The recently announced merger between Canada’s Teck Resources Ltd (USA) (TSX:TCK) and London-listed Anglo American PLC (LSE:AAL) has sharpened investor interest in South America’s copper sector, amid heightened expectations for long-term supply growth and cost competitiveness.
The all-share merger, described as a union of equals, will create a combined group with a market capitalisation of $50bn, under the proposed name Anglo Teck.
Thomas Batho, a copper analyst at consultancy Project Blue, said the deal significantly reshapes the copper landscape, particularly in Chile and Peru, where both companies already hold substantial assets.
“Anglo’s copper production is concentrated in South America, with tier-one positions at Collahuasi in Chile and Quellaveco in Peru," he says.
"These deliver large-scale output at low unit costs,” he said. Smaller operations such as El Soldado and Los Bronces, also in Chile, sit higher on the cost curve and operate at reduced scale.
Teck, by contrast, brings a more geographically spread portfolio. Its Quebrada Blanca project in Chile began production in 2023 and is expected to drive future growth. That operation is supplemented by Carmen de Andacollo in Chile and Highland Valley in Canada, though both are higher-cost assets.
Teck also owns a 22.5% interest in the Antamina mine in Peru, one of the country’s largest copper producers. While Antamina provides meaningful volumes, Project Blue notes that its cost structure is less competitive compared with Anglo’s flagship assets, which consistently rank in the lower quartiles of the global cost curve.
Several development-stage projects have been absorbed into the combined pipeline, including Zafranal in Peru and Galore Creek in Canada.
Batho noted these additions provide scope for further expansion. He also pointed to ongoing collaboration opportunities with Chile’s state-owned copper company Codelco, particularly in relation to a planned joint development of the Andina and Los Bronces mines.
The merger has renewed attention on copper projects in Peru and Chile, which remain central to meeting long-term demand for the metal. Companies already partnered with either Teck or Anglo may see increased activity.
Teck holds a 9.9% stake in Coppernico Metals (TSX: COPR), listed on the Toronto Stock Exchange, and Condor Resources Inc. (TSX-V:CN, OTC:CNRIF) has granted Teck a 75% option in its Cobreorco project in Peru.
Project Blue said it is monitoring developments across these partnerships and expects further updates in the coming weeks.