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Barron’s wrote a bullish story on miner Anglo American (OTCQX:NGLOY) this weekend, saying the company could overcome operational problems or find itself acquired by a larger rival.
“Operational issues and challenging conditions in several key markets, including diamonds, where the company is located The De Beers unit lost money in 2023, and disappointing multi-year production prospects late last year rattled investors and depressed shares,” Barron’s said.
But metal prices are improving, the company is looking to cut costs and may be considering “a $30 billion sale of the company, which would be easily digestible by one of its competitors. Most Streets Point to a Rebound for Anglo shares”.
The operational changes could see Anglo-American stocks catch up with rivals such as BHP Group (BHP), Glencore (OTCPK:GLCNF) and Rio Tinto (RIO).
“Nowadays, copper is Anglo American’s best business, and most of its mining operations are located outside the country,” Barron’s said. “It has a new low-cost Peruvian mine and two others in Chile. Its production is about 1.2 billion pounds a year, about a third of the industry leader Freeport-McMoRan (FCX) with low production costs in cash of about $1.50 a pound.”
“Copper also has the best long-term outlook among metals, due to limited new supply and increased demand for green energy.”