Woodsmith Mine developer Anglo American in £31bn takeover approach by Australian rival

The mining giant behind a multibillion-pound fertiliser project in North Yorkshire and Teesside is the subject of £31.1bn takeover approach from global rival BHP Billiton.

Anglo American is building out the emerging Woodsmith Mine scheme that aims to take natural mineral fertiliser from underneath the North York Moors National Park before transporting it via an underground conveyor system to Redcar where it will be exported to global markets. The UK-based firm confirmed to shareholders on the London Stock Exchange that it had received the unsolicited and "highly conditional" proposal from Australia's BHP, the world's largest mining company.

Shares in Anglo American soared on news of the potential deal - which would be one of the sector's largest - in which BHP said it would offer £25.08 a share, including £4.86 a share in Anglo Platinum stock and £3.40 in Kumba Iron Ore company shares. The terms are now being reviewed by Anglo's board and its rivals.

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If it went ahead, the move would create world's biggest copper miner, with around 10% of global output. Copper is experiencing high global demand amid the energy transition given its use in renewable energy projects and electric vehicles.

Earlier this year Anglo told of progress at the Woodsmith project on which it has staked considerable resources. The firm said it has spent around £505m ($641m) on infrastructure for the mine near Whitby, including the sinking of two deep shafts, a service shaft and a production shaft. It is also the majority of the way through the 37km conveyor tunnel that will move the extracted polyhalite fertiliser to Teesside, where it will be processed into granules for use by farming customers.

Despite the huge sums already spent on the project, Anglo has indicated it is yet to fully decide the future of the project, with a board approval decision only due to come in the first half of 2025.

Meanwhile, Anglo said that under the deal being proposed by BHP, it would have to spin off two Anglo units - its platinum arm Anglo American Platinum and Kumba Iron Ore, which are both listed in South Africa. BHP added that following any deal, Anglo's other "high quality operations, including its diamond business" would be subject to a strategic review.

BHP said: "The combination would bring together the strengths of BHP and Anglo American in an optimal structure. Anglo American would bring its assets and long-term growth potential.

"BHP would bring its higher margin cash generative assets and growth projects along with its larger free cash flows and stronger balance sheet. Anglo American has a deep pool of talented people who would continue to make a valuable contribution to the successful operation of Anglo American's assets within the combined group."