Australian mining giant BHP has walked away from plans to merge with London-headquartered copper producer Anglo American, after a fresh takeover bid failed.
Over the weekend, reports emerged in that BHP, which has been looking at options to expand its already world-leading copper production, had rekindled talks with the target after a merger attempt last year.
BHP had put a $US49 billion ($A76 billion) offer on the table, but that's now been dumped - again - leaving Anglo American free to seal a deal to combine with Canadian miner Teck Resources in the coming weeks.
The price of copper - a key material for construction, electrical infrastructure and technology - has rallied on the back of the clean energy transition and soared to 15-month highs in October after supply disruptions at major mines in Indonesia, central Africa and Chile.
The commodity's fundamentals had been looking good for a long time, Australian National University visiting fellow and former BHP chief economist Huw McKay said.
"It's a huge market, which gives it a massive advantage over a lot of more glamorous things which pop up, like rare earths or battery raw materials," Dr McKay told AAP.
"They're tiny markets relative to copper - It's a multi-hundred-billion-dollar value chain."
Copper's supply is expected to remain scarce for the foreseeable future.
"You're looking at a situation where the market's going to run down inventories for another year, and the aggregate situation just tightens further, and there's not a lot of new projects coming on," Dr McKay said.
"So it looks like it's going to be a tight market for a considerable period of time."
BHP is already the world's biggest copper producer, unearthing 1.46 million metric tons in 2024, just ahead of Codelco (1.44 million metric tonnes), and Freeport-McMoRan (1.26 million metric tonnes).
Anglo American and Teck were the world's sixth and 10th biggest copper producers that year, with a combined volume of roughly 1.13 million metric tonnes, meaning BHP's failed merger would have made it the undisputed copper king, while capping the scale of a key competitor that could soon be nipping at its heels.
Teck's bid for Anglo American will go to shareholders in December for approval.
In a brief statement to the Australian stock exchange on Monday, BHP confirmed there had been "preliminary discussions" but they did not go any further and confirmed a merger was off the table.
"Whilst BHP continues to believe that a combination with Anglo American would have had strong strategic merits, and created significant value for all stakeholders, BHP is confident in the highly compelling potential of its own organic growth," it said.
Anglo American had argued the BHP offer significantly undervalued its business.
Shares in BHP, which has a market value of $205 billion, had edged 0.4 per cent lower to $40.21 on Monday afternoon.
