Mega-Merger Could Topple Escondida as World’s Top Copper Mine

However, significant execution risks remain. Teck’s QB mine has historically struggled with cost overruns, pit instability, plant outages, and waste-storage issues.

SEATTLE (Scrap Monster): A proposed $53 billion merger between Anglo American (LON: AAL) and Teck Resources could create the world’s largest copper mine by the early 2030s, surpassing BHP’s Escondida in Chile, according to analysts.

The two mining giants announced a “merger of equals” agreement last week, potentially marking the sector’s largest deal in the past decade. The combined entity, uniting one of the world’s largest and highest-quality copper companies, would rank among the global top five copper producers with an annual output of 1.35 million tonnes. In comparison, the Escondida mine produced approximately 1.28 million tonnes in 2024.

The centerpiece of the deal is the integration of Teck’s Quebrada Blanca (QB) project with Anglo’s Collahuasi operation. Together, they are projected to produce about one million tonnes of copper per year. William Tankard, an analyst at CRU Group, stated that a combined Collahuasi-QB complex could surpass Escondida’s level of copper out-turn in the early 2030s.

The companies anticipate $800 million in annual pre-tax synergies, with up to an additional $1.4 billion in EBITDA gains from shared procurement and operational efficiencies. George Cheveley, a portfolio manager at Ninety One, deemed this forecast “conservative,” noting that the long-term expansion potential of the complex over decades is not reflected in that number.

However, significant execution risks remain. Teck’s QB mine has historically struggled with cost overruns, pit instability, plant outages, and waste-storage issues. Meanwhile, Anglo American does not fully control Collahuasi, where Glencore (LON: GLEN) and other partners hold substantial stakes. Analysts warn that resolving QB’s operational challenges is critical before the combined complex can challenge Escondida’s dominance.

A sum-of-the-parts valuation by Wood Mackenzie values Teck at $10.8 billion post-tax: $13.8 billion from its copper assets and $1.1 billion from zinc, offset by $4.1 billion in central costs through 2040. This estimate excludes potential synergies with Collahuasi, QB’s growth options, and a life extension at the Red Dog mine, but factors in downside risks from QB’s operational setbacks.

 Courtesy: www.nai500.com