BHP CEO Mike Henry says acquisition opportunities are now slim, a year after the world’s largest mining house launched an audacious bid to buy rival Anglo American — attracted by its impressive copper portfolio.
Nicknamed the “Big Australian”, due to its sheer size and influence in the mining sector, BHP has had two bids for Anglo rejected by the Anglo-UK group.
Henry told investors at the Bank of America 2025 Global Metals, Mining & Steel Conference, held in Barcelona, Spain, that while the company was still positive on copper as a future-facing commodity, there were slim pickings in terms of mergers & acquisitions.
“We’ve been positive on copper, we’ve also been super positive about needing to stay disciplined and only investing for value. And frankly, right now, the opportunities to create value for shareholders through acquisitions of current producing assets or assets that have near-term growth look pretty challenging, given where multiples are at currently,” Henry said.
“So if I weigh that up against the organic opportunities that we have, yes, slightly long-dated. But we’re a long-term business, our focus is well and truly on bringing that pipeline through,” he said.
Henry made an example of the group’s copper mine in Chile on how the group is pursuing organic growth.
“And you see with what we’ve done with Escondida, we’re constantly looking for opportunities to optimise within what we currently have to bring a bit of that forward, albeit I acknowledge it’s not quite as strong a growth as we would all love to have, but which we certainly unlock when we get to the 2030s.”
BHP, worth R2.3-trillion on the JSE where it has a secondary listing, already boasts an array of attractive copper growth projects in Chile, South Australia, the US and Argentina.
Copper delivers 39% of BHP’s earnings before interest, tax, depreciation and amortisation (ebidta) — one of the highest percentages among major diversified miners.
BHP’s copper ebidta has grown by $4.4bn since 2020 to $10.1bn in the 2024 financial year. In comparison, Anglo reported $3.8bn copper ebidta in the 2024 financial year.
BHP copper growth has, however, not stopped it from pursuing acquisitions in the copper sector — looking to strengthen its hand for long-term returns.
Copper is the most sought after commodity in the mining sector. The commodity is a versatile and recyclable material that is arguably mankind’s most important metal.
With the world seeking to decarbonise, copper has come into its own as one of the biggest beneficiaries of green-focused infrastructure plans in the US, China and Europe.
The metal is playing a growing part in the global energy mix, both in helping reduce emissions and in the push to develop and deploy green, renewable energy, Anglo has said.
The International Energy Agency has described copper as a fundamental element of sustainable technologies, most notably offshore wind power and battery storage.
By 2027, copper demand stemming from electric vehicles is expected to increase by 1.7-million tonnes.
BHP believes that demand for copper will grow due to grade declines at existing copper mines, the radical urbanisation of large populations in China and India and the electrification of energy and transportation.
It was no surprise therefore that BHP, now the world’s largest copper producer, made a bid for Anglo a year ago — mainly attracted to its copper portfolio.
Anglo’s copper assets include the Quellaveco copper mine in Peru, which has 36 years of mining life remaining. The Duncan Wanblad led Anglo also owns Los Bronces open-pit copper mine in Chile.
Anglo and Chilean state-owned copper miner Codelco in February announced a joint mine plan for the two companies’ adjacent Los Bronces and Andina copper mines.
The joint mine plan will increase copper production with minimal additional capital required, helping to unlock the full value of this world-class mining district and generating an expected net present value uplift of at least $5bn pretax over the period of the agreement, to be shared equally.
Anglo also owns two further mines in Chile — El Soldado and Collahuasi.
The Collahuasi mine is said to have one of the largest copper reserves in the world, with estimated reserves of 3.93-billion tonnes — with a 67 year reserve life.
The bids by BHP saw Anglo speed up its “self-help” plan, which seeks to simplify its portfolio on three pillars: copper, premium iron ore and crop nutrients.
This strategic decision made Anglo’s platinum group metals, nickel, steelmaking coal and diamond business not fit for purpose for the group’s growth blueprint.
However, Anglo has struggled to attract buyers for De Beers, while the sale of the recently hit turbulence after a gas ignition at one of the group’s steelmaking coal mine put a spanner in the works.
The buyer, Peabody Energy, has since issued a material adverse change notice to Anglo, essentially putting the Anglo-SA mining major on notice that it may terminate the agreement, should issues it has identified at Moranbah North mine in Australia not be addressed.
Peabody also has put the funding for the $3.8bn deal on hold.
Anglo used the Bank of America mining conference to punt its plan to unlock value in its “world class” copper assets, with the group targeting output of 1-million tonnes a year in the early 2030s.
About $250bn in investments is needed in the next five years to roll out new copper mines to meet demand, according to a report by the UN Conference on Trade and Development.
The report by the UN’s foremost institution dealing with trade and development estimated that 80 new copper mines are needed to meet global copper demand by 2030.
With Jacob Webster
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