Anglo American has caught a copper price tailwind for its mega merger push in recent weeks as production cuts helped the bronze metal shrug off tariff turbulence.
The price of copper jumped nearly 15% in the month after Anglo announced plans to merge with Canadian copper miner Teck Resources, giving the group some reassurance as it enters a new copper-focused phase.
Prices soared to a two-month high of $5.14/lb on Thursday before edging down to about $4.80/lb on Monday, extending a more than 20% year-to-date rally and shrugging off US tariff-driven volatility as mine disruptions tightened global supply.
The surge in prices came partly as Teck laid out sharp production cuts this week, with the Vancouver-based giant on Wednesday slashing the production forecast for its flagship Chilean mine to 170,000-190,000 tonnes, compared to a previous guidance of 210,000-230,000.
The reduction, which marks the second downgrade to the Chilean Quebrada Blanca operation this year, also saw production forecasts through to 2028 being lowered.
Anglo responded by saying that the operational review was in line with its own due diligence ahead of the merger and that nothing about the deal or its value had changed.
“While the specific outcome of the operational review that Teck has announced today was not known at the time, the outcome presented by Teck is broadly consistent with Anglo American’s independent due diligence and analysis,” said Anglo in a statement on the JSE news service.
The adjustment coincided with a trend of operational disruptions tightening copper supplies. Bloomberg reported that Chilean state-owned Codelco produced its lowest monthly output in more than two decades in August after a mine collapse, while a fatal accident halted operations at another leading mine in Indonesia, buoying fears of market tightness.
More than half of global copper reserves come from just five countries, making the global mined supply vulnerable to supply chain disruptions.
Additionally, new copper mines coming online are few and far between, with new mines requiring up to 25 years to develop.
Against this backdrop Anglo Teck, soon to be the world’s fourth-largest copper producer, is sitting pretty as tightening market dynamics help stabilise prices in the face of tariff pressures.
Copper prices surged in March when US President Donald Trump threatened to impose a 25% tariff on US imports of the metal and again in July when it was lifted to a 50% duty. They plunged on August 1 when Trump surprised markets by exempting refined copper while only imposing the hefty 50% tariff on semi-finished copper products such as pipes, wires, rods, sheets and tubes.
Prices have since been on a steady rise, shaking off market jitters to gain just shy of 11% since end-July. Anglo American has added nearly 35% over this period (compared with Glencore’s 12.56% and BHP’s 6.7%), peaking at a more than 30-month high of R689.94 on Thursday.
Demand for copper is expected to surge more than 40% by 2040, driven by the shift to electric cars and solar panels as well as the growth of data centres and AI infrastructure.
The energy transition relies on copper to support electrification. Electric vehicles, for instance, require three times more copper than internal-combustion engines.
Copper demand from data centres, which are expected to increase in processing capability and popularity thanks to the growth of data and AI, is projected to increase sixfold by 2050.
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