Anglo American has reportedly rejected a merger offer from Vedanta Resources, despite CEO Mark Cutifani’s fears the worst is yet to come for mining.
Vedanta chairman Anil Agarwal has made a number of motions to embattled miner Anglo American, including suggesting potential mergers of the businesses, according to Bloomberg.
It has even hired former Anglo American CEO Cynthia Carroll as an advisor due to her experience in metals and the M&A space.
However, these proposals were rejected out of hand by Anglo American, which stated the deals either didn’t make business sense or were not feasible, and as such never moved to a full exploration of the potential structure of a merged entity.
The massive turnaround the miner has seen in its shareprice, which has grown exponentially and almost tripled following drastic divestment actions earlier year, this may have driven this decision to reject tie-up offers.
Instead, Anglo American remains focused on divesting its non-core assets, namely iron ore, niobium, phosphates and coal, which will see it completely exit from its Australian operations.
Yet despite this stronger position, Anglo CEO Mark Cutifani remains pessimistic on the state of the industry.
“We’re not convinced the worst is behind us,” he told Bloomberg.
“There will be pressure on supply right across the commodity suite.”
He pointed to ongoing weakness in Chinese markets as one of the main points of instability for the industry’s recovery.