London and Johannesburg-listed mining giant Anglo American is to merge with rival miner Teck Resources to form Anglo Teck, a global miner focused on copper and critical minerals extraction.
The newly announced $50bn entity, which will be headquartered in Vancouver, Canada, says it will be a top five global copper producer with “an industry-leading portfolio of producing operations, including six world-class copper assets, alongside high-quality premium iron ore and zinc businesses.”
The new business, which says it expects to offer investors more than 70% exposure to copper, positions itself as a “global critical minerals champion,” and expects to list on the LSE (London), JSE (Johannesburg), TSX (Toronto) and NYSE (New York).
The new firm, which will retain corporate offices to support the group in Johannesburg and London, will pivot towards Canada. Anglo Teck CEO Duncan Wanblad, who currently leads Anglo American, will be based in Canada, as will deputy Jonathan Price, chief financial officer John Heasley and chair Sheila Murray.
“Anglo Teck will play an enhanced role in the Canadian mining ecosystem, while continuing to play a significant role in mining and business leadership in South Africa and the UK, and expects to be strongly positioned to support the critical minerals strategies of these countries and the priorities of local communities and stakeholders,” the firm said.
The future of Anglo American has been a source of considerable speculation since the miner rejected offers from Anglo-Australian miner BHP Billiton and announced that it would look for additional ways to unlock shareholder value. including by simplifying its portfolio.
Future in South Africa
Despite the Canadian pivot, Anglo Teck insists that it will continue to retain a strong South African presence.
For decades in the apartheid and post-apartheid period, Anglo American was the dominant force in the South African economy and on the Johannesburg Stock Exchange, with extensive interests in gold, diamonds (via its ownership of De Beers), copper, platinum and other metals and minerals. But in recent decades the firm has looked to other markets for growth opportunities.
The merger statement said that the firm will “continue to uphold and advance” its South African commitments alongside its planned listing on the JSE and Johannesburg office retention.
“Throughout its regular engagements with the Government of South Africa, Anglo American continues to reaffirm its enduring commitment to South Africa, including in relation to meaningful representation from South Africa on the board and executive team, and the investments it is making in its operations and the social fabric of local communities. Following the Merger, Anglo Teck will continue to uphold and advance these commitments. Its subsidiaries with operations in South Africa will continue to comply with all relevant empowerment and mining licenses requirements,” the statement said.
Anglo Teck said it plans to make financial contributions to South Africa’s Junior Mining Exploration Fund in partnership with the Industrial Development Corporation of South Africa and the South African Department of Mineral and Petroleum Resources, which seeks to assist qualifying junior miners to conduct prospecting work.
Despite committing to a significant ongoing role in South Africa, the overall pivot towards Canada is likely to be perceived as representing a further loosening of Anglo American’s historic ties to South Africa.
“We are all committed to preserving and building on the proud heritage of both companies, both in Canada, as Anglo Teck’s natural headquarters, and in South Africa where our commitment to investment and national priorities endure,” added CEO Wanblad.
De Beers separation to continue
Anglo Teck said it will remain committed to Anglo American’s announced portfolio simplification, including ongoing work to sell Southern Africa-focused diamond mining giant De Beers.
“Anglo Teck will remain committed to Anglo American’s announced portfolio simplification, including ongoing work to separate De Beers for value alongside completion of the steelmaking coal and nickel disposals. Anglo American will continue to advance these efforts prior to completion,” the statement said.
The government of Botswana, which owns 15% of De Beers, is pushing for a controlling stake in the company, with which it runs joint venture Debswana, and has reportedly hired investment bank Lazard to advise on the deal.
