One of the most exciting business moves in the mining world this year has been BHP Group’s ambitious, almost paused, interest in acquiring Anglo American. Earlier in 2024, BHP—the ASX giant worth $216 billion—launched a substantial offer to acquire British copper and mining powerhouse Anglo American, valued at $63.5 billion. Though Anglo American denied multiple offers, BHP’s latest statements suggest they’re not entirely out of the game just yet.

A Huge Merger That Nearly Took Place

BHP’s proposal for Anglo American wasn’t just about expanding its empire. It was aimed at transforming the mining landscape. This merger would have significantly enhanced BHP’s copper assets, a vital resource for renewable energy technologies and electric vehicles, where demand is projected to skyrocket. To make the deal more appealing, BHP even suggested divesting certain Anglo American subsidiaries, like Anglo American Platinum, to streamline operations and focus primarily on copper.

The final offer, valued at around $74 billion, was declined by Anglo American’s shareholders in May. For many, that rejection seemed like the final nail in the coffin for BHP’s acquisition dreams. But recent signals indicate that BHP may still be interested.

BHP Signals Potential Future Interest

In October 2024, BHP’s chair, Ken MacKenzie, addressed shareholders, remarking that the company had essentially “moved on” after Anglo’s shareholders dismissed the acquisition proposal. MacKenzie described the attempted merger as a potential “one plus one equals three” opportunity, where the combined resources and market presence of BHP and Anglo American could have created a unique, powerful entity. However, he emphasised that Anglo American’s shareholders saw more value in their independent growth strategy and ultimately rejected BHP’s overtures.

So, has BHP truly moved on? 

Well, not entirely. Following MacKenzie’s comments, BHP issued an ASX statement clarifying that these remarks didn’t constitute a formal declaration of withdrawal under UK takeover rules. This nuanced statement has left the door open for a possible return to the negotiating table, with BHP stressing that they are not bound to avoid future offers for Anglo American under UK City Code’s Rule 2.8.

British Takeover Restrictions and a Six-Month Pause

Currently, BHP is restricted by UK takeover rules from making another bid for Anglo American until the end of November 2024, six months after the original offer was declined. However, this temporary freeze doesn’t eliminate the possibility of a renewed bid after that period. In its latest statement, BHP pointedly remarked that MacKenzie’s words were not to be interpreted as a formal statement of intent to stop pursuing the deal.

This careful wording indicates that BHP might be waiting for the right moment to revisit the acquisition. For now, they’re playing by the rules, but the expiration of the six-month restriction could be when BHP makes its next move.

Why BHP Remains Interested in Anglo American’s Copper Assets

BHP’s primary interest in Anglo American revolves around copper, a commodity essential for green technology and future-oriented industries. BHP’s own copper operations have grown in importance due to their role in renewable energy production and electric vehicle manufacturing. By integrating Anglo American’s copper assets, BHP could fortify its position as a world-leading copper producer, capitalising on the metal’s central role in the transition to cleaner energy sources.

Even with the setback, BHP’s current portfolio remains robust, as emphasised by MacKenzie. He underscored BHP’s “world-leading position in copper” and its deliberate shift toward resources crucial for a sustainable future. This is part of a broader strategy to reshape its portfolio, ensuring BHP’s presence in high-demand commodities like copper and potash.

Speculation Grows: Is BHP Preparing for a Comeback Bid?

Rumours have been swirling about BHP’s next steps, fueled partly by recent visits of BHP’s senior executives to South Africa, where Anglo American has significant operations. Some analysts and industry insiders believe these meetings could be a signal that BHP is laying the groundwork for a renewed acquisition attempt once the regulatory restriction lifts at the end of November.

This cautious yet strategic approach could allow BHP to engage in preliminary discussions and assess Anglo American’s shareholder sentiment. If the winds shift in favour of a deal, BHP might be better positioned to present an offer more palatable to Anglo’s investors.

BHP’s Stock Performance and Strategic Adjustments

Amid these takeover attempts, BHP has faced a challenging year in terms of share performance. BHP’s stock is down nearly 21% year-to-date, a decline partly influenced by broader market pressures on the mining sector. MacKenzie acknowledged these challenges, citing commodity price volatility due to surplus supply and the economic slowdown in China.

Despite these hurdles, BHP remains committed to enhancing its portfolio for the future. They recently suspended two of their projects in nickel and copper, signalling a calculated approach to managing resource allocation and focusing on assets that align with global trends towards sustainability.

The Copper Quest Continues

BHP’s evolving strategy and its interest in Anglo American reflect the shifting priorities of major mining companies as they seek to balance profit and sustainability. The push for copper and other future-facing commodities highlights a pivotal moment in the mining sector’s adaptation to a more sustainable global economy.

For now, BHP seems prepared to wait, keeping its options open for a potential acquisition down the line. Investors and industry observers alike will be watching closely to see if BHP reignites its pursuit of Anglo American after November. Whether or not they eventually succeed in adding Anglo American to their fold, BHP’s strategic choices underscore their commitment to leading in metals critical for tomorrow’s energy and technology needs.