JPMorgan Upgrades Anglo American to Neutral, Boosts PT

Anglo American may close its Brazilian nickel operations if the EU blocks its $500M sale to MMG by 30 November 2026. The EU is concerned MMG, majority-owned by China Minmetals, could divert supply from European stainless steel producers. The operations produced 18,200 tonnes of nickel in H1 2026, larger than the 32,000-tonne global deficit forecast for 2026. LME nickel stocks rose to 284,178 tonnes on 7 October, keeping prices stable despite closure risks.

Teck Resources (NYSE: TECK) announced details of its merger with Anglo American, including an 11-trading-day closing period and a $4.5B special dividend to be paid within 45 days of the effective date, extended from the original 30-day timeline.

Copper Leads Profit Growth Anglo American’s simplified portfolio generated $4.1 billion in EBITDA, an increase of 31% from the previous year. The EBITDA margin reached 46%, while underlying earnings increased 60% to $1 billion. Around 70% of portfolio EBITDA came from copper, highlighting the metal’s growing importance to the company’s investment case. Revenue increased 22%, while copper production reached 344,000 tonnes during the first half.

Anglo American PLC reported Q2 copper output of 173,200 tons, flat year over year, citing higher throughput at Los Bronces offset by lower-grade processing at Collahuasi and expected lower grades at Quellaveco. It reaffirmed FY2026 guidance for copper 700,000-760,000 tons and diamond 21-26 million carats, plus premium iron ore 55-59 million tons.

JPMorgan put Anglo American on Negative Catalyst Watch ahead of its July 23 Q2 production update, citing elevated cost risks and reiterating an Underweight rating. The bank forecasts $3.8B first-half EBITDA, below consensus, and highlights weaker iron ore, softer diamonds, and cost inflation. It set a £33.50 target and flagged Collahuasi desalination suspension tail risk.

Mining stocks led FTSE 350 gains on Thursday, with precious and base metals producers rising. Pan African Resources and Hochschild Mining rose 4.7% and 3.9%, respectively. Antofagasta climbed 4.0% after a JPMorgan upgrade. Copper, silver, and gold prices also increased. Broader markets recovered from earlier losses.