Australian resources giant BHP has been sent packing by British rival Anglo American after an ambitious $60 billion power play to control the lion's share of the world's energy transition supplies.
Shares in BHP fell 4.6 per cent to $43.15 on Friday after it made the all-share offer worth Stg 31.1 billion ($A59.4 billion) for Anglo American - the world's largest platinum miner and a major international copper player.
But in late trading, the London-headquartered company announced its board had unanimously rejected the bid, arguing it significantly undervalued Anglo American's future prospects.
Anglo American was also turned off by a requirement to demerge its shareholdings in Anglo American Platinum and Kumba Iron Ore and distribute them to shareholders.
"The proposed structure is also highly unattractive, creating substantial uncertainty and execution risk borne almost entirely by Anglo American, its shareholders and its other stakeholders," chairman Stuart Chambers said.
The bid follows BHP chief executive Mike Henry's warning in 2023 that there was not enough copper available to electrify the global economy.
Copper is an essential ingredient in the manufacturing of batteries, electric vehicles and electrical wiring.
Mr Henry and BHP must weigh up whether to come back with an improved offer or walk away.
The company said the proposed deal would increase shareholders' exposure to "future-facing commodities" through Anglo American's copper assets.
Merged, they would become the world's biggest producer of copper with about 10 per cent of existing supply along with greater exposure to nickel and the future of steel.
"A lack of new mined copper resources is a major obstacle for the energy transition and mining companies are facing growing resistance to building new mines, forcing them to merge to achieve growth," Benchmark principal copper analyst Yongcheng Zhao said.
With steel needed for turbines, wind towers and transport, the deal would also combine BHP's iron ore and metallurgical coal with Anglo American's iron ore operations in Brazil and metallurgical coal assets in Queensland.
The combined entity would retain BHP's global listings on the Australian, London, Johannesburg and New York stock exchanges.
BHP said the "potential combination" would bring together their strengths to generate significant cash flows and have the financial clout to support value-adding growth projects at an "optimal time", while continuing its commitment to shareholder returns.
Anglo American would bring its assets and long-term growth potential, while BHP has higher margin cash generative assets and growth projects along with larger free cash flows and a stronger balance sheet, the iron ore giant argued.
"The combined entity would have a leading portfolio of large, low-cost, long-life Tier 1 assets focused on iron ore and metallurgical coal and future facing commodities, including potash and copper," BHP said.
