The Mining Merger That Could Reshape Mineral Security

Through the merger, Anglo American’s Collahuasi mine in Chile will feed into processing plants at Teck’s neighboring operation, creating value across the supply chain.

Anglo American

The British Anglo American and Canadian Teck Resources mining companies announced an agreement on one of the most significant mining mergers in recent history that will create a new giant with a combined market value exceeding $53 billion. The all-share deal is expected to close within 18 months, pending regulatory approval, and will establish Anglo Teck as one of the top five global copper producers. This marks a tectonic shift in global mineral supplies with major geopolitical implications.

After fending off acquisition attempts from other players in the industry over the past two years, both Anglo American and Teck have sold non-core assets to focus on copper, a key component in nearly every piece of conventional and advanced technology. With concerns about an inadequate copper supply on the horizon, the consolidation of these two companies could shake up how the industry approaches the raw materials race for this key metal.

A Synergetic Pairing

The transaction between Anglo and Teck is being described as a merger of equals, though larger Anglo American will emerge with 62.4% of the company while only paying a 2% premium. To appease Canada, whose Investment Act requires transactions to be advantageous to the country, Anglo Teck will be headquartered in Vancouver. Not a shabby city for a global HQ, if you ask me.

The newly formed mammoth would offer 70% exposure to copper, derived from six primary operations in North and South America. Press releases tout the merger’s strategic fit, which includes cost cuts that could translate into nearly $6 billion in added value once taxed and capitalized. The key synergy in the new alliance relates to two adjacent copper mines in Chile, Anglo and Glencore’s Collahuasi and Teck’s Quebrada Blanca, which Anglo Teck plans to connect via a 9.3-mile conveyor belt to feed ore from Collahuasi into QB’s new processing plants. The integration would bring in an additional annual $1.4 billion to EBITDA and yield an extra 175,000 tons of copper.

In the last two years, Anglo American and Teck have both avoided takeovers of their own. Teck was targeted with a $23 billion proposal from Swiss commodities group Glencore in 2023 and Anglo American rebuffed three attempts from Australian mining titan BHP. Mining companies are increasingly viewing M&A opportunities as more attractive than developing new projects, given the exorbitant upfront costs associated with new mines and the desire to meet rising global demand quickly. After an uptick in M&A activity in 2024, the Anglo-Teck tie-up could fuel a resurgence in deal-making, with copper at the forefront.

Cuckoo for Copper

Copper’s transition from a run-of-the-mill commodity to a must-have asset was initially catalyzed by its critical role in renewable energy infrastructure; however, intensifying demand is now being fueled by data centers and military spending.

Since 2016, copper prices have surged nearly 150%, and the most popular copper equity ETF, COPX, has risen almost 500%. The International Energy Agency tallied global demand for the metal in 2024 at 27 million tons, a figure expected to increase to 33 Mt in 2035 and 37 Mt in 2050. Concern in the industry lies are around supply forecasts in view of rapidly climbing demand.

Based on existing and announced copper projects, the IEA projects a 30% supply deficit by 2035 based on current stated governmental policies in consuming countries, with IEA’s Executive Director, Fatih Birol, stressing that “Diversification is key. The UK, Europe, Japan, the U.S., South Korea – the technology is there. Africa, Latin America have the resources. There could be international cooperation among countries…There is a need for government policies, to support new entrants [in the market]”.

Even in the IEA’s high-production model case, the deficit remains at 20%. Key issues driving this imbalance are the decreasing grades of copper in existing mines (higher grade materials are usually mined first, lower grades are left for later) and a need for increased geographic, market and investment diversity in the supply chain. To illustrate this further, even with declining grades and rates of discovery concentrating supplies, Latin America remains one of the world’s largest sources of raw copper, but, as noted by the Center for Strategic and International Studies in a 2024 report, much of this supply is being routed to China, which has secured an increasing volume of the raw material to feed its refineries

Much like the case with other critical minerals, Beijing is poised to increase its share of total refined copper production to 50% by 2040. The U.S. is one of the world’s top five copper producers, with the Southwest region (Arizona, New Mexico, Utah and Nevada) leading the country’s production. However, America remains heavily reliant on refined copper imports because it lacks sufficient infrastructure to turn its own raw material into usable metal and so is in the paradoxical position importing roughly 45% of its copper consumption. Data center buildouts could require an additional 1 million metric tons of copper by 2030, further reinforcing this dependency due to the poor economics of domestic production and refining

Is M&A the Key to Near-Term Mineral Security?

The Anglo-Teck deal makes it clear that the current mining consolidation is less about optimistic commodity price spikes and more about meeting demand as actors focus on securing future output and critical materials. Washington’s need to expand US and friend-shored domestic production and refinement of copper and other raw materials is beyond doubt, but it must be mindful of the timeline required for new mines. The U.S. must learn from Anglo Teck that fragmented domestic projects will not deliver the necessary scale.

The Department of Defense’s public-private partnership with MP Materials, which operates the Mountain Pass mine, the only operational production facility for rare earths in the U.S., underscores a shift in approach to optimizing our raw material supply chain. However, a truly resilient supply chain will come from leveraging existing companies to build the 21st century market infrastructure and robust and sustained regional partnerships. While mining more copper in new markets and increasing refinement capacity may allow Western powers to begin shrinking the incoming copper deficit, mergers like Anglo Teck’s stand to consolidate production and enhance efficiencies across the expanded supply chains.