Anglo Teck merger creates top five global copper producer

In a significant move within the mining industry, Anglo American and Teck Resources have announced plans to merge, creating a powerhouse in copper production valued at over $53 billion. The newly formed entity, to be named Anglo Teck, will position itself among the top five copper producers globally, with copper comprising more than 70% of its portfolio. The deal, unanimously approved by both companies’ boards, is expected to finalize within the next 12 to 18 months, pending necessary shareholder and regulatory approvals.

Strategic Benefits and Leadership Structure

The merger will see Anglo American shareholders owning approximately 62.4% of the new company, while Teck’s investors will hold a 37.6% stake. In preparation for the merger, Anglo American intends to distribute a special dividend of $4.5 billion, equating to roughly $4.19 per share, to its shareholders before the deal concludes. The anticipated copper production for Anglo Teck is estimated at 1.2 million tonnes per year, with projections of increasing this figure to 1.35 million tonnes by 2027. This growth will be supported by six existing copper operations and additional projects located in the Americas and southern Africa.

Anglo Teck aims to achieve an impressive $800 million in annual pre-tax cost savings by the fourth year of operation. Additionally, the merger is expected to deliver $1.4 billion in annual EBITDA gains from 2030 to 2049 by optimizing operations at the adjacent Collahuasi and Quebrada Blanca mines in Chile, potentially adding around 175,000 tonnes of copper production each year.

The headquarters of the new company will be established in Vancouver, with corporate offices in London and Johannesburg. Duncan Wanblad, currently the CEO of Anglo American, will lead the new organization, while Jonathan Price from Teck will serve as deputy CEO. John Heasley has been appointed chief financial officer, and Sheila Murray will take on the role of chair.

Commitment to Sustainable Growth and Community Engagement

Both Anglo American and Teck have expressed that this merger is a strategic fit that will unlock significant value over time, creating a leading force in critical minerals. With plans to invest approximately C$4.5 billion over the next five years in Canada, Anglo Teck aims to enhance mine extensions and copper processing initiatives in British Columbia while maintaining employment levels and honoring commitments to Indigenous communities.

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Anglo Teck will also seek listings on major stock exchanges in London, Johannesburg, Toronto, and New York, providing access to vital mining finance markets. This merger comes in the wake of previous portfolio streamlining efforts by both companies, with Anglo American divesting its coal and nickel operations and Teck simplifying its business model. As the global demand for copper continues to rise, Anglo Teck is poised to emerge as a leading player in the mining sector, strategically positioned to capitalize on the growing market for this essential metal.