Mining giant Anglo American plans to spin off its global operations, including De Beers’ diamond operations, to avoid a takeover and focus on minerals expected to boom amid the global transition to green energy.
LONDON — Mining giant Anglo American PLC is looking to expand its global portfolio, including spinning off De Beers’ diamond business, to avoid takeovers and focus on minerals expected to boom amid the global transition to green energy. The plan is to split the business, which has expanded to
London-based Anglo American said on Tuesday it would “consider all options” to separate its platinum business, sell a unit that produces coal used in steel production and separate De Beers from its parent company.
The move will allow Anglo American to focus on producing copper and iron ore, which together accounted for more than two-thirds of its profits last year. The company will also maintain its crop nutrients business.
The announcement came a day after Anglo American rejected a sweet takeover offer from rival BHP Group that valued the company at 34 billion pounds ($42.6 billion). This was about 9% higher than BHP’s previous offer.
“We are committed to delivering value safely, responsibly and reliably for the long-term benefit of our shareholders and other stakeholders, which is critical to enabling the energy transition and supporting improved lives globally. We will take clear and decisive action to deliver the best products possible,” Anglo CEO Duncan Wangold said in a statement.
Anglo American shares fell 2.8% to 2,632 pence in mid-afternoon trade in London on Tuesday. The company’s stock had risen as much as 33% in the past three weeks on speculation of a takeover.
The company is simplifying its operations by focusing on smaller products that are more likely to benefit from efforts to reduce fossil fuel use and reduce carbon emissions associated with global warming. They are trying to increase returns to shareholders.
Demand for copper, a key component in electrical wiring, solar panels, wind turbines and electric vehicles, is expected to double by 2035, according to an analysis by S&P Global Market Intelligence.
Anglo American also says that the high-quality iron ore from its mines helps steel producers reduce carbon emissions, while the naturally derived fertilizers it produces increase crop yields and reduce emissions from agriculture. It is said that it will help reduce the
Anglo American was the world’s eighth-largest mining company last year, reporting sales of $30.7 billion. This amount dwarfs the $217.8 billion generated by Glencore, the world’s largest mining company.
Anglo American was founded more than 100 years ago to mine gold in South Africa and quickly expanded to produce diamonds, platinum and copper.
At the end of last year, the company had about 60,000 employees in 13 countries ranging from Australia to Peru.
The company owns 85% of De Beers, which produces about a third of the world’s rough diamonds and sells diamond jewelry. The remainder is owned by the Botswana government.
South Africa remains a center of business for Anglo American, with the company employing more than 36,000 people in the country at the end of last year.
Anglo American acknowledged the impact of its restructuring plans on workers and pledged to engage with “relevant stakeholders” and comply with all consultation requirements and local laws.
