BHP Billiton CEO sees no ‘must-do’ deals, temporarily abandoning Anglo American (OTC:AAUKF), BHP Group (NYSE:BHP)

Global Mining Leader BHP Billiton BHP Billiton Temporarily gave up the pursuit Anglo American AAUKFone of the biggest M&A attempts of 2024.

The Financial Times reports that the Australian miner now considers the deal “too expensive” given that Anglo American’s share price has soared in recent months – the London listing comes on the back of restructuring efforts and favorable investor sentiment The company’s shares have risen 26% in the past 12 months.

BHP’s $49 billion bid targets Anglo American’s copper assets, particularly its Koravasi Chilean mines and quelahueco I’m in Peru. These sites are among the most important copper reserves in the world, with the Collahuasi deposit holding 3.93 billion tonnes grading 0.66% copper and the Quellaveco deposit holding 1.1 billion tonnes grading 0.55% copper.

In response, Anglo American quickly restructured, selling its Australian coal assets for $3.8 billion, divesting its South African platinum business and working to divest its Brazilian nickel assets.

“If what BHP is offering is what they consider to be fair value, it’s hard to understand why they would now offer a higher price,” commented the comment George Cheveleymanager of Ninety-One Fund.

BHP’s interest in Anglo American stems from growing demand for copper, a key metal in the energy transition and digital infrastructure. The miner expects copper demand to increase sixfold by 2050, driven by electrification trends and the explosive growth of data centers. Data centers, in particular, are becoming important consumers of copper, requiring the metal for power grids, cooling systems and circuit boards.

An internal analysis estimates that copper use in data centers will increase from 500,000 tons to 3 million tons per year by 2050.

As BHP describes it, “digital demand” includes the use of copper in data center construction, power generation and power transmission infrastructure. The miner also predicts that global electricity consumption by data centers will rise from the current 2% of total electricity demand to 9% by the middle of this century.

BHP has expanded its copper business despite not acquiring Anglo American’s copper assets. Earlier this month, the company completed the sun line Argentina project Lundin Mining Company. Projects in the Vicuña area are estimated to contain 2.22 million pounds of copper, 2.86 million ounces of gold and 133.33 million ounces of silver.

Still, despite the company’s optimism about the metal, CEO McHenry Tough criteria were set for further transactions, clarifying that they must create value and be consistent with the company’s long-term objectives.

“No deal is a ‘must do’ for BHP,” he said.

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