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BHP's Anglo American play is stacked with ESG headaches

Anglo American has rejected BHP's initial approach, but this saga is far from over. The target's board is not the only roadblock to a deal, with ESG concerns another key factor.

Kate Burgess and Philip Wen
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Workers of BHP's Escondida, the world's biggest copper mine, are seen in front of the open pit, in Antofagasta, Chile. Reuters/Ivan Alvarado.

BHP’s tilt for Anglo American is all about copper. But pulling off the deal will also require manoeuvring around the London-headquartered miner’s host of other assets, many of which are non-core and stacked with environmental, social and governance hangovers.

Late on Friday (early Friday in London) Anglo American formally rejected BHP's $60 billion offer but it's safe to assume this saga is far from over.

Any tie-up would see the world’s largest diversified miner also become the world’s biggest copper producer with about 10% of global supply, just as the market is predicting major production bottlenecks and supply shortfalls.

“The big read through for other copper producers [is] clearly the global consolidation is on,” said Ben Cleary, portfolio manager at Tribeca Investment Partners.