Anglo American CEO Duncan Wanblad has reaffirmed his confidence in the company’s $50bn merger with Teck Resources.
In his keynote interview at the FT Live Metals and Mining Summit today (9 October), Wanblad defended the merger’s value following the slashed copper production forecasts announced by Teck yesterday.
Asked if the forecasts had come as a surprise to Anglo American, which will make up 50% of the new Anglo Teck company under the merger, Wanblad answered: “No,” adding: “We did an extraordinary amount of diligence, pretty much at the same time that the review was going on. While we clearly didn't have the details of the outcome of that review, published yesterday, I think the findings of that are very consistent with our diligence.”
He continued: “We remain extremely confident that we will deliver those synergies and that the value represented in the merger proposition is extraordinarily good and not impacted at all by the announcement yesterday.”
Yesterday, Teck lowered its 2025 output projection for the trouble-ridden Quebrada Blanca copper mine in Chile's Atacama Desert. Previously projected to produce 210,000–230,000 tonnes (t) of copper, the mine is now expected to produce between 170,000 and 190,000t, a decrease of between 17% and 19%.
This downward revision is the second in the last three months. The first happened in July, prior to which Teck Resources had forecast that Quebrada Blanca would produce 230,000–270,000t of copper in 2025.
Despite this, Wanblad insisted that the merger represents a future-facing strategy.
“Mining just needs to be done in a different way from how it has been done in the last 100 years,” he said. “The logic and the rationale are there for why we should be putting these two businesses together at this point in time.”
Wanblad was also asked about Anglo American’s restructuring, through which the company is selling off nickel, diamonds, platinum and coal in favour of a more focused portfolio. In response, he turned the conversation to Anglo American’s disagreement with Peabody Energy.
He said: “In the coal business, unfortunately, Peabody decided to exit stage left. We absolutely maintain that there is zero chance that this was a MAC [Material Adverse Change] event, given that there is absolutely no damage to the store body.”
Anglo American and Peabody entered arbitration last week, after Peabody withdrew its $3.78bn bid for Anglo American's Australian coking coal assets in August. It invoked the MAC clause following a fire at the Moranbah North mine in Queensland.
Considering what the future of coal looks like for Anglo American, Wanblad said: “Unfortunately, we are now going to have to remarket the business. We are preparing to do this at the moment. Hopefully that will happen towards the back end of this year or early next year, and then we will be into the market with what is probably still recognised in the marketplace today as one of the most unique and highly metallurgical assets.”
He painted an optimistic picture of Anglo American’s coal prospects, commenting: “We had an enormous amount of interest in the first marketing process of this business and that interest has remained very strong since Peabody made their statement of the possibility of their withdrawal from this contract.
“All of that interest remains very strong today, and we are looking forward to running another very tight auction on the business in the next couple of months.”
Mining Technology is in attendance at the FT Live Metals and Mining Summit, with reporter Eve Thomas available for interviews on the ground. Contact her at eve.thomas@globaldata.com to arrange timings and discuss topics.
