LONDON, May 14 (Reuters) - Anglo American (AAL.L) New Tab, opens new tab laid out plans on Tuesday to refocus on energy transition metal copper while spinning out or selling its less profitable coal, nickel, diamond and platinum businesses, as it moves to fend off BHP Group's $43 billion takeover offer.

The announcement comes a day after the London-listed miner rejected its Australian suitor for the second time in less than three weeks, saying an increased offer from BHP (BHP.AX) New Tab, opens new tab continued to significantly undervalue the company.

Anglo said on Tuesday it would divest its steelmaking coal assets, demerge its South African platinum unit, explore options for its nickel mines and divest or demerge diamonds business De Beers. The group expects the new portfolio configuration will lower costs by $1.7 billion.

"We expect that a radically simpler business will deliver sustainable incremental value creation through a step change in operational performance and cost reduction," Anglo CEO Duncan Wanblad said.

Anglo shares were down 3.3% at 26.17 pounds by 1224 GMT. BHP, the world's biggest listed miner, had no immediate comment on Anglo's plan.

BHP's 27.53 pound per share offer, raised from an initial 25.08 pounds, would require Anglo to sell its iron ore and platinum assets in South Africa, where it employs more than 40,000 people.

That has caused alarm in South Africa, where unemployment and a stagnant economy are major issues in campaigning for a May 29 election.

Wanblad said on Tuesday BHP's bid had forced him to accelerate plans for a spin-off of Johannesburg-listed Anglo American Platinum (AMSJ.J) New Tab, opens new tab, known as Amplats.

Under Tuesday's plan, Anglo will keep its South African Kumba Iron Ore business (KIOJ.J) New Tab, opens new tab, while Wanblad said the planned divestment of Amplats would be "completely different" in terms of time and complexity to the BHP proposal.

South Africa's mines minister Gwede Mantashe said on Tuesday he had no problem with what Anglo was proposing, and that he hoped it would continue to resist BHP's bid.

Anglo also said on Tuesday it will slow the development of its Woodsmith fertiliser project in northeast England and seek strategic partners.

It now plans to spend $200 million on the project in 2025, down from a previously estimated $1 billion, and nothing in 2026. First production at Woodsmith will be pushed back from 2027, Wanblad said.

The divestment of Anglo's steelmaking coal operations could move rapidly, he added, given the interest that is available.

SELF-HELP

Anglo has been meeting investors since BHP's initial approach in April, and after a review of its assets initiated in February in response to a 94% plunge in annual profit and writedowns at its diamond and nickel operations.

One top 20 investor at Anglo, who said a deal with BHP was likely to lead to less copper being produced, rather than the increase needed to accelerate the world's energy transition, welcomed Tuesday's proposal.

"At the moment, Anglo has lots of very interesting assets ... but it is not a focused business focused on a clear strategic goal," the shareholder said. "This plan offers clarity of purpose."

MKP Advisers said however that the concern with the "self-help plan" will be that it is "too little, too late".

"There is no timescale attached to most of the plans and it has been clear to most that many of the potential disposals across the portfolio are simply tough to execute," MKP said.

Activist fund Elliott, one of Anglo's top 10 shareholders after building up a $1 billion stake, declined to comment on the plan. It is expected to put out a statement later in the day, sources say.

Developments such as artificial intelligence and automation and the energy transition, which includes electric vehicles and renewable energy, have driven up demand prospects for copper cable used to conduct electricity.

Copper prices have risen 25% from this year's Feb. 9 low to $8,127 a tonne.

Ashwin Pillay, senior associate at law firm Charles Russell Speechlys, said the new plan did address shareholder concerns that the value of Anglo's copper mines has been suppressed by less valuable operations such as the diamond division.

"Intriguingly, there is still an opportunity for BHP to raise their offer further, including by adding a cash component, which would sweeten the pot," he added.

($1 = 0.7966 pounds)

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https://www.reuters.com/markets/commodities/anglo-american-eyes-offloading-steelmaking-coal-nickel-diamonds-2024-05-14/