BofA-Australian Metals Mining Weekly AAL and TECK merger.ILU temporary production suspension...-20250915

Anglo American and TECK merger of equals

AAL announced a combination with Teck through a merger of equals. According to therelease, expected pre-tax synergies annually are US$800m. Additional US$1.4bn (100%basis) annual average underlying EBITDA uplift is expected between Collahuasi andQuebrada Blanca from 2030-2049, with an expected increase of c.175t of potentialadditional annual copper output. A primary listing on LSE, with listings on JSE, TSX andNYSE, per the announcement. Anglo American shareholders to own c.62.4% and Teckshareholders to own c.37.6% of Anglo Teck plc immediately post completion. Anglo topay special dividend of $4.5bn ahead of merger. Subject to regulatory conditions, themerger is expected to be completed in 12-18 months. (See report: AAL).

Iluka temporary production suspension, weak demand

Today ILU announced the suspension of its Cataby mine for 12 months and SyntheticRutile Kiln 2 (SR2) for 6 months effective 1 Dec 2025 due to subdued demand from thepigment industry. Cataby produced 320ktpa of Z/R/SR in 2024, including 200kt of SRfrom SR2. The company has HMS inventory of ~700kt and finished goods (Z/R/SR)inventory of ~325kt, as of end-1HFY2025. We believe the inventory is more thansufficient to supply SR offtake agreement of ~220ktpa and continuing zircon and rutilesales in FY26. (See report: ILU).