Iconic 100-year-old South African company finding a new home
Anglo American has received regulatory approval from the Canadian government to merge with Teck Resources, a Canadian company.
The completion of the merger will create a new Canada-headquartered company, Anglo Teck, marking the end of the 108-year legacy of the mining giant, founded in Johannesburg, South Africa.
Founded in 1917 by Ernest Oppenheimer with banking from British and American financiers, Anglo American is a South African-founded, UK-based multinational.
The company initially started mining gold in Johannesburg, but later expanded into diamonds, coal and other minerals.
Over the past few years, the group has been gradually withdrawing from its South African operations as part of a major restructuring to focus on global critical minerals, like copper.
The withdrawal from South Africa is multi-layered, rooted in the broader decline of South Africa’s mining industry and shifting global trends.
This has occurred due to poor government policy, rising operating costs in the country, and the near-collapse of the electricity grid and network infrastructure.
Globally, there is also a concerted effort towards cleaner energy and electric vehicles, which puts coal and platinum mining operations at risk.
Although it has not completely withdrawn from South Africa, Anglo’s presence in the country is now a fraction of what it once was.
Its only South African operations now sit with Kumba Iron Ore, following the unbundling of Anglo American Platinum—now Valterra Platinum—earlier this year.
Amid fending off takeover bids from its rival BHP, Anglo American announced a merger of equals with Teck Resources in September.
Anglo American and Teck believe that the formation of Anglo Teck in a merger of equals will provide exceptional and enduring benefits for Canada.
To gain approval for the merger, Anglo Teck made several commitments, including spending at least C$4.5 billion (~R55 billion) in Canada within five years.
Anglo Teck intends to invest a total of at least C$10 billion (~R122 billion) in Canada over the next 15 years.
Duncan Wanblad, CEO of Anglo American, said the Canadian approval marks a significant step towards forming the new major global critical minerals powerhouse, following the overwhelming endorsement by shareholders earlier this month.
“Anglo Teck represents a significant investment in Canada, its people and its natural resources, underpinned by a comprehensive package of commitments designed to drive enduring economic and wider benefits associated with a thriving mining ecosystem in British Columbia, and in Canada as a whole,” he said.
Wanblad stated that the new company’s commitments to South Africa, including investment and other national priorities, will remain in place.
Completion of the merger remains subject to conditions customary for a transaction of this nature, including relevant competition and regulatory approvals in various jurisdictions globally.
The merger has already received competition approvals in Canada and Australia, and other reviews are progressing.
Following completion, Anglo Teck will have its headquarters in Vancouver and will have its primary listing
on the LSE, retaining FTSE UK index inclusion, as well as listings on the JSE, TSX and NYSE.
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