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BHP to reshape copper market with Anglo bid

A worker attends to machinery at a smelter plant at Anglo American Platinum's Unki mine in Shurugwi

MELBOURNE (Reuters) - London-listed miner Anglo American said on Thursday it had received an all-share buyout proposal from BHP Group, a deal that would make the world's biggest listed miner also the largest producer of copper globally.

The deal, if agreed, would also trigger further transactions in the global mining industry, which has seen a flurry of mergers and acquisitions as companies look to raise exposure to metals deemed critical to the energy transition.

BEN CLEARY, PORTFOLIO MANAGER AT TRIBECA INVESTMENT PARTNERS

"This is all about copper. BHP becomes the global leader, knocking out Freeport. I think it’s a good deal for BHP. Anglo is obviously very much in play now.

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"Good timing I think for BHP as most of their competitors are busy or not in the position to strike. Big read through for other copper producers clearly the global consolidation is on.

"Anyone that has watched the Australia Open ad breaks for the last five years knows BHP likes copper and wants to increase exposure. The deal would also mean London will become even smaller centre for financing the global mining sector."

HAYDEN BAIRSTOW, HEAD OF RESEARCH AT BROKER ARGONAUT

"It’s all about copper. BHP has talked about getting more copper for a long time. Anglo’s got plans to go to a million tonnes per year in the next 10 years. There’s also a tie in with BHP’s Jansen potash, and Anglo’s Woodsmith.

"As for the rest of it, some can be refloated or maybe there’s a combination of assets they package together similar to what BHP did with South32."

CHRISTOPHER LAFEMINA, ANALYST JEFFRIES

"Based on our analysis, Anglo would be a good strategic fit for BHP or another major miner due to potential synergies, asset quality, and commodity exposure (especially copper). Our analysis indicates that Anglo consists of an undervalued portfolio of multiple tier-1 assets, several of which are in relatively low-risk jurisdictions (Chile, Peru, Australia, Brazil). There is a scarcity value to tier-1 mining assets that is not reflected in equity valuations. Hence, Anglo could be a compelling fit."

(Reporting by Melanie Burton; Editing by Stephen Coates)