After years of shrinking to greatness, BHP boss Mike Henry is eyeing a deal that could deliver a triple victory. But it’s complex, and possibly risky.
After years of simplification and shrinking to greatness, BHP is set to embark on the deal equivalent of a somersault with a double pike.Anglo is in a weakened state, having lost the faith of investors under chief executive Duncan Wanblad; its shares are down 47 per cent in two years, and in December, it slashed its production targets in a desperate bid to conserve cash.
So, why does this deal make sense for BHP? The answer lies mainly in the world’s hottest commodity: copper. Anglo knows the supply squeeze only too well. The Quellaveco mine in Peru, in which it owns a 60 per cent stake, is one of the world’s newest mines. But its Los Bronces mine in Chile is over 100 years old, and Anglo is now struggling to process harder ore that contains less copper; it has now curtailed output to keep costs down.
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