Rio Tinto Keeps Bid for Anglo American on the Table-Report
In recent months, Rio Tinto (ASX, LON: RIO) has reportedly contemplated making a bid for Anglo American (LON: AAL), the world’s second-largest miner, currently targeted by BHP (ASX: BHP).
While Rio Tinto’s market capitalization trails behind BHP’s, it has not discounted the possibility of pursuing a partial or complete acquisition of Anglo American.
According to the Australian Financial Review, Rio Tinto’s management remains open to exploring options regarding Anglo American, including a potential all-share offer for segments or the entirety of the company.
Unlike BHP, Rio Tinto already operates in South Africa, acquiring Richards Bay Minerals from BHP in 2012, and has a foothold in the diamond market, a sector where Anglo American’s De Beers unit holds significance.
Rio Tinto’s copper expansion efforts, including projects in Mongolia and Chile, add weight to its interest in Anglo American, given the projected surge in copper demand amidst the global energy transition. However, concerns arise regarding Anglo’s coal assets, an area Rio Tinto exited in 2018.
Another player weighing its options is Glencore (LON: GLEN), which already holds a substantial stake in Anglo American’s Collahuasi copper mine in Chile. Despite its ongoing acquisition of Teck’s coal unit, Glencore’s penchant for strategic acquisitions keeps it in the fray.
BHP’s proposal necessitates Anglo divesting its interests in Anglo Platinum (Amplats) and Kumba Iron Ore in South Africa, presenting potential hurdles. Glencore, unlike BHP, might seek to retain these assets, leveraging its existing foothold in South Africa.
Both Rio Tinto and Glencore are closely monitoring BHP’s approach, poised to capitalize on any developments that could unlock opportunities within Anglo American’s asset portfolio. With BHP’s formal bid deadline approaching, the mining industry awaits the next move in this strategic maneuvering.
“It will be disappointing to lose another large miner from the London Stock Exchange if a deal goes through,” remarked Charles Bond, a natural resources partner at Gowling WLG, highlighting the uncertainty surrounding the potential acquisition.
As BHP’s deadline looms, the possibility of competitive bids and complex deal dynamics underscores the intrigue surrounding the future of Anglo American and its suite of assets.
