British mining giant Anglo American is disposing of its diamond business, De Beers

British mining giant Anglo American has announced plans to break up the company after rejecting a £34bn bid from rival BHP.

The company said it would sell or merge key parts of the company including De Beers’ diamond division and platinum division.

Anglo American said the “radical changes” would allow it to focus on key areas such as copper, premium iron ore and crop nutrients.

Demand for copper, which is used to conduct electricity, is increasing as some countries turn to renewable energy and electric vehicles.

The agreement with the Australian company BHP would create the largest copper producer in the world, but it may face major obstacles in competition.

Anglo owns two copper mines, in Chile and Peru, where BHP also has some operations.

Anglo rejected two offers from BHP and on Tuesday set out its own strategy which it hopes will win the support of its shareholders.

These include governments in Botswana, as well as in South Africa, which initially gave a lukewarm response to BHP’s approach. The Australian giant had proposed splitting Amplats, Anglo’s platinum mining arm, as well as its Kumba iron ore business.

Anglo, which has had a presence in South Africa for more than a century, said it would go ahead with the merger of Amplats – cutting 3,700 jobs – but would retain Kumba.

It will also retain its crop nutrients business and, in the case of its Woodsmith potash mine below the North Yorkshire Moors, Anglo will reduce its investment to $200m (£159m) next year and to zero in 2026.

“These actions represent the most radical changes for Anglo American in decades,” said Duncan Wanblad, CEO of Anglo American.

BHP had proposed selling De Beers as part of its bid. Anglo said it would sell or divest its diamond business, in which the Botswana government has a 15% stake.

De Beers was founded in 1888 by British imperialist Cecil Rhodes.

In recent years, activists have lobbied for the removal of a statue of him in an Oxford University college. They said the businessman, who was also a South African politician, represented white supremacy and was steeped in colonialism and racism.

“While Rhodes is part of our early history, it is not representative of the company we are today,” De Beers said.

Anglo said its plans aim to put the company in the best position to benefit from the global transition to clean energy. It also hopes that reshaping the company will cut costs by $1.7 billion.

In rejecting BHP’s increased takeover offer, Anglo said the offer was “highly unattractive” to its shareholders because it continued to significantly undervalue the company.

“By implementing these portfolio changes ourselves, we will be able to do so in a way that respects our employees, host communities and countries, including ensuring that Anglo American South Africa in particular continues to play its role as stewards,” Wanblad said. A responsible business leader to support the country’s national priorities.”

Anglo American’s share price fell 2.6% to £26.30 on Tuesday.