Melbourne: Major investors are urging mining giant BHP to abandon its pursuit of acquiring Anglo American and concentrate on its own growth projects, marking a clear call for strategic discipline. The advice comes after BHP decided to step back from merger discussions, signaling a renewed focus on organic expansion rather than chasing high-profile acquisitions. Analysts and investors alike see this move as a critical pivot toward ensuring sustainable value creation for shareholders.
BHP had recently revived interest in a potential merger with Anglo, raising eyebrows among shareholders and market watchers. The company’s decision to walk away from acquisition talks coincides with a crucial shareholder vote scheduled for December 9 on a $60 billion merger between Anglo American and Canada’s Teck Resources. The pullback indicates that BHP is now prioritizing projects it fully controls rather than engaging in complex negotiations with another global miner.
Investors have been vocal about the merits of this shift. Hugh Dive, a prominent fund manager at Atlas Funds Management in Sydney, expressed surprise at BHP’s renewed interest in Anglo, suggesting that many shareholders would have been “shocked to hear” of the attempt. Dive emphasized that BHP’s strength lies in leveraging its existing portfolio, which includes several high-potential, long-term development projects.
Among these projects, the Jansen Potash Project in Canada remains a flagship initiative, despite experiencing some cost overruns and delays. Scheduled to commence production in 2027, Jansen represents a significant opportunity for BHP to solidify its position in the potash market. Additionally, BHP continues to advance its copper expansion projects across Argentina, Chile, and Australia, reflecting a strategic alignment with the global energy transition that is driving demand for copper and other critical minerals.
BHP has also invested heavily in partnerships to strengthen its project pipeline. Notably, the company has committed around US$2 billion in joint ventures with Canada’s Lundin for two copper projects in Argentina. In Australia, BHP is assessing the potential to double production from its South Australian operations by the mid-2030s, with a key decision expected by 2027. Investors see these initiatives as providing a more reliable path to growth than engaging in high-stakes mergers.
Fund managers have emphasized that internal growth offers a more disciplined and predictable avenue for value creation compared to merger activity. Jason Teh, chief investment officer at Vertium Asset Management, noted that while acquisitions remain a potential option, the risk of overpaying for assets that may not integrate smoothly is significant. Similarly, Stephen Butel of Platypus Asset Management, who previously divested his BHP holdings, highlighted the importance of refining operations, improving efficiency, and focusing on cost management rather than increasing corporate complexity.
Other investors, including Joseph Koh of Blackwattle Investment Partners, welcomed BHP’s decision to step away from the Anglo bid, describing it as a sign of “capital discipline.” While he acknowledged the value of Anglo’s copper assets, Koh noted that BHP’s renewed focus on organic growth projects better positions the company to navigate volatile commodity markets and deliver sustainable returns over the long term.
The broader context reinforces this investor sentiment. Copper and potash, key commodities in BHP’s pipeline, are integral to the global energy transition and food security, respectively. By focusing on these core projects, BHP is not only securing a stronger operational foundation but also aligning its growth strategy with long-term market trends, potentially offering a more stable trajectory than speculative acquisitions.
In sum, BHP’s decision to abandon the Anglo acquisition pursuit reflects a strategic recalibration in response to investor concerns. Analysts and shareholders alike now see a clear message: disciplined internal growth, careful cost management, and the completion of existing high-potential projects should take precedence over high-profile mergers, offering a more sustainable path to creating shareholder value.