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Mark Bristow, one of the mining industry’s most prolific dealmakers, has warned that M&A will do nothing to grow the supply of copper that the world needs to go green, as sector leader BHP pursues a £31bn mega-deal for Anglo American.
The chief executive of Barrick Gold said miners needed to invest more in exploring for and developing new deposits of the world’s most important industrial metal — needed for power lines, data centres and electric cars — as he dismissed making a rival bid for Anglo American or First Quantum, another copper producer.
Bristow told the Financial Times that the BHP approach for Anglo “reinforces that the industry needs investment in its future”. He added that “you can consolidate but it doesn’t build the production profile. On consolidation, you can always reduce production.”
The South African executive’s comments come as the world faces a future shortage of copper because of a lack of new mines under development — even as demand is set to almost double to 50mn tonnes per year by 2035 because of the boom in renewables, EVs and AI — according to S&P Global Commodity Insights.
Anglo American chief executive Duncan Wanblad said earlier this year that copper M&A is like “rearranging the deckchairs on the Titanic”, referring to its impact on solving the looming shortages of the metal.
BHP must decide by May 22 whether to make a formal offer for Anglo, which holds coveted copper mines in Peru and Chile. Under the Australian group’s initial proposal, Anglo would have to sell its majority stakes in its South African platinum and iron ore businesses to its shareholders for the deal to go ahead.
Barrick has a strategic aim to boost copper production by developing the ambitious $7bn Reko Diq project in Pakistan, which Saudi Arabia is considering taking a significant minority stake in, and a “super pit” expansion at Lumwana in Zambia.
The $29bn gold miner has been touted as one potential rival bidder for Anglo, as well as a potential saviour of First Quantum, whose giant copper mine in Panama was ordered to be shut down by the government following environmental protests. Yet Bristow played down the possibility of making a foray for either of the copper industry’s foremost targets, especially given BHP’s $145bn market capitalisation.
“BHP is the ultimate 800-pound gorilla. It’s a complex transaction,” he said. “It’s hard to imagine how we could be competitive in that process.”
Despite Bristow initially having a keen interest in a takeover of First Quantum, he said the company and its Panama mine were an “undefined risk” at this stage.
He added that “until we can see some definition, for us, there’s no interest in this opportunity. In our mind, it’s not an opportunity.”
Copper prices have rallied more than 20 per cent since the middle of February to the highest level in about two years at almost $10,000 per tonne because of shortages of copper ore from mines. Goldman Sachs has predicted copper prices will jump to $12,000 per tonne by the end of the year, well above the metal’s record high.
The world is lagging behind in the investment needed in critical minerals, a UN report warned last month, with copper suffering the biggest investment shortfall with 80 new mines that needed to be developed.