BHP Billiton has dropped its $49 billion bid for Anglo American

BHP Billiton PLC decided not to make a firm takeover offer for Anglo American PLC, temporarily walking away from what would have been the biggest mining deal in more than a decade.

BHP issued a statement announcing its decision less than an hour before a 5pm UK time deadline on Wednesday, marking an abrupt end to more than five weeks of public battle between the two mining giants. That will increase pressure on Duncan Wanblad, Anglo American's chief executive, to turn around losses. BHP's top brass may have to look elsewhere for the copper production growth Anglo could have provided.

Anglo has repeatedly rejected BHP's proposal for a partial spin-off followed by a takeover, but agreed last week to extend the deadline to continue talks, Bloomberg reported. The two sides failed to agree on the complex deal structure of BHP's US $49 billion (S $66.263 billion) takeover plan. Earlier Wednesday, Anglo said it saw no reason for another extension, despite BHP's last-minute appeal.

A central part of BHP's plan is to spin off Anglo American's assets in South Africa, a politically sensitive move that has sparked opposition from the government ahead of South African elections.

If successful, BHP would become a commodities giant far ahead of its nearest rival, dramatically boosting its copper output at a time when miners and investors expect a prolonged period of tight supplies and rising prices.