Glencore is plotting a takeover bid for Anglo American, which would lead to a bidding war with rival BHP

Glencore is plotting a takeover bid for Anglo American, which would lead to a bidding war with rival BHP.

The mining giant’s top management is considering an approach for Anglo after the London-listed miner rejected BHP’s £31 billion bid last week.

An offer would mark the start of a bidding war for the 107-year-old mining company, with BHP also working on an improved deal.

BHP boss Mike Henry arrived in South Africa yesterday to sweet talk officials amid fears a takeover could be derailed by the country’s opposition.

Anglo was founded in Johannesburg in 1917 and has close ties with the country.

The South African government is the miner’s second largest shareholder. The company has become a takeover target at a politically charged time as the country goes to the polls this month.

Glencore is in preliminary internal discussions about making a bid for Anglo, Reuters reported.

The company has not yet approached Anglo and the talks may not lead to a bid, but a Glencore spokesperson declined to comment on “market rumors or speculation.”

Bidders are eyeing Anglo’s copper mines in Peru and Chile, in a rush to cash in on rising demand for the metal.

Copper is used in everything from cars to electricity grids and construction, as well as in the development of clean energy and artificial intelligence. Analysts expect a copper shortage this year as demand grows, because copper is crucial for the energy transition.

Russ Mould, investment director at broker AJ Bell, said: ‘The big prize is scooping up a ready-made portfolio of copper assets, a much easier way to increase scale in a key metal for the energy transition than having to drill thousands of holes to drill. about exploration projects to find new supplies.”

Anglo and Glencore each own 44 percent of the Collahuasi mine in Chile, which is estimated to have some of the largest copper deposits in the world. At the same time, Anglo’s extensive portfolio includes platinum, iron ore, coal for steelmaking, diamonds and a fertilizer project.

BHP is set to sell Anglo’s De Beers diamond unit, insiders said, while the future of the Woodsmith mine in North Yorkshire is in doubt.

And under the proposal, Anglo would have to sell its shares in its platinum and iron ore operations in South Africa, a country that BHP – the world’s largest listed company – left in 2015.

The company was forced to issue a statement on Thursday saying its plans to dump two of Anglo’s South African businesses “did not reflect a vision of (the country) as an investment destination”.

A deal with Glencore could face less opposition in the country, analysts said.