Anglo American PLC (LSE:AAL) said there were some unexpected elements in an operations update by Teck Resources Ltd (TSX:TECK.B) but it does not change the strategic rationale for the two companies' agreed merger.
The FTSE 100 miner said the outcome of Teck’s operational review and updated outlook is consistent with its own analysis undertaken ahead of the two companies’ merger agreement announced last month.
Anglo said that while outcome of the operational review "was not known at the time" that it agreed the merger, the findings are "broadly consistent" with its own independent due diligence and analysis, and the overall strategic rationale for the merger and expected synergies and timing "remain unchanged".
In its operational review, Teck updated its production and cost outlook, with the Quebrada Blanca (QB) mine, situated in northern Chile’s Atacama Desert, copper operation remaining constrained by tailings facility development through 2026.
The Canadian company is implementing technical measures to improve sand drainage and expects these constraints to ease from 2027, while overall third-quarter production met expectations and strong copper prices supported positive pricing adjustments
Anglo said it fully supported Teck’s slower ramp-up of QB, noting it had overcome similar technical challenges at its own Quellaveco mine in Peru.
It described the merger as an "outstanding value creation opportunity", reiterating expectations of US$1.4 billion in annual average EBITDA uplift from combining QB with its nearby Collahuasi, alongside US$800 million in recurring pre-tax annual synergies.