Copper Supply Gap Widens as Anglo American Shifts to Pure-Play Model

Anglo American is shedding its diversified-miner label. The company has sold or spun off its coal, nickel, and diamond assets over the past 18 months, leaving copper as the core business. That shift is accelerating as the global copper market faces a structural supply deficit.

The London-listed miner now generates roughly 70% of its EBITDA from copper, up from 35% in 2022. The remaining assets – iron ore in Brazil and South Africa, plus a small platinum stake – are expected to be divested within two years, according to the company's investor day materials.

Copper inventories on the London Metal Exchange have fallen to 95,000 tonnes, the lowest since 2008. That is less than three days of global consumption. Mine supply is growing at 1.5% annually, while demand from electrification and data-center buildout is rising at 3-4%, according to CRU Group.

Anglo American's Quellaveco mine in Peru reached full output in the fourth quarter, adding 300,000 tonnes of annual capacity. The company also approved a $2.3 billion expansion at its Los Bronces mine in Chile, which will add 150,000 tonnes by 2027.

The risk is execution. Los Bronces requires a new desalination plant and a 150-kilometer water pipeline, both subject to permitting delays. Anglo American's Chilean operations have faced water-access disputes before. A six-month delay on the expansion would push the additional supply into 2028, when the deficit is expected to exceed 1 million tonnes.

For now, the market is pricing Anglo American as a copper pure-play. The stock trades at 8.5x forward EBITDA, a premium to Rio Tinto's 6.2x but below Freeport-McMoRan's 9.8x. The gap reflects the remaining execution risk on the asset sales and the Chilean expansion. The next catalyst is the first-quarter production report, due April 24.