Anglo American (LON: AAL) and Teck Resources (TSX: TECK.A, TECK.B; NYSE: TECK) are preparing a $53 billion merger that could reset the hierarchy of global copper production. If executed as planned, the combined entity could surpass BHP’s Escondida mine in Chile, the industry’s benchmark asset for decades, by the early 2030s.
Building Scale Through Integration
At the heart of the deal is the planned integration of Teck’s Quebrada Blanca (QB) mine in northern Chile with Anglo’s 44% interest in Collahuasi, one of the world’s largest copper operations. Analysts believe that linking Collahuasi’s high-grade ore to QB’s new processing facilities through a 15-kilometre conveyor could unlock output equivalent to a mid-sized standalone mine. The system is projected to add 175,000 tonnes per year between 2030 and 2049.
Together, the Collahuasi-QB complex could produce roughly one million tonnes annually, taking total Anglo-Teck output to around 1.35 million tonnes. For comparison, Escondida produced 1.28 million tonnes in 2024, cementing its position as the industry leader. A shift at the top would mark the first change in copper mining’s pecking order in a generation.
Financial Ambitions
Management is targeting $800 million in annual pretax synergies, with as much as $1.4 billion in incremental EBITDA from procurement and operating efficiencies. Portfolio managers, however, suggest those forecasts may understate the potential. “The optionality to expand and develop that complex over multiple decades is not in that number,” noted George Cheveley of Ninety One, underscoring the longevity of the asset base.
For Anglo American, which has been under pressure to simplify its portfolio and sharpen its focus, the merger offers an avenue to deepen copper exposure just as global demand accelerates. For Teck, the deal would crystallize value from QB, an asset seen as both a growth engine and an operational drag.
Execution Risks in Focus
The QB mine has been plagued by setbacks including cost overruns, pit-wall stability issues, plant outages, and waste-storage challenges. Analysts argue that resolving these operational hurdles is a prerequisite before any serious challenge to Escondida’s dominance can materialize.
Complicating matters further, Anglo does not control Collahuasi outright. Glencore (LON: GLEN) holds an equal 44% interest, while Japanese partners own the balance. That structure means expansion decisions will require alignment across multiple parties, potentially slowing development timelines.
Wood Mackenzie values Teck at $10.8 billion on a sum-of-the-parts basis, with copper contributing $13.8 billion, zinc $1.1 billion, offset by $4.1 billion in central costs through 2040. The firm’s valuation reflects QB’s execution risks but does not capture merger synergies or expansion options.
Why It Matters for Copper Markets
Copper has increasingly been labeled the “new oil” of electrification. From EV charging infrastructure to power grids and data centers, demand is expected to double over the next two decades, according to the International Energy Agency. Yet supply growth has lagged: ore grades are falling globally, permitting is slower, and few large-scale discoveries have been made in the last decade.
These dynamics explain why consolidation, not grassroots exploration, has become the preferred strategy for majors. The Anglo-Teck merger, if approved, would represent the largest mining-sector transaction of the decade and one of the few with the scale to alter supply fundamentals.
For host country Chile, the deal also carries significance. Santiago is seeking to balance private investment with tighter environmental and social standards while maintaining competitiveness against Peru and emerging jurisdictions. A Collahuasi-QB hub producing over one million tonnes annually would further entrench Chile’s dominance as the world’s top copper supplier.
Investor Takeaway
The Anglo-Teck transaction highlights the race among global miners to secure scale in critical minerals. If QB’s structural issues can be resolved, the combined entity could displace Escondida and reshape copper supply for decades. Execution risk remains the main caveat, but the direction of travel is clear: in a market where demand is tied to electrification and AI-driven energy use, consolidation is becoming the fastest route to copper leadership.
Key Points for Investors
- Anglo and Teck plan a $53B merger to integrate QB and Collahuasi in Chile
- Projected combined output of 1.35M tonnes could surpass Escondida by the 2030s
- $800M in synergies targeted, with upside of $1.4B EBITDA gains
- Operational challenges at QB remain the biggest risk factor
- Consolidation trend reflects industry shift as copper demand accelerates
