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Australia’s BHP, the world’s biggest mining company, considered a bid for smaller player Anglo American about five years ago. BHP coveted only Anglo’s copper, and was put off by the prospect of dismantling a highly complex company to nail the prize. So it passed.
Big mistake. Copper since then has become the new oil, and no big mining house can prosper without the metal considered critical to the transition to a low-carbon future. Everyone wants copper and the price is soaring as supply proves incapable of meeting demand.
This week, BHP attempted to rectify its mistake. A leak forced it to unveil its proposal, valued at US$39-billion, to use its shares as the currency to buy Anglo, chiefly to get at its thriving copper mines in Chile and Peru. Most of Anglo’s other operations, notably the South African platinum and iron ore businesses, would get shunted out the door by way of demerger. On Friday, Anglo summarily rejected the offer, saying it “significantly undervalues” the company.
For the rest of this column: https://www.theglobeandmail.com/business/commentary/article-copper-is-the-new-oil-and-big-mining-sees-the-metal-as-its-life-blood/