Anglo American and Teck merger terms unchanged in spite of production revisions

Anglo American said $50 billion (R858bn) merger terms with Teck Resources would remain unchanged, this barely a month after the deal was announced and after Teck revised downwards its production guidance of its Quebrada Blanca (QB) copper mine.

Teck on Wednesday lowered its guidance for the QB copper mine high in Chile’s Atacama desert, as part of a wider operational review, to between 170 000 to 190 000 tons, from previous guidance of 210 000 to 230 000 tons.

The deal to acquire Teck crucially gives Anglo access to the Canada-based company’s portfolio of copper mines - copper has become a sought-after mining commodity given its soaring demand arising out of the global energy transition.

Anglo said in a statement, however, that Teck’s operational review and updated outlook was in line with Anglo's own independent due diligence of the company, and their merger terms remained unchanged.

Anglo and Teck had on September 9, 2025, announced plans for an all-share merger.

Teck president and CEO Jonathan Price had said in his online presentation, following an operational review, that the company’s copper production estimate for 2025 was being revised down by between 55 000 and 60 000 tons to between 415 000 and 465 000 tons.

This was because production was being constrained by the pace of the development of the tailings management facility (TMF), which had led to less-than-design recovery rates at the mill.

“Teck’s priority remains enabling safe, unconstrained production by raising the crest height of the dam. This is being delivered through the construction of additional rock benches, while continuing to progress efforts to improve sand drainage to support construction of the sand dam,” said Price.

The development of the TMF was only expected to complete by the end of 2026, and it was no longer expected to be a constraint in 2027, said Price.

“To strengthen executive oversight of operational activities and drive operating performance across the business, the Senior Vice President of Operations for Latin America and North America have been reporting directly to the President and CEO since the beginning of September.”

Anglo said it had done significant due diligence on Teck ahead of the merger announcement, and that this had included site visits and extensive engagement on technical, legal, financial, and other matters.

“While the specific outcome of the operational review that Teck has announced today was not known at the time, the outcome presented by Teck was broadly consistent with Anglo American's independent due diligence and analysis,” Anglo’s directors said.

They said Anglo was "fully supportive" of Teck's “more measured approach” to the ramp-up of the QB operation over the next few years, with Anglo American's technical and project delivery teams having successfully resolved similar issues at the Quellaveco copper mine in Peru during its ramp-up phase.

Teck's revised approach was designed to establish a tailings facility for the long term, which was critical to realise “the very significant inherent value of QB over its life of the mine,” Anglo said.

“Anglo American shares Teck's view about the full potential of QB and believes Anglo Teck will have the opportunity to unlock material additional value with the Collahuasi adjacency.”

They said the merger of Anglo American and Teck was “an outstanding value creation opportunity, including by unlocking the expected very material earnings and cost synergies previously set out – being $1.4bn in annual average earnings before interest, tax, depreciation, and amortisation (EBITDA) uplift through the combination of Collahuasi and QB, and $800 million in pre-tax recurring annual synergies.”

Anglo’s share price gained 1.62% to R665.01 on the JSE on Wednesday afternoon, while Teck’s share price was barely changed in Canada at the same time.

BUSINESS REPORT