The Church of England (CofE) Pensions Board has cautioned against a proposed takeover of mining company, Anglo American, raising concerns over the long-term risks posed to asset owners’ interests.

According to a statement from Anglo American, BHP Group made a second, “unsolicited, non-binding and highly conditional” combination proposal, which was unchanged from the proposal previously rejected in April 2024.

This comprises an all-share offer for Anglo American by BHP, with a requirement for Anglo American to complete two separate demergers of its entire shareholdings in Anglo American Platinum Limited and Kumba Iron Ore Limited to Anglo American shareholders.

The Anglo American board unanimously rejected the latest proposal, stating that it is “confident” in Anglo American’s standalone future prospects.

Anglo American chairman, Stuart Chambers, said: “The latest proposal from BHP again fails to recognise the value inherent in Anglo American.

“Anglo American shareholders are well positioned to benefit from increasing demand from future enabling products while the increasing capital intensity to bring greenfield supply online makes proven assets with world class resource endowments ever more attractive.

"The BHP proposal also continues to have a highly unattractive structure. This leaves Anglo American, its shareholders and stakeholders disproportionately at risk from the substantial uncertainty and execution risk created by the proposed inter-conditional execution of two demergers and a takeover.”

The CofE Pensions Board, a UK asset owner and a long-term shareholder in Anglo American, echoed many of these concerns, arguing that “losing Anglo as a distinct entity may serve short-term financial interests, but as an asset owner we are not convinced that such consolidation will serve our long-term interests as a pension fund”.

CofE Pensions Board chief responsible investment officer, Adam Matthews, said: “Our position is not in any way a judgement of any company making a bid for Anglo, but rather a call for greater reflection by institutional investors as to what is at stake and at risk of being lost.

"Mining has an absolutely vital role to play over the coming decades to provide the critical resources for the low carbon transition and other industrial activity, and we question if losing Anglo is the right market response.

“We need more companies like Anglo that are willing to grasp the opportunities of operating in emerging and developing markets such as Africa, not fewer. Seeing it swallowed up would risk damaging the enhanced role mining could play in key economies especially in Africa.

“The sector benefits from there being a race to the top among the major mining companies, and consolidation at this level removes a key actor in pursuit of a socially and environmentally responsible mining sector.”

In addition to this, Matthews said that, as a UK pension fund, the trustees are keen that London Stock Exchnge Group a premium market for mining companies.

“Rather than the prospect of losing Anglo, it would perhaps be more appropriate to consider what enhanced role Anglo and other companies could play in benefitting local and national populations, generating broader long-term value and supporting economic development in mineral rich countries,” he said.

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