Unlocking Value in Anglo American: Strategic Restructuring Positions for Decarbonization Gains

The metals and mining sector is undergoing a seismic shift, driven by decarbonization goals, rising demand for critical commodities, and evolving investor priorities. Anglo American's recent strategic moves—most notably the demerger of Valterra Platinum, COO consolidation, and focus on copper, iron ore, and crop nutrients—position it as a leader in capitalizing on these trends. This analysis explores how these moves create value accretion opportunities and why investors should consider Anglo American as a near-term buy.

The Demerger of Valterra Platinum: A Catalyst for Value Creation

The completion of the Valterra Platinum demerger on May 31, 2025, marked a pivotal step in Anglo American's portfolio simplification. By spinning off its platinum group metals (PGMs) business, the company has reduced complexity and focused on high-growth assets. Valterra's shares debuted on the London and Johannesburg exchanges, with strong initial demand reflecting investor confidence in its standalone potential.

The demerger's timing was strategic: platinum prices hit a four-year high of $1,226/oz in June 2025, fueled by supply shortages and industrial demand for catalytic converters. Valterra's cost efficiencies—its all-in sustaining cost (AISC) of $957/3E ounce in 2024—add further credibility. Anglo American retained a 19.9% stake, allowing it to benefit from Valterra's upside while redirecting capital to core assets.

Market reactions were cautiously optimistic. Anglo American's share price rose 0.1% in London post-demerger, while Valterra's London-listed shares opened at 2,800p, signaling investor approval of the split.

COO Consolidation: Streamlining for Operational Excellence

Effective July 1, 2025, Ruben Fernandes assumed the new role of Chief Operating Officer, consolidating oversight of four core production businesses: Brazil, Chile, Kumba Iron Ore, and Peru. This move centralizes decision-making, reducing bureaucratic layers and accelerating execution of Anglo American's strategic priorities.

Fernandes' appointment is a masterstroke. His 25-year career in mining, including roles at Rio Tinto and BHP, brings deep expertise in operational efficiency and cost management. Under his leadership, the company aims to reduce unit costs for copper to ~$151/lb and iron ore to ~$36/ton by 2025, enhancing margins in a sector plagued by rising input prices.

The restructuring also reflects a commitment to ESG. Fernandes will collaborate with Helena Nonka, the new Chief Strategy & Sustainability Officer, to align operations with Anglo American's Sustainable Mining Plan. This focus on decarbonization and community engagement is critical to unlocking value in an ESG-conscious investment landscape.

Focus on Copper: The Metal for the Energy Transition

Anglo American's pivot to copper is its most compelling value proposition. Copper's role in renewable energy infrastructure—wind turbines, solar panels, EV batteries—is undeniable. The International Energy Agency estimates that copper demand could triple by 2040 to meet net-zero targets.

Anglo American's copper portfolio is a standout asset. Its Los Bronces and Collahuasi mines in Chile, along with the Quellaveco mine in Peru, are among the world's largest. The company plans to increase annual copper production to 1 million tonnes by 2030, leveraging projects like the Sakatti copper deposit in Finland.

The company's cost discipline is another advantage. In 2024, its copper AISC fell to ~$160/lb, below peers, and further reductions are on track. This positioning ensures strong cash flows as copper prices remain elevated.

The De Beers Divestment: A Necessary Trade-Off

Anglo American's separation of De Beers, its diamond division, is part of its portfolio simplification. While diamonds remain a niche luxury asset, they lack the growth profile of copper or iron ore. The company has engaged advisers to finalize the sale, with expectations of completion by year-end 2025.

The timing is prudent. Lab-grown diamonds are eroding margins, and De Beers' valuation is likely constrained compared to its core assets. Divesting allows Anglo to redeploy capital into higher-margin opportunities. Investors should monitor progress here, but the strategic logic is clear: focus on commodities that drive the energy transition and food security.

Near-Term Investment Thesis

Anglo American's restructuring creates a compelling value proposition:

1. Portfolio Simplification: The demerger of Valterra and planned exit from De Beers reduce complexity, enabling focused execution on copper, iron ore, and crop nutrients.
2. Leadership Strength: Fernandes and the new executive team bring operational rigor and ESG expertise to drive efficiency and investor confidence.
3. Commodity Tailwinds: Copper's structural demand and iron ore's role in infrastructure spending are secular trends with long horizons.
4. Valuation: At current prices (~£2,200/share as of June 2025), Anglo trades at a ~15x EV/EBITDA multiple, below its five-year average.

Risks to Consider

• Platinum Price Volatility: Valterra's success hinges on sustained PGM demand.
• Operational Hurdles: South Africa's load-shedding and labor disputes could disrupt production.
• De Beers Timeline: Delays in the sale could weigh on sentiment.

Conclusion: A Strategic Buy for Patient Investors

Anglo American's restructuring is a textbook example of value creation through portfolio discipline. Its focus on copper—a cornerstone of the energy transition—and iron ore's steady demand, paired with leadership capable of executing operational excellence, positions it to outperform peers.

Investors should consider adding Anglo American to their portfolios at current levels, with a target price of £2,500/share by year-end 2025. Monitor Valterra's performance and the De Beers sale for catalysts, but the long-term narrative is clear: Anglo American is building a leaner, higher-margin business primed to profit from decarbonization.

Investment Rating: Buy
Target Price: £2,500/share by December 2025
Risks: Commodity price declines, operational disruptions