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Anglo American plans to break itself up as the embattled mining group tries to win over shareholders following its rejection of a £34bn takeover bid from rival BHP.
In a series of sweeping changes to the 107-year-old mining company, Anglo said on Tuesday that it would sell or demerge its De Beers diamond business, its South African-based Anglo American Platinum operation as well as its coking coal assets.
London-listed Anglo will instead focus on its copper, iron ore and crop nutrients businesses. BHP, the world’s biggest miner, has set its sights on securing Anglo’s copper business, which is expected to boom as the world decarbonises.
Since rebuffing two approaches from BHP, Anglo’s chief executive Duncan Wanblad has been under intense pressure to set out the group’s future as a standalone group.
Laying out the proposed changes, Wanblad said: “These actions represent the most radical changes to Anglo American in decades.” They will result in “a radically simpler business [that] will deliver sustainable incremental value creation”.
Anglo said it would also pull back on spending on Woodsmith, a flagship project in the UK designed to create a vast underground mine producing a yet-unproven fertiliser. Instead of spending $1bn a year to build the mine by 2027, only $200mn will be spent next year and nothing in 2026.
Anglo shareholders have predicted that the group would struggle to sustain its current structure. They have long complained that the value of Anglo’s coveted copper mines in Latin America has been obscured by its other lacklustre operations, particularly its platinum and diamond divisions.
Under its plan, De Beers would be sold or demerged and Anglo American Platinum, which produces platinum group metals in South Africa, would be spun off.
Anglo also vowed to cut a further $800mn of costs a year by the end of 2025, adding to the $1bn it had already targeted.
The remaining divisions had core earnings of $7.2bn last year, making up the bulk of the $10bn that the company earned.
Anglo proposes to keep South Africa-based Kumba Iron Ore as part of a “premium” iron ore division that would also include its Minas Rio mine in Brazil.
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