Anglo American says committed to SA despite merger with Teck

Tawanda Karombo

Anglo American says its merger with Canadian miner, Teck Resources does not affect its obligations and interests in South Africa, with the enlarged entity geared to grow its investments domestically.

Over the past few days, South African economist Duma Gqubule has said that the transaction will “provide a final death knell” for the Johannesburg and London listed resource giant.

Anglo American has been shedding its South African assets under CEO Duncan Wanblad, with the company finalising its exit from Anglo American Platinum this year.

Anglo American has said that its merger with Teck “does not change South Africa’s sovereignty, our operations and many other interests in South Africa or Anglo American’s obligations” in the country.

“The merger with Teck is about building a stronger global critical minerals company that is even better positioned to invest and grow, including in South Africa. As we have made clear repeatedly, South Africa, and our world class Kumba Iron Ore, are central to our strategy,” said Anglo American.

Some analysts are convinced that Anglo American could eventually spin off Kumba once the tie up with Teck is finalised. Shareholders in Anglo American are expected to vote on the tie up with Teck Resources this month.

Anglo American insists that it is not exiting South Africa, with the merged entity set to continue its listing on the JSE as a very much larger global company. It said this would provide direct investment access for its substantial shareholder base in South Africa, including the Public Investment Corporation (PIC).

On conclusion of the merger, the Anglo Teck London headquarters will move to Vancouver, Canada, with no South African assets, licences or companies being moved as a result of the merger.

“Anglo American is deeply committed to South Africa - operationally, economically, and socially. Our proposed merger with Teck is, without doubt, a significant positive for South Africa and South African mining,” it said.

“Anglo Teck forms one of the world’s leading critical minerals companies, a larger, stronger and more financially resilient company, even better positioned to invest in South Africa’s, and Southern Africa’s, mining future.”

Gqubule had said that the tie up with Teck was “not a merger of equals since Anglo is much larger than Teck – even after the new company has disposed many of the former Anglo’s assets that accounted for half of its 2024 revenues and almost quarter of its earnings before interest, tax, depreciation and amortisation” (Ebitda).

Furthermore, argued Gqubule, Anglo’s takeover of Teck will mostly benefit the Canadian economy and Anglo’s executives who will move to Vancouver “and get large bonuses if shareholders accept an incentive plan that also rewards them” for concluding the transaction.

If concluded, the merged entity will be renamed to Anglo Teck, becoming a top five global copper producer, with combined current production of 1.2 million tons and expected to rise by 10% to 1.35 million tons in 2027.

In South Africa, Anglo insisted that the merged entity will pursue its commitment to invest R11 billion in the UHDMS project at Kumba as well as boosting the Junior Mining Exploration Fund established by the Department of Mineral and Petroleum Resources and the IDC though a R600 million investment.

Anglo Teck also plans to support the development of a global critical minerals institute involving institutions from the world’s great mining countries, including South Africa. Anglo American’s total tax and economic contribution to South Africa in 2024 amounted to R111bn.

Neil Wilson, an investor strategist, said the merger between Anglo American and Teck is a “sign that consolidation in the industry is afoot as copper demand” explodes. It comes after the two companies rebuffed take-over bids in the recent past; Anglo American rebuffed BHP while Glencore also looked at Teck in 2023.

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