The deal, if completed, would likely trigger further transactions in the mining industry, which has seen a series of mergers and acquisitions as companies review their assets to increase their access to strategic metals.

"It's all about copper," says Ben Cleary, portfolio manager at Tribeca Investment Partners. "I think it's a good deal for BHP. Anglo American is obviously in play, and it's possible that other players will step in. It's going to set the whole sector on fire."

The proposed takeover comes after Anglo American, whose market capitalization stood at $37.7 billion at the close of trading on Wednesday, began a a review of its assets in February after its annual profit plunged 94% and a series of writedowns due to falling demand for most of the metals it mines. The market capitalization of BHP Group, the world's largest mining company, was around $149 billion on Wednesday.

10% of the world's copper

If concluded, this agreement would give BHP Group access to more copper, a metal essential to the energy transition, and potash, another resource of strategic importance. Anglo American owns copper mines in Chile and Peru, countries in which BHP Group is also present. The combined output of these mines is estimated at around 2.6 million tonnes per year, or around 10% of world production.

Anglo American is forecasting copper production of between 730,000 and 790,000 tonnes by 2024. BHP Group is targeting copper production of between 1.7 million and 1.9 million tonnes for the 12 months to June.

Anglo American said that BHP Group's proposal would be conditional on the separate distribution to its shareholders of all its interests in Anglo American Platinum and Kumba Iron Ore. The offer values Anglo American at £31.1 billion ($38.84 billion). BHP is offering Anglo American shareholders GBP 25.08 per share, including GBP 4.86 per Anglo Platinum share and GBP 3.40 per Kumba share, BHP said in a statement on Thursday.

The company said its board was considering BHP Group's proposal. Under UK rules governing takeover bids, BHP Group has until May 22 to make a binding offer.