Global mining majors Anglo American and Teck Resources have agreed to merge in an all-share transaction that will create Anglo Teck, a new global critical minerals leader and top five copper producer headquartered in Vancouver, Canada.

The merger of equals, announced on Tuesday, will position Anglo Teck as a “critical minerals champion”, offering investors more than 70% exposure to copper.

Anglo Teck will immediately rank among the world’s largest copper producers with six Tier 1 copper assets, including Collahuasi, Quebrada Blanca, Quellaveco, Los Bronces, Highland Valley Copper and Antamina. Combined copper production of 1.2-million tonnes a year is expected to grow by about 10% to 1.35-million tonnes in 2027.

Alongside copper, Anglo Teck will be a major producer of premium iron-ore from Brazil and South Africa, zinc through Teck’s Red Dog mine in Alaska, and will advance the development of Anglo’s Woodsmith crop nutrients project in the UK.

Corporate offices will be maintained in London and Johannesburg, but the global headquarters, as well as a majority of senior executives, will be based in Canada.

“Having made such significant progress with Anglo American’s portfolio transformation, which has already added substantial value for our shareholders over the past year, now is the optimal time to take this next strategic step to accelerate our growth,” said Anglo American CEO Duncan Wanblad, who will lead Anglo Teck.

“We are all committed to preserving and building on the proud heritage of both companies, both in Canada as Anglo Teck’s natural headquarters and in South Africa where our commitment to investment and national priorities endure,” he said.

Teck CEO Jonathan Price, who will be deputy CEO of the merged entity, added that the transaction was also a natural progression of Teck’s strategy and portfolio simplification. “Bringing together our world-class copper assets, premium iron-ore and zinc operations and an outstanding pipeline of high-quality growth projects provides enormous resiliency and optionality,” said Price.

He also stressed that the transaction would create "significant economic opportunity" in Canada.

As part of its commitments, Anglo Teck will establish its head office in Vancouver, appoint Canadian directors to its board and ensure senior management roles are based in the country. The group will also maintain a TSX listing alongside its presence in London, Johannesburg and New York.

The new company plans to invest about C$4.5-billion in Canada over the next five years, including extending the life of the Highland Valley Copper mine, expanding processing capacity at Trail Operations in British Columbia and advancing new copper developments in the province. Anglo Teck will also study further copper processing capacity at Trail and support the creation of new critical minerals facilities in the country.

These commitments reflect the Canadian government's increasingly firm stance on foreign ownership of Canadian resource assets. The government cleared Glencore’s acquisition of Teck’s Elk Valley steelmaking coal business only after imposing conditions such as a Canadian headquarters, domestic board representation and job protections.

Industry Minister François-Philippe Champagne said last year that large mergers and acquisitions in the critical minerals space would be approved only in “the most exceptional circumstances".

'STICKING TOGETHER TO SURVIVE'
London-based brokerage SP Angel said in a note the deal highlighted how the two miners were consolidating to sharpen their copper focus as investors demanded greater exposure to the metal.

“Seventeen months on from BHP’s approach, Anglo American has joined forces with Teck to create the second-largest listed copper miner globally after BHP,” SP Angel analysts said. They noted Anglo had already been simplifying its portfolio since rebuffing BHP, trimming assets through sales and divestments.

Teck, meanwhile, has struggled with operational challenges at its Quebrada Blanca mine, contributing to a 21% share price drop over the past year, compared with a 31% gain in the global copper miners ETF.

“There is an element of sticking together to survive here, with Teck previously pursued by Glencore and supposedly both Vale and Rio, while the possibility of BHP coming back for another crack at Anglo had also been rumoured,” the analysts said.