation.
The proposed merged entity – which is expected to list on the London Stock Exchange, Johannesburg Stock Exchange, Toronto Stock Exchange, and New York Stock Exchange – will form one of the world’s largest copper producers with a combined annual copper production of 1.2 million tonnes.
Under the proposed deal, Anglo American shareholders will own 62.4% of Anglo Teck’s shares, while Teck shareholders will own the remaining 37.6%.
The transaction is expected to be completed within 12 to 18 months.
Anglo Teck’s production is forecast to grow by 10% to 1.35 million tonnes in 2026 from a portfolio of long-life assets, including the Collahuasi, Quebrada Blanca, and Los Bronces mines in Chile, the Highland Valley Copper Mine in Canada, and the Antamina Mine in Peru.
Anglo American CEO Duncan Wanblad says now is the optimal time to take this step to accelerate the company’s growth.
“We have a unique opportunity to bring together two highly regarded mining companies whose portfolios and capabilities are deeply complementary, while also sharing a common set of values,” Wanblad says.
Teck CEO Jonathan Price says this merger creates a global critical minerals company and a top five global copper producer with assets across Canada, the US, Latin America, and Southern Africa.
“It is a natural progression of our strategy and portfolio simplification, which created a platform to enable exactly this sort of transformative transaction,” Price says.
Upon completion, the executive directors of Anglo Teck will be Duncan Wanblad as CEO, Jonathan Price as Deputy CEO, and John Heasley as CFO.
In addition to copper, Anglo Teck will become a major producer of premium iron ore, totalling 61 million tonnes, that facilitates clean steelmaking from mines in South Africa and Brazil.
Additionally the merged company will be a large zinc producer via its Red Dog Mine in Alaska, alongside an operator of one of the world’s largest fully integrated zinc and lead smelting and refining facilities in British Columbia.
Global copper production is forecast to increase by 2.3% this year to around 23.5 million tonnes, driven by new and expanding mines across the world, as reported by the International Copper Study Group.
In 2024, copper production was estimated to be around 23 million tonnes – which was largely driven by the increased demand for the green energy transition and industrialisation.
Due to its unparalleled electrical properties copper is omnipresent in nearly all electrical infrastructure, and data centers more than most infrastructure require enormous quantities of copper.
Write to Aaliyah Rogan at Mining.com.au
Images: Anglo American
