BHP has opted against pursuing a rival offer for Glencore as Rio Tinto advances discussions to acquire the Swiss mining giant, said Reuters citing two sources with knowledge of the Australian miner’s strategy.
The Melbourne-based company, valued at $158bn, regards Glencore as incompatible with its business model and will instead monitor developments from the sidelines, the sources said. BHP has no interest in Glencore’s trading operations or coal holdings and considers Anglo American’s copper assets superior to those of Glencore, they added.
News of Rio Tinto’s renewed interest in Glencore, announced late Thursday, propelled the target company’s shares upward by approximately 10% and triggered market speculation about competing bids. A successful Rio-Glencore combination would establish a mining colossus worth nearly $207bn.
Industry observers had identified BHP as the most probable challenger to Rio’s approach, though the company has now signalled otherwise. The decision follows BHP’s unsuccessful 18-month campaign to acquire Anglo American, which collapsed last November and represented another disappointment in BHP’s copper expansion ambitions. Anglo American subsequently entered negotiations with Canada’s Teck Resources.
Both Glencore and Anglo American maintain 44% stakes in Chile’s Collahuasi copper operation, whilst BHP and Glencore jointly control Peru’s Antamina copper venture.
The current wave of consolidation activity reflects intensifying competition amongst major mining houses to secure copper supplies, a metal essential for artificial intelligence data centres and the worldwide transition to renewable energy.
