The battle between BHP and Anglo highlights the popularity of copper May 26, 2024

photo: Anglo-American

By AFP - Agence France Presse

The battle between BHP and Anglo highlights the popularity of copper

BHP's battle to buy rival miner Anglo American has highlighted copper, the industrial metal in high demand because of its key role in greener technology.

UK-based Anglo rejected on Wednesday a third offer worth US$49 billion from Australian giant BHP, which aims to create a copper giant.

Copper is a vital component for energy storage, electric vehicles, solar panels, and wind turbines.

Meanwhile, Anglo has said that if it remains independent, it will divest itself of its diamond and platinum businesses - traditionally seen as more prestigious than its copper operations.

Amid BHP's bidding war, copper hit an all-time high of US$ 11,104.50 per tonne on Monday.

On Thursday, it traded at US$10,398.50, with traders and investors taking profits, according to analysts.

Copper production is struggling to keep up with demand - and by buying Anglo, BHP doesn't have to discover new mines, a project that costs a lot.

“To mine 200,000 tons of copper, you need US$10 billion and 10 years,” said Philippe Chalmin, from the commodities research group Cyclope.

However, with the high price of copper, new mining projects could become economical.

“The now significantly higher price level could even stimulate production in the medium term,” said Barbara Lambrecht, commodities analyst at Commerzbank.

Peru's Minister of Energy and Mines, Rómulo Mucho Mamani, recently stated that rising copper prices should attract investors.

Peru is the second largest copper-producing country, behind Chile.

The purchase of Anglo-Americans would give BHP control of important mines in both countries and put it in charge of around 10% of the world's copper production.

Anglo said that, as an autonomous company, it would split up and sell its De Beers diamond business.

“The diamond is in crisis,” Chalmin told AFP, noting that consumers are opting for cheaper synthetic stones.

According to Queensmith, a jeweler based in Hatton Garden - the central London district known for its jewelry shops and workshops - “lab-created diamonds can cost up to 85 percent less and are considered a more sustainable option than mined diamonds.”

Real diamonds are also falling out of favor for ethical reasons.

So-called blood diamonds, which have been used to finance conflicts, mainly in Angola and Sierra Leone, are, however, kept off the market through the international Kimberley Process certification scheme.

De Beers “has lost its former strength, namely a virtual marketing monopoly,” said Chalmin, mainly because of competition from synthetic diamonds.

Amid BHP's takeover quest, Anglo-American is also ready to get rid of its platinum division.

BHP has made it clear that it does not want Anglo American Platinum, the world's largest producer of the metal.

Anglo-American itself has indicated a plan to split up the unit if it remains an autonomous company.

Unlike copper, platinum is threatened by the transition to greener energy.

The metal is widely used in the production of catalytic converters, which reduce the harmful emissions emitted by vehicles powered by combustion engines.

With consumers switching to electric vehicles, the price of platinum has suffered in recent years.

By Emeline BURCKEL

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